Gabriel Kuek v Lamprini Wade and Magistrates' Court of Victoria

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2017 0030

GABRIEL KUEK	Applicant
v
LAMPRINI WADE	First respondent
and
MAGISTRATES’ COURT OF VICTORIA	Second respondent

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JUDGES:	TATE and KYROU JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	18 October 2017
DATE OF JUDGMENT:	15 November 2017
MEDIUM NEUTRAL CITATION:	[2017] VSCA 329
JUDGMENT APPEALED FROM:	Kuek v Wade (Unreported, Supreme Court of Victoria, Bell J, 1 March 2017)

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ADMINISTRATIVE LAW – Judicial review – Magistrates’ Court proceeding by solicitor to enforce agreement by client to pay $10,000 in costs – Client self-represented – Magistrate took control of proceeding, redefined client’s case without hearing any evidence from her and cross-examined solicitor – During hearing magistrate decided that agreement was unenforceable at common law and that Legal Profession Act 2004 was irrelevant – Self-executing order granting leave to amend within 30 days to plead quantum meruit – Time limit not met – Self-executing order took effect resulting in proceeding being struck out – Judge dismissed application for judicial review in exercise of discretion – Whether judge had discretion to do so – Whether suitable alternative remedy to judicial review available to solicitor.

ADMINISTRATIVE LAW – Judicial review – Whether error of law on face of Magistrates’ Court record – Whether magistrate’s reasons recorded in transcript form part of record – Administrative Law Act 1978 s 10 – Whether magistrate’s conduct denied solicitor procedural fairness, gave rise to apprehended bias and resulted in trial not being according to law – Whether judge erred in not making findings on these grounds of review – Grounds established – Judge erred in dismissing application for judicial review – Appeal allowed.

LEGAL PRACTIONERS – Proceeding to enforce costs agreement – Legal Profession Act 2004 overrides common law principles which are inconsistent with Act – Able Demolitions and Excavations Pty Ltd v Barry Kenna & Co [2016] VSCA 312 applied.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr P G Nash QC	Access Law
For the First Respondent	Mr R Andrew	Starnet Legal
For the Second Respondent	No appearance

TATE JA

KYROU JA:

Introduction and summary

This proceeding relates to a claim for $10,000 for legal costs by a solicitor against his former client. Instead of being resolved promptly and inexpensively at the Magistrates’ Court, it has involved an application to the Trial Division to judicially review the magistrate’s decision and an application to this Court for leave to appeal against the decision of the Trial Division. The review and appellate jurisdictions of this Court have been invoked because the magistrate did not act judicially, resulting in significant costs and delays. What has occurred is not only highly regrettable but contrary to the overarching purpose in s 7(1) of the Civil Procedure Act 2010 (‘CPA’), namely, ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’.

On 15 April 2009, the first respondent, in her capacity as litigation guardian for her son, engaged the applicant to commence a proceeding in the Federal Court against the State of Victoria.[1] The Federal Court proceeding was commenced in April 2009 and alleged that the State had discriminated against the first respondent’s son in the provision of education services on the basis of his intellectual disability.
[1]Three separate proceedings were commenced but they were subsequently consolidated.

On 3 May 2012, the State offered to settle the Federal Court proceeding for $50,000 plus costs. The applicant communicated the offer to the first respondent. At that time, the applicant did not know the quantum of the solicitor-client costs or the party-party costs to be recovered from the State and did not provide any estimate of these costs to the first respondent. However, he had previously informed her that his solicitor-client costs would exceed the party-party costs by more than $15,000. On 3 May 2012, he informed her that he was willing to accept that amount in addition to the party-party costs. The first respondent offered the applicant $10,000 in addition to party-party costs and the applicant accepted that offer (‘3 May 2012 agreement’). The Federal Court proceeding settled on 4 May 2012. On that day, the first respondent confirmed the 3 May 2012 agreement in writing.

On 14 January 2013, the applicant sent an invoice for $10,000 to the first respondent. She did not pay the invoice.

On 14 December 2015, the applicant commenced a proceeding against the first respondent in the Magistrates’ Court. His statement of claim pleaded the 3 May 2012 agreement and claimed the amount of $10,000 and interest of $2,910.56. The first respondent was not legally represented in that proceeding. She filed a defence which, in substance, alleged that she entered into the 3 May 2012 agreement under pressure from the applicant who had threatened to cease acting for her at a critical stage of settlement negotiations with the State.

The Magistrates’ Court proceeding was heard by Magistrate Michael Smith on 29 June 2016. The hearing was not conducted in a conventional manner. Instead of the parties making opening submissions and adducing evidence in turn and then making closing submissions, the magistrate conducted an inquisitorial process in which he initially questioned the first respondent and then engaged in a detailed exchange with counsel for the applicant, Mr Doherty. Once it became apparent that the first respondent did not dispute the making of the 3 May 2012 agreement, the magistrate focused on what costs estimates were given to her before the making of that agreement.

Mr Doherty informed the magistrate that the only information about costs that was provided to the first respondent on various occasions prior to her agreeing to accept the State’s settlement offer was that the applicant’s solicitor-client costs would exceed the party-party costs by more than $15,000. The magistrate then made statements which suggested that the applicant’s failure to provide to the first respondent estimates of solicitor-client costs and party-party costs meant that the 3 May 2012 agreement was unenforceable. This prompted the applicant to ask Mr Doherty to call him to give evidence. After the applicant was affirmed and Mr Doherty asked him two questions, the magistrate questioned the applicant extensively. Some of the questions were in the nature of vigorous cross-examination. In discussion with Mr Doherty while the applicant remained in the witness box, the magistrate expressly stated his view that the absence of costs estimates meant that the 3 May 2012 agreement was unenforceable.

In the light of the magistrate’s firmly expressed view that the 3 May 2012 agreement was unenforceable, Mr Doherty applied for leave to amend the complaint to plead a claim in quantum meruit and for an adjournment of the hearing to enable him to do so. The magistrate granted these applications.

The magistrate did not publish any discrete reasons for his decision that the 3 May 2012 agreement was unenforceable. He stated that his reasons were those he articulated during the course of the hearing.[2]
[2]Transcript of Proceedings (29 June 2016) 72–3, 75 (‘Magistrates’ Court hearing transcript’).

On 29 June 2016, the magistrate made a self-executing order which granted leave to the applicant to amend his complaint and provided that the proceeding be struck out if an amended complaint was not filed within 30 days (‘magistrate’s order’).

The applicant prepared an amended complaint which, as an alternative to the claim for $10,000 under the 3 May 2012 agreement, claimed $13,953 on the basis of quantum meruit. When he attempted to file the amended complaint on 3 August 2016, which was five days after the expiration of the period specified in the magistrate’s order, the Magistrates’ Court refused to accept it.

By originating motion dated 25 August 2016, the applicant sought judicial review of the magistrate’s order on the grounds summarised at [55] below. Those grounds included jurisdictional error, denial of procedural fairness, apprehended bias and error of law on the face of the record.

The application for judicial review was heard by Bell J on 1 March 2017. At that hearing, the first respondent was again self-represented. At the conclusion of that hearing, the judge made an order dismissing the application on the basis that, even if the grounds of review were made out, relief should not be granted to the applicant in the exercise of the Court’s discretion.[3] The discretionary matter upon which the judge relied was that the applicant had available to him an adequate alternative remedy — namely, the filing of an amended complaint — which he failed to exercise.
[3]Kuek v Wade (Unreported, Supreme Court of Victoria, Bell J, 1 March 2017) (‘Reasons’).

The applicant has sought leave to appeal against the judge’s order on the grounds that: the alternative remedy of filing an amended complaint was not adequate; the alternative remedy was no longer available when the originating motion was filed; the grant of relief in cases of lack of jurisdiction is not discretionary; and, even if a discretion was available, the judge failed to take into account the applicant’s explanation for not filing an amended complaint within time.

For the reasons that follow, the application for leave to appeal will be granted and the appeal will be allowed.

Relevant provisions of the Legal Profession Act

Before discussing the facts in more detail, it is convenient to set out some provisions of the now repealed Legal Profession Act 2004 (‘LPA’) which regulated the solicitor-client relationship between the parties during their retainer.

Division 3 of pt 3.4 of the LPA imposes disclosure obligations on law practices in relation to costs. Section 3.4.9 sets out various matters in relation to costs which, in accordance with s 3.4.11, a law practice must disclose in writing to a client before, or as soon as practicable after, the law practice is retained in a matter. In the present case, the first respondent has not alleged that the applicant did not comply with these provisions.

Section 3.4.13 of the LPA sets out the matters that a law practice must disclose to a client before a settlement is executed and s 3.4.17 sets out the consequences of a failure to comply with the costs disclosure obligations in div 3 of pt 3.4. They provide as follows:

3.4.13 Additional disclosure—settlement of litigious matters
(1)If a law practice negotiates the settlement of a litigious matter on behalf of a client, the law practice must disclose to the client, before the settlement is executed—
(a)a reasonable estimate of the amount of legal costs payable by the client if the matter is settled (including any legal costs of another party that the client is to pay); and
(b)a reasonable estimate of any contributions towards those costs likely to be received from another party.
…

…
3.4.17 Effect of failure to disclose
(1)If a law practice does not disclose to a client … anything required by this Division to be disclosed, the client … need not pay the legal costs unless they have been reviewed under Division 7.
Note
Under section 3.4.45, the costs of a review in these circumstances are generally payable by the law practice.
(2)A law practice that does not disclose to a client … anything required by this Division to be disclosed may not maintain proceedings against the client … for the recovery of legal costs unless the costs have been reviewed under Division 7.
(3)If a law practice does not disclose to a client … anything required by this Division to be disclosed and the client … has entered into a costs agreement with the law practice, the client … may also apply under section 3.4.32 for the costs agreement to be set aside.
(4)If a law practice does not disclose to a client … anything required by this Division to be disclosed, then, on a review of the relevant legal costs, the amount of the costs may be reduced by an amount considered by the Costs Court to be proportionate to the seriousness of the failure to disclose.

…
(7)Subsections (1) and (2) do not apply if the legal costs are or have been the subject of a civil complaint under Chapter 4.

Section 3.4.19 of the LPA sets out the following bases upon which a law practice can recover its costs:

(a) under a costs agreement made in accordance with Division 5 … ; or
(b)if paragraph (a) does not apply, in accordance with an applicable practitioner remuneration order or scale of costs; or
(c)if neither paragraph (a) nor (b) applies, according to the fair and reasonable value of the legal services provided. …

Section 3.4.26 of the LPA provides that a costs agreement may be made between a client and a law practice. Costs agreement is defined in s 3.4.2 as ‘an agreement about the payment of legal costs’. Section 3.4.26(2) provides that a costs agreement must be written or evidenced in writing. Section 3.4.30 of the LPA provides that a costs agreement may be enforced in the same way as any other contract.

In Able Demolitions and Excavations Pty Ltd v Barry Kenna & Co,[4] this Court reviewed pt 3.4 of the LPA and concluded as follows:

[T]he broad latitude that the common law provides to parties to agree to contractual provisions of their choosing is circumscribed by the LPA where the contract relates to the charging of legal fees by a lawyer. Common law principles of contract cannot apply in relation to such fees if they are inconsistent with the provisions of the LPA.[5]
[4][2016] VSCA 312 (‘Able Demolitions’).
[5]Able Demolitions [2016] VSCA 312 [90].

Facts

At the time that the first respondent retained the applicant to act for her in the proposed Federal Court proceeding, he sent her a retainer letter and disclosure statement. The disclosure statement specified that the applicant would charge the first respondent at a rate higher than that allowed by the then applicable Federal Court scale. It also stated that if the Federal Court ordered the State to pay any of the first respondent’s costs, ‘those costs are likely to be about half of your total legal expenses.’

From 8 September 2010, the first respondent and the State made a number of offers and counter-offers in an endeavour to settle the Federal Court proceeding.

On 8 November 2010, the applicant advised the first respondent that his solicitor-client costs would exceed the party-party costs that she would be able to recover from the State by $15,000.

On 19 April 2012, the Federal Court made a costs order against the first respondent due to the unsatisfactory nature of her pleading (‘Federal Court costs order’) and foreshadowed the possibility of ordering costs against the applicant personally if the pleading remained unsatisfactory. The State estimated that the costs the subject of the Federal Court costs order totalled $13,500.

On 20 April 2012, the applicant sent an email to the first respondent regarding an offer that was made by the State on 10 April 2012 to settle the Federal Court proceeding for $25,000 plus costs. He informed her that, if she rejected the offer, he would not be able to continue to act for her, as he was concerned that, if a costs order was made against him personally, a conflict of interest might arise.

On 24 April 2012 the applicant reiterated to the first respondent that he would not continue to act for her if the Federal Court proceeding did not settle. The first respondent rejected the State’s offer of $25,000 plus costs and asked the applicant for a breakdown of the $15,000 that he had previously advised her that she would have to pay. She instructed him to make a counteroffer of $50,000 plus costs, with the additional condition that the State agree not to enforce the Federal Court costs order.

On 30 April 2012, counsel acting for the first respondent in the Federal Court proceeding, Mr Hancock, informed the applicant that the first respondent had instructed him to ask if the applicant would accept $5,000 in costs over and above party-party costs. On 1 May 2012, the applicant informed the first respondent that he would not accept $5,000, and if her counteroffer was accepted, she would have to pay $15,000 over the amount recoverable on a party-party basis.

On 3 May 2012, the State offered to pay $50,000 plus costs and to waive the Federal Court costs order. The offer was made at 4:40 pm and was open for acceptance until 6:00 pm on 4 May 2012. The applicant sent a facsimile to the first respondent outlining the offer and stating that she would have to pay him $15,000 if she accepted the offer. Negotiations then took place between the applicant and the first respondent, with Mr Hancock acting as an intermediary. At 9:42 pm, during a telephone conversation, the first respondent asked the applicant if he would accept $10,000 and he agreed.

On 4 May 2012, the first respondent accepted the State’s offer. The terms of the settlement were approved by the Federal Court on 3 October 2012. The applicant ceased to act for the first respondent on that day.

As stated at [4] above, the first respondent did not pay the applicant’s invoice for the amount of $10,000 in accordance with the 3 May 2012 agreement.

On 9 September 2013, the first respondent made a complaint to the Victorian Legal Services Commissioner (‘Commissioner’) about the applicant’s costs. On 19 December 2013, the Commissioner dismissed the complaint.

On 6 October 2014, the Federal Court certified the first respondent’s party-party costs at $110,010.

As the first respondent failed to comply with the applicant’s requests for payment of the invoice for $10,000, the applicant commenced the Magistrates’ Court proceeding.

Magistrates’ Court hearing

At [5] above, we briefly summarised the parties’ pleadings in the Magistrates’ Court proceeding and at [6]–[7] we outlined the manner in which the magistrate conducted the hearing. It is now necessary to set out in greater detail the course of the hearing.

The hearing took place on 29 June 2016 and extended over the entire day. The Magistrates’ Court hearing transcript is 78 pages in length.

The hearing commenced with Mr Doherty applying for leave to amend the complaint to correct some minor errors. The magistrate then had a dialogue with the first respondent which commenced at page 2 of the Magistrates’ Court hearing transcript and concluded on page 11. In response to questions from the magistrate, the first respondent did not deny that she entered into the 3 May 2012 agreement. She said that she was pressured into making the agreement.

The magistrate then questioned Mr Doherty, particularly in relation to whether estimates of solicitor-client costs and party-party costs were provided to the first respondent before the 3 May 2012 agreement was made. In the course of his questioning, the magistrate said the following to Mr Doherty:

She is your client. You must give her all information in your possession in that it would enable her [to] make an informed decision one way or the other, and you didn’t, did you?[6]

[6]Magistrates’ Court hearing transcript 15.

Mr Doherty was granted an adjournment to obtain instructions about the matters raised by the magistrate. After a brief adjournment, Mr Doherty explained that the time pressures associated with acceptance of the State’s offer of settlement did not permit the applicant to make any costs calculations. He submitted that, notwithstanding that no costs estimates were provided to the first respondent, she was informed that solicitor-client costs would exceed party-party costs by more than $15,000 and was able to make an informed decision whether to agree to pay $10,000 over and above party-party costs. He also emphasised that, in approving the settlement with the State, the Federal Court was aware of the first respondent’s obligation to pay to the applicant $10,000 in costs.

The magistrate stated that the approval of the settlement by the Federal Court was irrelevant and that the key issue was whether the applicant had given to the first respondent ‘sufficient information to make the proper decision as to whether to accept that figure [of $10,000] or not’.[7] When Mr Doherty stated that the applicant had informed the first respondent that the difference between solicitor-client costs and party-party costs would be well in excess of $15,000, the magistrate stated:

It doesn’t matter. It does not matter one iota. If he does not disclose to her information in his possession or does not inform her of his professional opinion as to the likely costs (indistinct) – then he asks his client to pay a bill, which does not on the face of it relate to the agreement of costs as between them. That’s what happened, isn’t it?[8]

[7]Magistrates’ Court hearing transcript 19.

[8]Magistrates’ Court hearing transcript 21.

At this point, Mr Doherty called the applicant to give evidence. After Mr Doherty asked the applicant two questions, the magistrate took over the questioning. His questioning extended from page 22 to page 28 of the Magistrates’ Court hearing transcript. As stated at [7] above, some of the questions were in the nature of vigorous cross-examination. At times, the magistrate cut off the applicant’s answers before they were completed. There were also occasions when the applicant became argumentative, and even requested the magistrate to disqualify himself. The following exchanges are illustrative:

HIS HONOUR: What was the estimate you gave her?
APPLICANT: Well, I did not give her estimates as such of the party and party costs or of the solicitor and client costs. It was impossible within that time to do that. What I did, Your Honour, was I based my estimate of $15,000 on the difference between what I charge privately and what the Federal Court charge – charges – allows on the party and party bill.
HIS HONOUR: I know the difference, Mr Kuek. I’m asking on what basis you made that figure?
APPLICANT: Well, the – the difference, Your Honour, is the 25 per cent – the 30 per cent in the terms of the hourly rates. There’s a start. I knew too that I had – – –
HIS HONOUR: Did you have progress figures, Mr Kuek?
APPLICANT: No, I did not.
…
HIS HONOUR: So just tell me roughly how you estimated this figure to be in excess of $110,000, Mr Kuek?
APPLICANT: Well, there was a – there’s a difference between what my scale fees were – – –
HIS HONOUR: Yes, I know, Mr Kuek. I’m asking you how you worked out your figure?
APPLICANT: I’m trying to do that, Your Honour.
…
HIS HONOUR: Mr Kuek, your client must be put in a position where she can make a properly informed decision on the cost offer made by her lawyer – – –
APPLICANT: I’d say she was.
…
HIS HONOUR: No, it’s important that Mrs Wade, as your client, be told all relevant matters and facts to the best of your knowledge which would inform her decision. That’s what she should have been given?
APPLICANT: And I say I gave her the best of what I was able to give her on the day in question, by – by informing her of the – the difference between what might be recovered and what she might be up for and then – – –
HIS HONOUR: You guessed it, Mr Kuek?
APPLICANT: I beg your pardon?
…
HIS HONOUR: Are you telling me it was a guess? You just made a guess?
APPLICANT: It was – it was a figure that I thought was not unreasonable. It was a conservative figure.
HIS HONOUR: No, that’s not the point. It’s not a question of what you thought was reasonable, Mr Kuek, is it?
APPLICANT: Yes, it is.
…
HIS HONOUR: Mr Doherty, if you now intend to belatedly [produce] figures as to the solicitor/client costs, how subsequently they were arrived at and thought about – doesn’t interest me. I’m interested in what was conveyed to the client at the time the agreement was made. Do you understand me?
MR DOHERTY: Yes. I propose taking the witness through this backstory – – –
APPLICANT: With respect, Your Honour, I – I seek your disqualification.
MR DOHERTY: – – – to the offer, which includes communications to Mrs [Wade] related to the costs agreement and related to potential costs.
HIS HONOUR: Just show me what she was told. That’s basically – – –
APPLICANT: I seek – – –
HIS HONOUR: Not you, Mr Kuek – – –
APPLICANT: I seek your disqualification, Your Honour.
HIS HONOUR: I’m talking to your counsel.[9]

[9]Magistrates’ Court hearing transcript 22–3, 27–9.

As is evident from [5] above, the first respondent’s defence did not plead that the 3 May 2012 agreement was unenforceable due to inadequate costs disclosure by the applicant. Mr Doherty made reference to this issue being absent from the defence at page 36 of the Magistrates’ Court hearing transcript. Notwithstanding the contents of the defence, the magistrate stated the following:

The issue here is a very simple one (indistinct words). Yes, [Mrs Wade] agreed to pay after negotiations, various fees, but her case is that, ‘All the information I was given in respect of all those negotiations I was not properly informed, and you should have informed me properly, and you didn’t’. That’s what [her] position is, as I understand it, not because she didn’t say yes to $10,000. Obviously she did.[10]

[10]Magistrates’ Court hearing transcript 40–1.

The magistrate then stated that the 3 May 2012 agreement cannot be enforced.[11] Mr Doherty stated that he would look at the LPA over the luncheon adjournment. The applicant withdrew from the witness box just prior to the luncheon adjournment.
[11]Magistrates’ Court hearing transcript 42–3.

After the luncheon adjournment, Mr Doherty referred to s 3.4.13(1) of the LPA. He submitted that the applicant’s statement to the first respondent that, as a result of the settlement with the State her liability for the applicant’s costs would be $10,000, sufficiently complied with that section. He contended that this meant that the prohibition on maintaining proceedings to recover costs in s 3.4.17(2) did not apply to the enforcement of the 3 May 2012 agreement. In the alternative, Mr Doherty submitted that if the applicant’s statement did not comply with s 3.4.13(1), then, by virtue of s 3.4.17(7), the fact that the legal costs had been the subject of a complaint by the first respondent to the Commissioner meant that the prohibition in s 3.4.17(2) did not apply.

The magistrate rejected these submissions on the basis that the LPA was irrelevant. He did not look at the provisions of the LPA. He also determined that the 3 May 2012 agreement was not a ‘costs agreement’ without considering the definition of that term in the LPA. The magistrate said the following:

Look, it depends how you characterise the settlement, if that’s what it was, all right? The proposition is fairly clear, ‘You owe me money for my legal services. What I’ll accept is $10,000 plus all party/party costs to which you may be entitled’, correct? That is what it was. How that fits in with the costs is difficult to see because actually it doesn’t, all right? So this is the bargain that I’m looking at, all right? I am not looking at the [LPA] at all, not looking at it. All right?
As far as I’m concerned, as far as I believe the money is, that this was a bargain struck outside of the costs agreement. All right? It was not struck within that agreement at all. In a sense, it was to abrogate that agreement.
The Lawyer says, ‘This is how I’ll accept payment’, right? The client is then in a position to say, ‘Well, I can either deal with you on this basis, and say “Yes” or “No”, or I can refuse, and say “no, I rely upon the costs agreement. If you want money from me, follow that agreement. If however, you want me to step outside of that agreement and strike this bargain with you, please tell me everything in your knowledge for what should reasonably be legal or not, because I would like to make an informed decision, to abandon my rights, under the costs agreement,”’ correct? The question was, was [Mrs Wade] put in that position or not. This doesn’t have anything to do with the [LPA], that’s all. This is a matter of contract, a matter of a bargain agreement and a matter of fiduciary relationship between the parties. That is what it comes down to.[12]

[12]Magistrates’ Court hearing transcript 51–2.

After further extensive discussion between the magistrate and Mr Doherty, the following exchange took place:

MR DOHERTY: If your Honour is indicating that these proceedings are premature – – –
HIS HONOUR: I am not indicating that at all. You sued to recover on that bargain, didn’t you?
MR DOHERTY: Yes, we have, Your Honour.
HIS HONOUR: So that’s my concern, not your costs agreement, that bargain. You don’t sue on the cost agreement at all.
MR DOHERTY: Can we amend the pleadings then to sue on the costs agreement itself, Your Honour?
HIS HONOUR: No, you can’t. Nice try. No. You want to enforce that bargain, don’t you? That is what you’re saying.
MR DOHERTY: Either on the basis that it was a – a variation to the – it comes within the cost of the cost agreement or it’s a separate – separate – – –
HIS HONOUR: I explained why that’s not either appropriate or indeed just to the other side. You sue on a settlement, you sue on a bargain. I don’t have to repeat myself.
MR DOHERTY: Yes, Your Honour.
HIS HONOUR: You sue on a settlement or you sue [on] a bargain. It is clear that you didn’t know what the figures were. Your client couldn’t possibly have known. Well, you might have had some idea of what the figures were, but she certainly didn’t. You deal with different matters, as I said. You could have given her at least an accurate comparison as possible, and if you’d acted in good faith and done your best, but you had absolutely no idea, did you?
MR DOHERTY: Your Honour, there’s no evidence before this court, and admittedly we haven’t heard from [Mrs Wade], that this bargain was in any way improvident.
HIS HONOUR: She doesn’t want to pay. She says he can’t enforce it.[13]

[13]Magistrates’ Court hearing transcript 58–9.

Mr Doherty returned to s 3.4.17 of the LPA and the Commissioner’s dismissal of the first respondent’s complaint about the applicant’s costs. In the following exchange, the magistrate reiterated that the LPA was irrelevant:

HIS HONOUR: We are not talking about disclosure under the [LPA], and I made that clear. We are talking about the obligation to disclose matters fully to a client.
MR DOHERTY: Yes.
HIS HONOUR: That is what I’m talking about, all right? I don’t have any problem with Mr Kuek bringing this action, because he’s bringing it on a contract or a settlement outside of the costs agreement. All right?
MR DOHERTY: Yes.
HIS HONOUR: Which means that it’s treated, in effect, as a common law contract, or a common law contract between parties, one of whom owes a fiduciary duty to the other. Right?
MR DOHERTY: Yes.
HIS HONOUR: That is what I’m talking about. It might be different if he was suing on the costs agreement. He may have advantages; indeed, he may have problems also, correct? But he’s not, is he? So your concerns, I think, in respect to that, are groundless, no?[14]

[14]Magistrates’ Court hearing transcript 66.

The magistrate then stated that, although the applicant could not sue on the 3 May 2012 agreement, that did not ‘necessarily rule out any other option[s] to recover costs if they are available’.[15] In response to this statement, Mr Doherty sought instructions from the applicant and then applied for leave to amend the complaint to claim costs on a quantum meruit basis and for an adjournment to enable him to do so. The magistrate indicated that he would grant the applications and emphasised that the amended complaint should claim costs solely on a quantum meruit basis and abandon the claim under the 3 May 2012 agreement. This is reflected in the following exchange:
[15]Magistrates’ Court hearing transcript 67.

HIS HONOUR: Just make sure that they proceed from the right basis, and proceed from the basis of this claim on this contract, this settlement, call it what you will, would not succeed for the reasons I think I’ve adequately outlined to you. In the circumstances, I will allow the plaintiff to amend the claim. Essentially they are going to start again, all right? By starting again it means they cannot rely upon this agreement, or whatever it was in May, in setting the $10,000. That no longer is open to you.
MR DOHERTY: Not in the alternative, Your Honour?
HIS HONOUR: No, Mr Doherty, that would not be fair to [Mrs Wade].
…
MR DOHERTY: If there’s no application to amend, Your Honour - - -
HIS HONOUR: Yes, you had better think about that, hadn’t you?
MR DOHERTY: - - - then Your Honour would be part-heard. Is that correct?
HIS HONOUR: No, because it wouldn’t be adjourned. I don’t think Mrs Wade needs to give evidence.
…
MR DOHERTY: But if there’s no amended complaint, what happens then, your Honour?
HIS HONOUR: Guess.
MR DOHERTY: Is there scope for final submissions?
HIS HONOUR: They would be a bit brief.
MR DOHERTY: They may be brief.
HIS HONOUR: Mr Doherty, you don’t amend, you lose. I thought I had made that abundantly clear. That is why I am giving you the opportunity.[16]

[16]Magistrates’ Court hearing transcript 72–4.

The magistrate then explained to the first respondent what had occurred. He said the following:

HIS HONOUR: All right, so what’s happening, Mrs Wade, is this. [Mr Kuek] has effectively brought against you, suing on that agreement whereby you were to pay $10,000 and assign effectively for party/parties for [Mr Kuek], I have found that they can’t maintain that claim against you for the reasons I have expressed.
FIRST RESPONDENT: Yep.
HIS HONOUR: They did not discharge their (indistinct) to fully disclose all relevant facts and matters before you made such a decision to abandon your rights under the costs agreement, all right?
FIRST RESPONDENT: Yes.
HIS HONOUR: But in my opinion, they cannot enforce that agreement. It is unconscionable, it’s contrary to the obligation owed between a solicitor and his client. That is my ruling. In the circumstances, however, … I think it just that they be allowed to file an amended complaint seeking to recover their costs from you, by any means which they feel is legally possible.[17]

[17]Magistrates’ Court hearing transcript 75–6.

In accordance with the magistrates’ intimation that the first respondent need not give evidence, she did not do so.

The Magistrates’ Court hearing transcript records that the hearing was adjourned to a date to be fixed.

Order made by the magistrate and the applicant’s non-compliance

The magistrate’s order provided as follows:

1[APPLICANT] HAS LEAVE TO FILE AND SERVE AMENDED COMPLAINT WITHIN 30 DAYS.

2 IN DEFAULT COMPLAINT BE STRUCK OUT.
3[FIRST RESPONDENT] TO FILE AND SERVE ANY AMENDED DEFENCE WITHIN 21 DAYS OF SERVICE.

As stated at [11] above, the Magistrates’ Court rejected the applicant’s amended complaint because of non-compliance with the time limit in the magistrate’s order.

In support of his originating motion dated 25 August 2016, by which he sought judicial review of the magistrate’s order, the applicant filed an affidavit affirmed by him on 27 September 2016. In that affidavit, he explained that: he did not comply with the magistrate’s order because he had been overseas between 6 and 18 July 2016; while he was overseas he became unwell, and remained unwell upon his return to Australia for ‘several weeks’; and during that time he ‘completely overlooked’ the magistrate’s order.

Application for judicial review and the judge’s reasons for dismissing it

The applicant’s originating motion sought an order in the nature of certiorari to quash the magistrate’s orders on the following grounds:

(a)Jurisdictional error: The Magistrates’ Court proceeding was not conducted in accordance with r 49.01 of the Magistrates’ Court General Civil Procedure Rules 2010 (‘MC Rules’) and the magistrate reached conclusions of fact in the absence of any evidence to support them.
(b)Apprehended bias: The magistrate formed a preconceived view based on assertions by the first respondent from the Bar table — which did not constitute evidence — that she was pressured to enter into the 3 May 2012 agreement.
(c)Denial of procedural fairness: The magistrate acted on statements made by the first respondent from the Bar table without requiring her to give evidence and exposing her to cross-examination, and denied the applicant the opportunity to complete his evidence, tender other documents or call other witnesses to refute the first respondent’s statements from the Bar table.
(d)Error on the face of the record: The record of the Magistrates’ Court includes the magistrate’s reasons set out in the Magistrate’s Court hearing transcript and these demonstrate the errors in (a)–(c) above and also that the magistrate acted unjudicially and misapprehended the law in respect of legal costs.

The originating motion was heard on 1 March 2017. Submissions were made by senior counsel for the applicant, Mr Nash QC. The first respondent was not required to make submissions before the judge made an order dismissing the proceeding. He delivered ex tempore reasons for the order, which included the following statements:

I want to say at this early stage that I am not here to condone what the magistrate did, and it’s quite apparent from the transcript that not everything that happened was ideal. What I think the magistrate concluded was that the claim for the $10,000 outstanding legal costs was one in which s 3.4.13 of the [LPA] stood in the way. The magistrate, I think, concluded as a matter of legal interpretation that the [applicant] had not done in the settlement that occurred the things that were required by that provision. There is a real question of law as to whether the magistrate was correct in this regard. But that, in essence, I think is what he did.
His Honour also appears to have acceded to Mrs Wade’s Bar table statements (she did not give evidence) that she was under pressure when she agreed to pay the $10,000 by way of extra legal costs above party/party costs, and this gives rise to concern because of the lack of evidentiary foundation for this view. I am a bit uncertain about this aspect because at the end of the day I think his Honour acted upon the basis that the claim as advanced was one that was unavailable because of the provisions of s 3.4.13 of the [LPA] that I have mentioned.
What the magistrate then did was to say to counsel representing the [applicant] that unless there was an amendment the claim would be dismissed. That was said after counsel for the [applicant] formally sought leave to amend and an adjournment to advance that amendment. In passages of the transcript that I was taken to by Mr Nash there is an exchange in which the magistrate assertively said that this course had to be adopted or the [applicant’s] claim would not succeed. The language is colourful and maybe even not judicial. But it is very clear that this is what the magistrate intended was to happen.
…
There may have been legal errors of the kind that were relied upon in the originating motion and before me in argument by Mr Nash this morning, but I am of the clear view that this is the kind of case in which the court should exercise its discretion not to grant judicial review even if, as I do assume, grounds have been made out. The court has that discretion on a number of grounds.
One of the grounds is that the conduct of the party in the proceeding below is disentitling in particular respects. This ground is connected closely with another ground upon which the discretion can be exercised, which is that there is an adequate alternative remedy available in relation to the issues in dispute. In my view the plaintiff in the proceeding below effectively elected to continue participation in the proceeding before the magistrate by seeking leave to amend and agreeing to the order that was made permitting filing an amended statement of claim within 30 days in default of which the proceeding would be struck out.

This 30 day period went by and the claim was not advanced, as I have said, but the claim that was advanced by way of amendment was perfectly adequate to cover the issues that were in dispute between the parties. Indeed the claim was for an amount of $13,953, which is more than the $10,000 that was originally claimed, although I do note that interest on top of that was also claimed.
The amended statement of claim for which leave was given should have been filed and served within time. If it had been, the [applicant’s] claim for the reasonable value of the work and labour done would have provided a more than adequate means of resolving the issues in dispute between the [applicant] and [Mrs Wade]. That the [applicant] did not take that course is a matter that is disentitling in relation to the application for judicial review in this court. The amended claim that was not pursued in time represented an adequate alternative remedy. In the exercise of the court's discretion, that application will therefore be dismissed. The order of the court will be that the application for judicial review is dismissed.[18]
[18]Reasons 19–22.

Grounds of Appeal

The applicant’s proposed grounds of appeal are as follows.

1The learned Judge erred in holding that the filing of a further Amended Statement of Claim would have provided a more than an adequate means of resolving the issues in dispute between the applicant and the [first] respondent and, in particular, in treating leave to file a claim in quantum meruit as an adequate substitute for the applicant’s right to have determined his claim based on an express contract.
2The learned judge erred in basing his exercise of discretion on an inadequate option left open to the applicant at the time of the wrongful rejection of his contract claim rather than considering the situation at the time the Originating Motion was commenced.
3The learned judge erred in failing to give consideration or weight to the following:
(a)The option of commencing proceedings in quantum meruit was not an adequate substitute for the cause of action of which the applicant had been deprived.
(b)Between 6 and 18 July 2016 the applicant was overseas. While overseas, he became unwell. Upon his return to Australia, the applicant remained ill for several weeks. During that time, he completely overlooked the [magistrate’s order].
(c)At the time the applicant commenced the proceeding by Originating Motion his claim before the Magistrates’ Court had been [struck out].[19]
[19]This ground, as originally formulated, stated that the claim had been dismissed. This error was corrected in oral submissions on the hearing of the application for leave to appeal.
(d)Dismissal of the Originating Motion would result in the applicant being deprived of his statutory rights to a merits hearing of his claims and any subsequent appeal.

4The learned judge erred in the exercise of his jurisdiction in the following ways:
(a)The grant of relief in cases of lack of jurisdiction is not discretionary.
(b)If, in the circumstances of the case, the grant of relief were discretionary:
(i) the learned judge failed to weigh up the applicant’s failure to file a further Amended Statement of Claim on time against all other relevant considerations, and —
(ii)the learned judge failed to give sufficient weight to the fact that the learned magistrate by refusing to allow the applicant to present his case and requiring him to substitute a claim in quantum meruit acted not only without jurisdiction but unlawfully and improperly.

5 The applicant was denied a fair hearing.

Both parties were represented by counsel at the hearing of the application for leave to appeal. The parties’ oral submissions were directed mainly at the magistrate’s conduct rather than the judge’s decision. They focused firstly on whether the grounds of review in the originating motion were made out and, secondly, on whether even if any of those grounds was made out, it was open to the judge to refuse relief as a matter of discretion. Accordingly, we will discuss these issues before making brief observations on the formal grounds of appeal. However, before doing so, it is convenient to set out some legal principles and statutory provisions which provide the legal framework for those grounds.[20]
[20]The principles set out at [63]–[72] below have been adapted from Fato v Regione Calabria Pty Ltd [2014] VSC 435 [95]–[106].

Relevant legal principles and statutory provisions

An order in the nature of certiorari may be granted to set aside an order of an inferior court where the court makes a jurisdictional error or an error of law which appears on the face of the record. Such an order may also be granted where the court has failed to accord procedural fairness to a party or where there is apprehended bias. Another basis for granting certiorari is where the conduct of the court deprives a party of a trial according to law.

In Craig v South Australia,[21] the High Court stated that an inferior court can, while acting wholly within the general area of its jurisdiction, fall into jurisdictional error by doing something which it lacks authority to do or by misconstruing its empowering statute and thereby misconceiving the nature of the function which it is performing or the extent of its powers in the circumstances of the particular case.[22] The Court added that, in the last-mentioned category of case, the line between jurisdictional error and mere error in the exercise of jurisdiction may be particularly difficult to discern.[23]
[21](1995) 184 CLR 163 (‘Craig’).
[22]Craig (1995) 184 CLR 163, 177–8.
[23]Craig (1995) 184 CLR 163, 177–8.

In relation to error of law on the face of the record, s 10 of the Administrative Law Act 1978 (‘ALA’) provides that ‘[a]ny statement by [an] … inferior court whether made orally or in writing … of its reasons for a decision shall be taken to form part of the decision and accordingly to be incorporated in the record’. Consistently with s 10, where an inferior court does not publish discrete reasons for a decision but provides reasons in the course of the hearing before it, such parts of the transcript as disclose those reasons form part of the record.[24]
[24]Sidebottom v County Court (Vic) (2001) 117 A Crim R 574, 579 [8]; Slater v DPP [2005] VSC 115 [14]; Harvey v County Court (Vic) (2006) 164 A Crim R 62, 66 [17].

Where certiorari is sought on the ground of jurisdictional error, breach of procedural fairness, apprehended bias or the absence of a trial according to law, the Supreme Court can have regard to the entire transcript of the hearing before the inferior court and any other relevant material placed before the Supreme Court.[25] In such cases, the Supreme Court is not confined to the record of the inferior court.
[25]Craig (1995) 184 CLR 163, 176.

Procedural fairness is directed at the fairness of the decision-making process rather than fairness of outcome, and includes a judicial obligation to afford a party a reasonable opportunity to present or meet a case.[26] Procedural fairness may be denied to a party where a court makes a decision on grounds that were not pleaded or argued and without giving the party adversely affected a reasonable opportunity to give evidence and make submissions on those grounds.
[26]McWhinney v Melbourne Health (2011) 31 VR 285, 294 [30].

The principles relating to apprehended bias were summarised as follows by Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner v Official Trustee in Bankruptcy:[27]

Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge … the governing principle is that, subject to qualifications relating to waiver … or necessity … a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle.[28]

[27](2000) 205 CLR 337 (‘Ebner’).

[28]Ebner (2000) 205 CLR 337, 344–5 [6] (citations omitted).

Their Honours stated that the application of that principle has two steps. The first step is to identify what it is said might lead a judge to decide a case other than on its legal and factual merits. The second step requires an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.[29]
[29]Ebner (2000) 205 CLR 337, 345 [8].

The appearance of impartial justice would be compromised if the words or actions of a judge conveyed the impression that he or she had preconceived adverse views about a party’s case and that those views were so strongly held that the judge was unwilling or unable to consider on their merits any submissions made, or evidence adduced, by that party which were inconsistent with those views. However, the expression of tentative views during the course of argument as to matters on which the parties are permitted to make full submissions does not manifest partiality or bias.[30]
[30]Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577, 610 [112].

In Vakauta v Kelly,[31] Brennan, Deane and Gaudron JJ stated that when comments which give rise to a reasonable apprehension of bias are made, a party with legal representation is not entitled to stand by and wait until the contents of the final judgment are known before deciding whether to attack the judgment. By failing to object to the judge’s remarks at the time they are made, the party waives any right to appeal against an adverse judgment on the ground of what was said at the trial.[32]
[31](1989) 167 CLR 568 (‘Vakauta’).
[32]Vakauta (1989) 167 CLR 568, 572. Toohey J made similar remarks: at 587–8.

A court may deprive a party of a trial according to law if the judge interferes inappropriately with the conduct of the party’s case. The proper limits of a judge’s interference with a party’s running of his or her own case were described by Denning LJ in Jones v National Coal Board[33] in the following well-known passage:

the judge is not allowed in a civil dispute to call a witness whom he thinks might throw some light on the facts. He must rest content with the witnesses called by the parties … So also it is for the advocates, each in his turn, to examine the witnesses, and not for the judge to take it on himself lest by so doing he appear to favour one side or the other … And it is for the advocate to state his case as fairly and strongly as he can, without undue interruption, lest the sequence of his argument be lost … The judge’s part in all this is to hearken to the evidence, only himself asking questions of witnesses when it is necessary to clear up any point that has been overlooked or left obscure; to see that the advocates behave themselves seemly and keep to the rules laid down by law; to exclude irrelevancies and discourage repetition; to make sure by wise intervention that he follows the points that the advocates are making and can assess their worth; and at the end to make up his mind where the truth lies. If he goes beyond this, he drops the mantle of a judge and assumes the robe of an advocate; and the change does not become him well.[34]

[33][1957] 2 QB 55 (‘Jones’).

[34]Jones [1957] 2 QB 55, 64 (citations omitted).

R v Mawson[35] sets out the principles that apply to excessive interference or involvement by a trial judge in the conduct of a criminal trial. In that context, such interference or involvement may constitute such a departure from the due and orderly processes of a fair trial as to amount to a miscarriage of justice. Such a miscarriage may arise where the judge prevents a witness from giving a full account of the facts as he or she understands them to be, or seems to identify with one or other party to the litigation.[36]
[35][1967] VR 205 (‘Mawson’).
[36]Mawson [1967] VR 205, 207.

In R v Esposito[37] Wood CJ stated that, when asking questions of a witness, a judge walks a narrow line. There is nothing wrong with questions designed to clear up answers that may be equivocal or uncertain or to identify, within reason, matters that may be of concern to the judge. However once the judge resorts to extensive questioning — particularly of the sort that amounts to cross-examination in a criminal trial before a jury — the judge is on thin ice. The ‘thinness of the ice’ will depend on the identity of the witness being questioned, and on whether the judge’s questions appear to be directed at elucidating an area of evidence that has been overlooked or left in an uncertain state, or directed towards establishing a point that is favourable or adverse to the interests of one or other of the parties.[38]
[37](1998) 45 NSWLR 442 (‘Esposito’).
[38]Esposito (1998) 45 NSWLR 442, 472.

Wood CJ cited extensively from Galea v Galea,[39] in which Kirby ACJ stated that the test to be applied in the context of excessive judicial intervention is whether the judicial questioning or pejorative comments have created a real danger that the trial was unfair. Kirby ACJ reviewed the authorities and identified a distinction between the limits of questioning or comments by a judge when sitting with a jury and when sitting alone in a civil trial. Greater latitude in questioning and comment will be accepted where a judge is sitting alone.[40] Where a complaint is made of excessive questioning or inappropriate comment, the appellate court must consider whether such interventions indicate that a fair trial has been denied to a litigant because the judge has closed his or her mind to further persuasion, moved into counsel’s shoes and ‘into the perils of self-persuasion’.[41]
[39](1990) 19 NSWLR 263 (‘Galea’).
[40]Galea (1990) 19 NSWLR 263, 281.
[41]Galea (1990) 19 NSWLR 263, 281.

The appellate court must consider the context of the whole trial and the number, length, terms and circumstances of the interventions. Interventions which suggest that an opinion has been finally reached must be distinguished from those which are provisional, put forward to test the evidence and invite further persuasion.[42] The point at which the judicial intervention occurred is also relevant — a vigorous interruption early in the trial or in the examination of a witness may be less readily excused than one at a later stage which is designed to permit the judge to better comprehend the issues and to weigh the evidence of the witness concerned.[43]
[42]Galea (1990) 19 NSWLR 263, 281.
[43]Galea (1990) 19 NSWLR 263, 281.

Statutory provisions which govern the conduct of trials by a court are relevant in deciding whether it has afforded a party a trial according to law. In the present case, the applicant relied on r 49.01 of the MC Rules which provides that, subject to any direction given by the Magistrates’ Court, the order in which evidence is to be given and addresses are to be made are as set out in that rule.

Other provisions of the MC Rules which are relevant to refusal to grant certiorari on the basis that alternative remedies exist are rr 3.02 and 59.10(3). Rule 3.02 provides that the Magistrates’ Court may extend any time fixed by any order of the Court either before or after that time expires, including where the application for the extension is made after that time expires. Rule 59.10(3) provides that the Magistrates’ Court may set aside a self-executing order or the dismissal of a complaint resulting from the failure of a plaintiff to comply with a self-executing order.

Were the grounds of review in the originating motion made out?

The applicant submitted that the magistrate did not conduct a hearing according to law because he did not act in accordance with r 49.01 of the MC Rules. This was said to be so because the magistrate did not follow the procedure of hearing submissions and evidence from the applicant and the first respondent in turn, before making a decision. The magistrate’s departure from the required procedure was said to be egregious because he made findings favourable to the first respondent on the basis that he could rely on statements made by her from the Bar table without the necessity of her giving evidence. The applicant contended that the magistrate’s jurisdiction was to conduct a hearing in accordance with r 49.01 and that his failure to comply with that rule meant that he acted without jurisdiction.

The applicant conceded that failure to comply with procedural rules, including r 49.01 of the MC Rules, would not ordinarily amount to jurisdictional error. However, he submitted that the manner in which the magistrate had conducted the hearing was so inconsistent with those rules and so unfair that the breach amounted to jurisdictional error.

The applicant argued that the magistrate denied him procedural fairness because he acted on the first respondent’s statements from the Bar table — which did not constitute evidence — and did not allow him to complete his evidence and tender documents to refute the first respondent’s statements. The applicant also argued that the magistrate formed the view at an early stage of the hearing that the 3 May 2012 agreement was unenforceable based on the first respondent’s statements and was then unwilling to consider the applicant’s evidence and submissions that contradicted that view.

The applicant submitted that the Magistrates’ Court hearing transcript formed part of the Court’s record because, although the magistrate did not formally give reasons, those reasons can nevertheless be discerned from the discussions that took place between the magistrate and Mr Doherty. The applicant contended that the transcript disclosed that the magistrate had made jurisdictional errors in the form of prejudgement, absence of neutrality, and the denial of the applicant’s right to present his case and answer the case he had to meet. Senior counsel for the applicant described the magistrate’s conduct as ‘non-judicial and bullying’.

The applicant referred to the discussion in Able Demolitions concerning the enforceability of a costs agreement made by way of settlement of outstanding legal fees. He noted that, unlike the costs agreement in Able Demolitions which infringed s 3.4.26(2) of the LPA because it was purely oral, the 3 May 2012 agreement complied with that section because it was evidenced in writing.[44]
[44]See [3] above.

The first respondent submitted that the magistrate had jurisdiction to determine whether the 3 May 2012 agreement was enforceable and thus did not act outside his jurisdiction. She contended that the issue of costs disclosure upon which the magistrate decided the proceeding was not the subject of a factual dispute between the parties and the magistrate gave the applicant a fair opportunity to give evidence and make submissions on that critical issue.

According to the first respondent, the hearing before the magistrate was fair, impartial and legally correct. She noted that the applicant was able to make submissions and give evidence, and emphasised that it was open to him to return to the witness box after the luncheon adjournment but he was not recalled.

The first respondent drew a distinction between the magistrate forming a view about the applicant’s case that was ‘wrong’, and conduct constituting jurisdictional error or unjudicial conduct. She submitted that the magistrate had not behaved in a non-judicial or bullying manner. She argued that, after hearing evidence from the applicant and submissions from Mr Doherty, he expressed the view that the applicant’s claim would not succeed, and then allowed the applicant the opportunity to amend the complaint.

The first respondent contended that there was no error on the face of the record and, in the absence of that error, the judge was correct in the exercise of his discretion not to grant any relief. According to the first respondent, no error could arise on the face of the record because the Magistrates’ Court hearing transcript does not form part of the court record and, where relief is sought on the basis of error on the face of the record, the Supreme Court is restricted to the formal court record.

The first respondent argued that there is a distinction between the ‘reasons’ given by the magistrate and the ‘transcript’. As the magistrate did not give written reasons, and no request for those reasons was made pursuant to s 8 of the ALA, the extent to which the Magistrates’ Court hearing transcript forms part of the court record was said to be limited to as much of the transcript in which the magistrate stated his reasons orally. The first respondent emphasised that the applicant had failed to delineate the passages of the transcript which were said to constitute the magistrate’s reasons and contain error.

The first respondent drew attention to the judge’s observations that the applicant had elected to continue to participate in the proceeding before the magistrate and consented to the magistrate’s order which provided an alternative remedy. She argued that the judge had correctly found that the applicant’s failure to act in accordance with that remedy was disentitling conduct in relation to his application for judicial review.

The first respondent submitted that the discretion available to the judge was exercised ‘judicially, carefully and fairly’ and in accordance with the Supreme Court’s supervisory function.

The first respondent agreed with the applicant’s submission that the 3 May 2012 agreement was evidenced in writing and thus did not infringe s 3.4.26(2) of the LPA.

In our opinion, the magistrate’s decision that the enforceability of the 3 May 2012 agreement was governed by common law contractual principles rather than the provisions of the LPA was wrong in law. It is clear from Able Demolitions that disputes between legal practitioners and clients regarding costs are governed by the provisions of the LPA and that common law principles of contract cannot apply to the extent that they are inconsistent with those provisions. Mr Doherty was correct to refer the magistrate to ss 3.4.13 and 3.4.17 of the LPA and the magistrate was wrong to ignore these provisions and rely on general — and ill-defined — notions of a legal practitioner’s disclosure obligations regarding costs.

The magistrate’s error is evident from the parts of the Magistrates’ Court hearing transcript set out at [45] and [47] above. Those parts of the transcript form part of the record of the Magistrates’ Court in accordance with s 10 of the ALA because they contain the magistrate’s reasons for his decision.

It follows that the magistrate made an error of law which appears on the face of the record. This alone enlivened the Supreme Court’s jurisdiction to grant certiorari to set aside the magistrate’s order.

While the error of law was highly significant to the outcome of the Magistrates’ Court proceeding, we are not satisfied that it was not only an error of law on the face of the record but also a jurisdictional error. The magistrate had jurisdiction to decide whether the 3 May 2012 agreement was enforceable. By erroneously determining that the enforceability of the agreement was governed by common law contractual principles rather than the provisions of the LPA, the magistrate made an error within jurisdiction.

However, in our opinion, the conduct of the magistrate denied the applicant procedural fairness and an impartial trial according to law. The passages from the Magistrates’ Court hearing transcript referred to at [37]–[49] above indicate that, at an early stage of the hearing, the magistrate departed from the conventional adversarial mode of trial and adopted an inquisitorial approach. This involved the magistrate taking control of the proceeding and eliciting information from the parties through a series of questions on issues he considered relevant. Mr Doherty was not able to conduct a proper examination in chief because the magistrate intervened and effectively cross-examined the applicant.

In the course of his cross-examination by the magistrate, at pages 22–28 of the Magistrates’ Court hearing transcript, the applicant stated that he did not provide to the first respondent estimates of solicitor-client and party-party costs prior to the making of the 3 May 2012 agreement. The transcript indicates that, at that early stage of the hearing, the magistrate formed the view that the applicant had breached his common law disclosure obligations to the first respondent and that this affected the enforceability of the agreement. Shortly afterwards, the magistrate persuaded himself that the agreement was unenforceable. This view became so entrenched in the magistrate’s thinking that, from that time, he shut his mind to anything that the applicant said in evidence or Mr Doherty put in submissions that was contrary to that view.

The magistrate’s prejudgement of the outcome of the proceeding at an early stage of the hearing was such that a fair-minded lay observer might reasonably apprehend that the magistrate might not bring an impartial mind to the resolution of the question of the enforceability of the 3 May 2012 agreement.

The magistrate also denied the applicant procedural fairness because he ignored the parties’ pleadings and re-defined the issues in the proceeding. The first respondent did not allege that the 3 May 2012 agreement was unenforceable because the applicant had not given her estimates of solicitor-client and party-party costs. She alleged that the applicant had pressured her into entering into the agreement. The applicant was not able to give evidence on that issue because the magistrate repeatedly re-directed the focus to the adequacy of the applicant’s disclosure regarding costs.

We do not accept the applicant’s submission that the magistrate prevented him from completing his evidence or from tendering documents. However, the magistrate’s statements made it quite clear that it would have been futile for the applicant to give any further evidence because the magistrate had already made up his mind about the unenforceability of the 3 May 2012 agreement.

For the reasons discussed above in relation to apprehended bias and procedural fairness, we are of the opinion that the magistrate denied the applicant a trial according to law. The magistrate’s intervention in the conduct of the proceeding was egregious. We accept that, as the first respondent was self-represented, the magistrate was obliged to assist her by, for example, advising her on procedural issues and legal options that were available to her in the conduct of her case.[45] However, the magistrate went well beyond providing legitimate assistance to the first respondent and, in effect, conducted the case on her behalf and did not require her to give evidence. In the words of Denning LJ in Jones, the magistrate dropped the mantle of a judge and assumed the robe of an advocate.[46] However, while we agree with the applicant and the judge that the magistrate had acted in a non-judicial manner, we would not describe his conduct as ‘bullying’.
[45]The principles relating to a judge’s duty to assist a self-represented litigant in order to ensure a trial is fair are discussed in Trkulja v Markovic [2015] VSCA 298 [32]–[45].
[46]See [68] above.

We do not believe that the principle of waiver prevented the applicant from seeking judicial review of the magistrate’s order. This was not a case where the applicant became aware that he had grounds for impugning the magistrate’s conduct based on apprehended bias or denial of procedural fairness and stood by until the outcome of the proceeding was known before deciding to challenge the magistrate’s decision on those grounds. This is because the outcome of the proceeding did not temporally follow the magistrate’s conduct which gave rise to those grounds but formed part of that conduct due to the prejudgement of the issue of the enforceability of the 3 May 2012 agreement. In other words, the outcome of the proceeding became known at the time the vitiating conduct became apparent.

It is true that the applicant applied to amend his complaint following an intimation from the magistrate that the unenforceability of the 3 May 2012 agreement would not preclude an alternative legal basis for claiming costs against the first respondent. However, the applicant did not have a real choice in the matter, as the magistrate made it clear that if such an application was not made, the proceeding would be dismissed.

We also note that, far from acquiescing in the course adopted by the magistrate, the applicant requested the magistrate to disqualify himself.[47] He did so twice while he was in the witness box. As the applicant is a legal practitioner who at the time was represented by counsel — and was giving evidence — it was improper and disrespectful for him to make these requests. He should have asked for a short adjournment to consult with Mr Doherty. Be that as it may, the fact that the applicant made the requests highlights his level of concern that he was not being accorded a fair or impartial hearing. Although the magistrate heard the applicant’s second request, he disregarded it.
[47]See [41] above.

Was it open to the judge to refuse relief on discretionary grounds?

At the hearing of the application for leave to appeal, the applicant made detailed submissions on whether, where jurisdictional error is established, relief by way of an order in the nature of certiorari is as of right or discretionary. After several attempts to formulate the relevant principle, the applicant submitted that, while ordinarily certiorari may be refused on discretionary grounds, the remedy is available as of right where a jurisdictional error appears on the face of the record of an inferior court. The applicant submitted that, in the present case, the magistrate made jurisdictional errors which appeared on the record and therefore the judge was wrong to refuse relief on discretionary grounds.

The applicant submitted that, where the Supreme Court has a discretion to refuse relief, one ground for doing so is that a ‘more suitable’ or ‘equally suitable’ remedy is available. According to the applicant, the option of pursuing a claim in quantum meruit was not an adequate substitute for the claim based on the 3 May 2012 agreement, which had been denied to him. In any event, so it was said, the judge failed to take into account the applicant’s explanation for his failure to utilise the alternative remedy of a claim in quantum meruit, namely, his absence overseas and his illness.

The applicant contended that, in his circumstances, the remedy of having the magistrate’s order set aside and reinstating the Magistrates’ Court proceeding was legally inferior to judicial review by the Supreme Court because it would place a magistrate in the difficult position of having to decide whether to set aside the decision of a judicial officer equal to him or her in the judicial hierarchy. The applicant also contended that the judge had failed to take into account his submission that the claim in the Magistrates’ Court had been struck out before the filing of the originating motion in the Supreme Court, which meant that, at that time, he could not have his claim determined on the merits in the Magistrates’ Court and in any subsequent appeal. Senior counsel for the applicant stated from the Bar table that the applicant was not aware that, pursuant to r 59.10(3) of the MC Rules, he could apply to set aside the magistrate’s order.

The applicant submitted that the fact that he had unsuccessfully attempted to file an amended complaint pursuant to the magistrate’s order prior to applying for judicial review of that order was an insufficient ground for refusing him relief. In support of this submission, he contended that his change in course did not cause any prejudice to the first respondent.

The first respondent submitted that certiorari is a discretionary remedy and that one discretionary basis for refusing it is where the person seeking judicial review had a suitable alternative remedy which he or she elected not to pursue.

The first respondent contended that filing an amended complaint was a more than adequate means of resolving the present dispute. She rejected the proposition that the applicant had been forced to rely only on a claim in quantum meruit, and submitted that neither the hearing before the magistrate, nor the magistrate’s order, precluded the applicant from having the merits of his claim heard. The first respondent also contended that a claim in quantum meruit is not legally inferior. According to her, both causes of action would allow the applicant to receive payment from her and, in the circumstances, the claim in quantum meruit would allow the applicant to recover more than $10,000.

The first respondent also drew attention to the applicant’s ability to apply for an extension of time to comply with the magistrate’s order, even after the time to comply had passed, pursuant to r 3.02 of the MC Rules. She noted that, despite having the means, as a legal practitioner, to comply with the magistrate’s order at the outset or to apply for an extension of time, the applicant did not do so. She also emphasised that it remains open to the applicant to seek an extension of time to file an amended complaint to plead quantum meruit or alternatively apply to set aside the magistrate’s order in its entirety. She also submitted that the applicant’s travel overseas and subsequent illness were irrelevant considerations. In any event, so it was said, even if those matters were relevant, it did not follow from the fact that they were not referred to in the judge’s reasons that he did not take them into consideration.

Counsel for the first respondent conceded that, if this Court determined on the basis of the Magistrates’ Court hearing transcript that the magistrate’s conduct involved a substantial denial of procedural fairness or gave rise to apprehended bias, then the application for judicial review should not be dismissed on discretionary grounds.[48]
[48]Transcript of Proceedings (18 October 2017) 63, 70.

In the light of this concession, which in our opinion was properly made in the circumstances of this case, it is not necessary for us to discuss the authorities dealing with the circumstances in which certiorari may be refused on discretionary grounds. We have concluded that the conduct giving rise to apprehended bias, denial of procedural fairness and the failure to conduct a trial according to law in the present case was so egregious that the magistrate’s order cannot be allowed to stand.

In our opinion, the judge erred by not deciding whether any of the grounds of review set out in the originating motion were made out. Those grounds raised serious issues about the conduct of the Magistrates’ Court proceeding and in the circumstances his Honour should have made findings in relation to them rather than proceeding on the basis of an assumption that the grounds were made out.

The judge also erred in concluding that the magistrate’s order provided the applicant with a suitable alternative remedy. As the first respondent did not deny that she entered into a contract to pay the applicant $10,000 or that she had breached that contract, a claim for specific performance of that contract is superior to a claim in quantum meruit. This is because the former is easier to prove and there is certainty as to quantum whereas the latter requires more detailed evidence and quantum is uncertain. Further, the judge erred by finding that the applicant’s failure to file an amended complaint within time disentitled him to relief without expressly referring to the applicant’s uncontradicted evidence as to why he did not comply with the time limit in the magistrate’s order. The applicant’s evidence was the primary basis upon which he relied to demonstrate that the non-compliance was unintentional and, in effect, ought not be viewed as disentitling. In those circumstances, the judge ought to have shown that he took those matters into account.

It must also be borne in mind that the alternative claim in quantum meruit only became relevant because the magistrate wrongfully foreclosed the possibility of enforcement of the 3 May 2012 agreement during the course of the hearing. As the applicant’s proceeding was based solely on the contractual claim, he was placed in the invidious position of either doing nothing and having his proceeding dismissed or applying to amend the complaint to claim costs on a quantum meruit basis, which was not as favourable as the contractual claim.

The applicant had a right to have his chosen claim dealt with according to law. The magistrate ought to have been well aware of this. It is no answer to say that, although that claim was not dealt with according to law, the applicant was given the option of having a different — and less favourable — claim dealt with according to law. It is not open to a judicial officer to pick and choose which claims of a party are to be dealt with according to law.

Our finding that, in the circumstances of this case, a claim for costs on a quantum meruit basis was less favourable to the applicant than a claim under the 3 May 2012 agreement necessarily means that the rights conferred on the applicant by rr 3.02 and 59.10(3) of the MC Rules were not suitable alternatives to the right to apply to the Supreme Court to set aside the magistrate’s order.[49] This is because the setting aside of the magistrate’s order would ensure that the applicant’s claim for costs under the 3 May 2012 agreement was reheard on its merits whereas relief under rr 3.02 and 59.10(3) would confine the applicant’s claim to one based on quantum meruit.
[49]See [74] above.

Our conclusion at [114] above does not overlook the fact that r 59.10(3) enables the Magistrates’ Court to set aside the magistrate’s order. However, it is not clear whether the setting aside of that order under that rule would enable the applicant to pursue his claim for costs under the 3 May 2012 agreement. If the setting aside of the magistrate’s order means that the proceeding remains part heard before the magistrate, it is unlikely that he would depart from his firm finding that the 3 May 2012 agreement is unenforceable. Even if the proceeding is not treated as being part heard before the magistrate, there is at least some foundation for observing that the background circumstances might appear to create a difficulty for another magistrate.

Finally, we note that the judge’s statement that it appears that the magistrate held that the 3 May 2012 agreement was unenforceable due to the applicant’s non-compliance with s 3.4.13 of the LPA is incorrect. As discussed at [45] and [47] above, the magistrate held that the LPA was irrelevant.

Grounds of appeal

It follows from the preceding discussion that Grounds 1, 3(a) and 4(b)(i) are made out. We have made some observations on Ground 3(b) above.[50] Ground 4(b)(ii) is made out to the extent that the magistrate’s conduct denied the applicant procedural fairness and a trial according to law and gave rise to apprehended bias.
[50]See [111] above.

Grounds 2 and 3(c)–(d) were not the subject of oral submissions and were not well developed by the applicant in his written submissions. These grounds ignore the applicant’s subsisting right to apply to set aside the magistrate’s order and the striking out of the Magistrates’ Court proceeding resulting from his non-compliance with that order. In these circumstances, it is not necessary for us to consider these grounds.

We have dealt with Ground 4(a) at [108]–[109] above.

Ground 5 alleges that the judge denied the applicant a fair hearing.

The applicant submitted that the judge denied him procedural fairness for the following reasons:

(a)During the hearing, other than referring Mr Nash QC to the overarching obligations imposed by the CPA and the small quantum of the claim, the judge did not indicate that he was minded to dismiss the originating motion.
(b)The first respondent did not file any written submissions and did not make any oral submissions on the hearing.
(c)The judge adjourned briefly to consider the case of He v Aloe & Co Pty Ltd[51] upon which the applicant relied for the contention that the small quantum of his claim was no bar to relief.
(d)Before the adjournment, the judge told the first respondent that he ‘[would not] do anything without hearing from [her].’[52] The judge also indicated to the applicant that he was minded to grant relief if he was satisfied that He v Aloe supported the applicant’s contention.
(e)However, upon resuming the hearing after the adjournment, the judge made his ruling without referring to He v Aloe or hearing from the first respondent.

[51][2006] VSCA 150 (He v Aloe).

[52]Transcript of Proceedings (1 March 2017) 17.

The first respondent submitted that the applicant was not denied a fair hearing. She referred to the fact that Mr Nash QC had filed written submissions as well as making oral submissions. According to the first respondent, the judge did not suggest that he would grant relief to the applicant if he was satisfied that He v Aloe supported the contention advanced by the applicant. Further, according to the first respondent, the judge’s comment that he would not make any decision without hearing from the first respondent was made in the context of reassuring her, as a self-represented litigant, that he would not make a decision adverse to her, without providing her with the opportunity to make submissions. In the circumstances, so the first respondent argued, the judge merely determined that he was able to decide the matter without the benefit of submissions from her.

We agree with the first respondent’s submissions. Nothing the judge said or did could be construed as an indication that, provided He v Aloe supported the contention advanced by the applicant, the judge would find in his favour. The judge adjourned briefly to consider He v Aloe after Mr Nash QC stated he had no further submissions to make. The judge’s decision was not based on anything said in He v Aloe. In these circumstances, the judge did not deny the applicant procedural fairness.

Conclusion

It follows from the above analysis that the application for leave to appeal will be granted and the appeal will be allowed.

The magistrate’s conduct in the present case has demonstrated the importance of judicial officers adhering to proper court processes and resisting the temptation to cut corners where the amount at stake is small or one of the parties is self-represented. Departure from proper court processes, even if it is motivated by a desire to assist a self-represented litigant and to expedite a proceeding, carries significant risk of causing more harm than good. Rather than assisting the first respondent, the magistrate’s short cuts have had the opposite effect. They have spawned review and appellate proceedings which have dramatically increased costs and delays and consumed valuable judicial resources. Contrary to the overarching purpose in s 7(1) of the CPA, the magistrate’s conduct has not facilitated the just, efficient, timely and cost-effective resolution of the real issues in dispute in this case.

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Citations

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15 November 2017