Girgis v Oueik

[2018] NSWCA 314

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Girgis v Oueik [2018] NSWCA 314
Hearing dates:	On the papers
Decision date:	14 December 2018
Before:	McColl JA; Simpson AJA
Decision:	Application for leave to appeal dismissed with costs
Catchwords:	CIVIL PROCEDURE – application for leave to appeal – where dispute about terms of agreement for installation and provision of security cameras – where primary judge disbelieved applicant – where primary judge made findings of fraud and lying under oath against applicant – where applicant made complaint to Judicial Commission while primary judgment reserved about manner in which primary judge conducted hearing – where applicant did not suggest in complaint or otherwise that primary judge should recuse himself – where no reference to complaint in primary judgment – whether arguable basis for apprehended bias demonstrated by primary judge’s failure to refer to complaint – whether incontrovertible facts or uncontested testimony identified demonstrated on arguable basis that primary judge’s rejection of applicant’s evidence erroneous – Fox v Percy (2003) 214 CLR 118; [2003] HCA 22   CIVIL PROCEDURE – application for leave to appeal – agreement for installation and provision of security cameras – whether primary judge erred in reliance on expert evidence in calculation of quantum meruit – where quantum meruit calculations would, if successful, make a difference of $6044.56 to judgment amount – where costs likely to swamp small money sum involved in dispute – necessity of finality in litigation
Legislation Cited:	Building and Construction Industry Security of Payment Act 1999 (NSW) District Court Act 1973 (NSW) Evidence Act 1995 (NSW) Interpretation Act 1987 (NSW)
Cases Cited:	Carolan v AMF Bowling Pty Ltd t/a Bennetts Green Bowl [1995] NSWCA 69 Collier v Lancer (No 2) [2013] NSWCA 186 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Kumargamage v Rallis (No 2) [2001] NSWSC 710 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305 Michael Wilson & Partners Limited v Nicholls (2011) 244 CLR 427; [2011] HCA 48 Vakauta v Kelly (1989) 167 CLR 568; [1989] HCA 44 Zelden v Sewell Henamaste Pty Ltd [2011] NSWCA 56
Category:	Principal judgment
Parties:	Michael Girgis (Applicant) Ronney Oueik (First Respondent) BBC Developments Pty Ltd (Second respondent)
Representation:	Counsel: L J Byrne (Applicant) C D Wood (Respondent) Solicitors: Abrahams & Associates Lawyers (Applicant) Paramonte Legal (Respondents)
File Number(s):	2018/222514
Publication restriction:	No
Decision under appeal	Court or tribunal: District Court Jurisdiction: Civil Citation: N/A Date of Decision: 22 June 2018 Before: Wilson SC DCJ File Number(s): 2016/140487

Judgment

1. THE COURT: By summons filed on 24 September 2018, Mr Michael Girgis seeks leave to appeal against Wilson SC DCJ’s orders of 22 June 2018 entering judgment for the first respondent, Mr Ronney Oueik, in the sum of $81,042.35 including interest. [1] Leave to appeal is required because the judgment does not involve a matter at issue amounting to or of the value of $100,000. [2]

   1.    Oueik v Girgis (District Court (NSW), unrep, 22 June 2018).

   2. District Court Act 1973 (NSW), s 127(2)(c)(i).

Background

2. The controversy between the parties arises out of an agreement between Mr Oueik and Mr Girgis in or about December 2015 for the latter, who traded as Smartcam Security, to install security cameras at Mr Oueik’s home. At some stage Mr Oueik gave Mr Girgis his credit card details, on Mr Oueik’s evidence, which the primary judge accepted, to enable Mr Girgis to debit the deposit of $10,000 for the installation. Over the next 2 months, Mr Girgis debited $80,572 to the credit card which, at trial, he contended were amounts due for the installation under the terms of the agreement he propounded. These debits were apparently effected in the name of ABBA TEJI Pty Ltd (ABBA), Mr Girgis’s company.

3. In addition, Mr Girgis received $11,350 from Mr Oueik purportedly due under an invoice for the works. Mr Oueik paid, or caused his company, BBC Investments Pty Ltd (BBC), the second respondent, to pay the invoice. He said that at the time he was unaware of the credit card debits (BBC cheque). [3] Mr Oueik also paid Mr Girgis an amount of $49,174.95 to discharge an order Mr Girgis obtained in the Local Court of New South Wales, presumably in relation to the installation of the security cameras, pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) (Local Court judgment).

   3.    For convenience, unless the context otherwise requires, we refer to the respondents together as “Mr Oueik”.

4. Mr Oueik brought proceedings in the District Court against Mr Girgis to recover what he contended to be excess amounts charged to his credit card. Mr Girgis cross-claimed to recover the amounts he said were due and payable under a quantum meruit.

5. Although there are a number of different issues raised on the leave application, the principal issue at trial, and on the leave application, is whether, pursuant to the agreement, Mr Girgis was permitted to charge up to $150,000 for installing the cameras or whether the contract limited him to a maximum of $50,000 (inclusive of GST and a margin of about 15%). The agreement was described in Mr Oueik’s evidence as being for $50,000 “tops”. [4]

   4. Primary judgment at [48].

6. Mr Girgis contended it was not so limited. Rather, he argued that it was agreed between Mr Oueik and himself that Mr Girgis would not charge any more than $150,000, and that he would invoice BBC (not Mr Oueik directly) in respect of the contracted works. Mr Girgis gave evidence that Mr Oueik told him he “would get GST credits and company tax deductions” and so he “didn’t think twice about” invoicing BBC. [5]

   5. Ibid at [63].

7. An expert witness, Mr Scott Myles, gave evidence over objection. His evidence was directed to the reasonable cost of installation of the security system.

Primary judgment

8. There was no written contract between the parties. Their agreement was said to arise from a conversation which took place between Mr Oueik and Mr Girgis in or about December 2015. As the primary judge noted, “[l]ike virtually every other factual matter in these proceedings, the terms of the contract and the content of the discussions that took place at that time are disputed”. [6] It was common ground at the trial, which ran for four days in November and December 2017, that the factual controversy could only be resolved by the primary judge finding either Mr Oueik or Mr Girgis was lying. [7]

   6. Ibid at [3].

   7. Ibid at [43].

9. The primary judge accepted Mr Oueik’s version of the agreement, finding that Mr Girgis’s evidence was “inconsistent and vague”,[8] “evasive and convoluted”,[9] that he was “attempting to confuse the court”,[10] and that it “became obvious [he] had changed his evidence” in respect of the critical question being the expenses he was authorised to charge to Mr Oueik’s credit card. [11] He found Mr Oueik to have been “a credible and reliable witness” who did his best to answer questions honestly.

   8. Ibid at [79].

   9. Ibid at [90].

   10. Ibid.

   11. Ibid at [92].

10. Although the primary judge accepted Mr Oueik’s version of the agreement, he nevertheless held that the terms of the contract were not sufficiently precise or certain to be binding on the parties[12] and must be void for uncertainty. [13]

    12. Ibid at [152].

    13. Ibid at [155].

11. Accordingly, his Honour resolved the issue of the amount outstanding between the parties on a quantum meruit basis.

12. In order to meet Mr Girgis’s quantum meruit claim, Mr Oueik called a Mr Scott Myles, director of Independent Consultancy Services, to give expert evidence “directed to the costs of installing a security system”. [14] His Honour held that Mr Myles was appropriately qualified to give evidence in respect of such matters. [15]

    14. Ibid at [122].

    15. Ibid.

13. Mr Myles’ view was that the amounts Mr Girgis charged were “excessive ‘when compared to industry norms’.”[16] He also said that the 15% margin Mr Oueik claimed had been agreed was “definitely low”. [17]

    16. Ibid at [124].

    17. Ibid at [126].

14. Overall, the primary judge found Mr Myles “demonstrated both knowledge and impartiality” and that his expert opinion was “fair, rational and reasonable”. [18] Accordingly, his Honour had no hesitation in accepting his opinion that the quantum meruit should be calculated on an “industry standard margin” of 30%. [19]

    18. Ibid at [148].

    19. Ibid at [127].

15. Finally his Honour held that BBC and ABBA were not parties to the agreement and dismissed the claims by and against them. [20]

    20. Ibid at [166].

16. The primary judge found Mr Oueik had paid $140,863.58 comprising the credit card debits, the BBC cheque and the Local Court judgment. He accepted Mr Myles’ evidence that the costs and value of the quantum meruit claim was $61,120.90 (plus GST). After setting off the quantum meruit against the total amount Mr Oueik had paid Mr Girgis, Mr Oueik was entitled to damages of $73,630.58 (plus interest) and costs. [21]

    21. Ibid at [158] – [165].

17. On 1 August 2018, the primary judge gave judgment for Mr Oueik against Mr Girgis in the sum of $81,042.35 and ordered Mr Girgis to pay Mr Oueik’s costs as agreed or assessed. He also directed the Registrar of the District Court to refer the pleadings, exhibits and transcript to the Office of the Director of Prosecutions (ODPP) to consider whether Mr Girgis should be charged in respect of potential criminal conduct referred to in his reasons, arising from the use of Mr Oueik’s credit card, and swearing an affidavit in the Local Court which he knew to be false and perjury.

18. On 19 July 2018 Mr Girgis filed a notice of intention to appeal which advised his intention to appeal before 22 September 2018. In fact, 22 September 2018 was a Saturday. His summons seeking leave to appeal was filed on 24 September 2018. Accordingly it was filed in time. [22]

    22. Interpretation Act 1987 (NSW) s 36(2)(b).

19. After the primary judgment was delivered, Mr Girgis also sought a stay of the judgment and to set aside the ODPP referral, applications which apparently went for a day and a half in July and August 2018. He also sought a non-publication order, again in July 2018. He was unsuccessful in all respects.

Complaint to the Judicial Commission

20. On 22 March 2018, while the primary judge’s decision was reserved, Mr Girgis wrote to the Judicial Commission of New South Wales making various allegations of bias in relation to the primary judge’s conduct at the hearing. It is unnecessary to detail those allegations. He did not suggest in that letter, at trial or in any of the several applications to the primary judge to which we have referred that his Honour should recuse himself.

21. After judgment was delivered on 22 June 2018, Mr Girgis became aware that the Judicial Commission had forwarded the complaint to the primary judge on 18 April 2018.

22. Mr Girgis notes that the primary judge did not refer to the complaint in his reasons or otherwise disclose its receipt to the parties before delivery of the primary judgment.

Leave application

23. Mr Girgis contends that leave to appeal should be granted on several bases. The first was that there was a reasonable apprehension of bias. The second was the admission of the expert evidence. The third was asserted factual errors in the calculation of the quantum meruit. Others concerned findings of fraud, lying under oath; and, generally, the primary judge’s rejection of his evidence as to the terms of the agreement, the cost of goods and services and the quantum meruit for such goods and services.

24. Mr Oueik opposes leave to appeal and contends that the issue Mr Girgis raises concerning the quantum meruit calculations would, if successful, make a difference of $6044.56 to the judgment amount, a calculation which Mr Girgis accepts.

Applicant’s submissions

25. Mr Girgis submits that leave should be granted for the following reasons.

26. First, because the amount at stake is significant and, if his evidence as to the terms of the agreement or the quantum meruit for goods and services is accepted, he will be relieved of the entire judgment below.

27. Secondly, Mr Girgis submits there is a sound case that the primary judgment is affected by one or more legal or factual errors.

28. Mr Girgis submits that apprehended bias arises due to his having sent his complaint to the Judicial Commission which, in turn, had forwarded it to the primary judge before judgment was delivered. He says the complaint went beyond a “robust critique” and that by not disclosing and dealing with the complaint his Honour did not dispel the apprehension of bias arising from its receipt. Mr Girgis submits he has not waived the right to complain about bias by not seeking the primary judge’s recusal, as the circumstances of apprehended bias did not occur while the trial was continuing and the primary judge did not disclose the complaint. That proposition is incorrect. The complaint concerned the manner in which the primary judge had conducted the hearing.

29. Secondly, Mr Girgis submits Mr Myles lacked the expertise to support his opinion that the “industry standard margin” was 30% and that his opinion was not set out sufficiently to satisfy Makita (Australia) Pty Ltd v Sprowles. [23] On a factual basis, Mr Girgis submits his Honour erred in deriving the quantum meruit adopting such a margin. He complains the primary judge treated the terms “mark-up” and “margin” interchangeably.

    23. (2001) 52 NSWLR 705; [2001] NSWCA 305.

30. Mr Girgis submits the evidence did not establish he deliberately and fraudulently used Mr Oueik’s credit card, contending, “[s]o flagrant a fraud would have been most surprising”. He submits the finding of swearing a false affidavit does not go so far as to establish anything more than a poorly worded affidavit. He submits that the terms of the agreement and the quantum meruit were based on those erroneous findings and that his documentary evidence, which he did not identify, ought to have been preferred to the hypothetical evidence of Mr Myles.

31. Thirdly, Mr Girgis submits he will suffer a significant injustice if leave is not granted, including continuing liability for a significant amount of money, stress and concern arising from having been referred to the ODPP for investigation and the opprobrium of the primary judge’s findings of fraud and perjury. [24]

    24. At [156].

Respondent’s submissions

32. Mr Oueik submits leave to appeal should be refused because the appeal was filed late and leave has not been sought to extend time; the prospects of success are weak and the arguments advanced fail to establish the primary judge was arguably wrong; and the allegations of apprehended bias were unfounded and “caused by” Mr Girgis.

33. Mr Oueik also contends that given the limited amount in dispute, there is no question of principle or matter of general public importance or injustice which outweighs the importance of finality to this litigation. He contends that the costs are likely to swamp the amount in issue. He points out that Mr Girgis himself has claimed he is impecunious and unable to pay the judgment and that his application to pay it by instalments had been rejected on the basis the financial statements he filed in support did not demonstrate his capacity to pay the instalments offered.

34. Mr Oueik submits that Mr Girgis’s “spurious complaint” to the Judicial Commission was a “flagrant and deliberate” attempt to set up an allegation of bias. He submits that the implicit suggestion in Mr Girgis’s submissions that he did not know his complaint would be provided to the primary judge should be rejected as the complaint itself refers to “the reality of the risk” of making such a complaint. Mr Oueik submits that there is no basis on which an inference of a reasonable apprehension of bias from the fact of the primary judge not disclosing the complaint could be made.

35. Further, Mr Oueik submits that Mr Girgis has waived his right to complain of bias as he failed to raise the allegation at trial or in two notices of motion filed on 4 July 2018 (seeking non-publication orders) and 19 July 2018 (seeking a stay and setting aside order 6) and determined by Wilson SC DCJ.

Admissibility of evidence/calculation of the quantum meruit claim

36. Mr Oueik notes that Mr Myles’s expertise was determined through a voir dire. In addition, Mr Girgis’s counsel’s cross-examination of Mr Myles on the margin issue was limited to the following exchange:

“Q. There you say also that 30% is regarded as an industry norm—

A. Mm-hmm.

Q. ––and this is based on your experience is it?

A. Correct.”

37. Further, he points out Mr Girgis’s counsel accepted the matter should proceed on the basis of a 30% margin on the quantum meruit claim which should be applied to the base cost of labour and equipment. Mr Oueik submits that having not objected to the 30% figure at the hearing, and having encouraged its use in the determination of the issues (which resulted in orders that the parties prepare tables of submissions using calculations based on a 30% margin), Mr Girgis should not now be permitted to run an argument on appeal which conflicts with his conduct of the trial.

38. Mr Oueik submits that even if Mr Girgis is correct about the calculation of the quantum meruit claim this would lead only to an alteration of the judgment in the sum of $6,044.56, which Mr Oueik contends is not a significant sum.

Findings of a false affidavit, lying under oath and fraudulent use of a credit card

39. Mr Oueik submits there was a proper basis for all the findings on these matters.

40. He submits there was ample evidence to infer his credit card had been used fraudulently. There was no correlation between Mr Girgis’s expenses and the amounts charged to his credit card. [25] Indeed, he points out that on two occasions during his evidence, Mr Girgis sought certificates under s 128 of the Evidence Act 1995 (NSW). Further, Mr Girgis admitted that the affidavit he relied on in the Local Court proceedings was false. Mr Girgis had chased up payment of the invoice of $11,350.63 without disclosing that he had already charged $54,000 to Mr Oueik’s credit card.

    25.    Primary judgment at [94] – [99].

41. Mr Oueik submits that Mr Girgis has not identified any uncontroverted testimony or contemporaneous documents that would compel the acceptance of his evidence. He submits it is not clear how the primary judge could arguably be wrong in making his credit-based finding as to the evidence the credit card had been used fraudulently.

Reply submissions

42. Mr Girgis acknowledges the amount in dispute is below the statutory threshold, but submits that the bias point puts the entire judgment amount at stake.

43. Mr Girgis submits that apprehension of bias remained a live issue through the period the primary judgment was reserved; there is no evidence that the complaint was a deliberate attempt to create the apprehension of bias; nor is there evidence he was subjectively aware the complaint would be forwarded to the primary judge. He filed an affidavit affirmed on 3 December 2018 in which he asserted he did not send the complaint about the primary judge to the Judicial Commission for the purpose of creating an apprehension of bias or to create an appeal point in the event he lost the case.

Consideration

44. For present purposes, we accept that a copy of Mr Girgis’s complaint to the Judicial Commission was forwarded to the primary judge on 18 April 2018. We do not accept that the primary judge’s failure to refer to that complaint in the primary judgment creates any reasonable apprehension of bias on his Honour’s part or raises an arguable issue that such a conclusion might be warranted.

45. We do not accept that the mere fact of receipt of a complaint means that his Honour was not “capable of putting such allegations out of his … mind in the further determination of the case”. [26] As we have noted, the complaint did not suggest that the matters to which it referred meant the primary judge ought to recuse himself. That would be a serious step for his Honour to have taken after a trial of 4 days in which it appears none of the matters the subject of the letter had been the subject of complaint. Although the complaint was made on 22 March 2018, Mr Girgis made no attempt to apply to the judge to recuse himself. Judgment was delivered on 22 June.

    26. Kumargamage v Rallis (No 2) [2001] NSWSC 710 at [21] per Austin J.

44. In our view, the primary judge would have been entitled to form the view that Mr Girgis had waived any right to seek the recusal of the judge on the basis of the matters he alleged had occurred in the course of the trial,[27] or, at least, did not object to his Honour proceeding to determine the case. His Honour was also entitled to form the view that if Mr Girgis was of the view that any matters in the complaint might affect his determination of the case, it was open to him to draw those matters to Mr Oueik’s attention and ask that the court be reconvened to determine whether his Honour ought to recuse himself.

    27. Vakauta v Kelly (1989) 167 CLR 568 at 577 – 579 per Dawson J; at 587 – 588 per Toohey J (Brennan, Deane and Gaudron JJ agreeing); [1989] HCA 44.

45. It is a curious submission, in our view, that absent any of these circumstances, the mere failure of the primary judge to refer to the complaint in his reasons meant that his Honour was disqualified from taking a step he was not asked to: namely, refrain from determining the case.

46. In our view, Mr Girgis has not identified any matter, on an objective basis, which would demonstrate that the mere receipt by the primary judge of the complaint, and his Honour’s failure to disclose it, gave rise to an apprehension of bias, let alone the implicit submission that his Honour had not brought an impartial mind to bear upon the issues to be decided. [28]

    28. Michael Wilson & Partners Limited v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at [67] per Gummow ACJ, Hayne, Crennan and Bell JJ.

47. Secondly, Mr Girgis’s complaint about the primary judge’s use of the “industry standard margin of 30%” was clearly not the approach he took at trial. Once the objection to Mr Myles’s expertise was resolved (and Mr Girgis has not identified any reason to conclude there was any arguable error on his Honour’s decision in that respect), it is apparent that Mr Girgis’s counsel did not challenge in any, or in any effective way, Mr Myles’ opinion about the 30% margin.

48. Further, as Mr Oueik submits, Mr Girgis’s counsel accepted, in response to a question from the primary judge, that it was correct to “determine the base cost of labour and equipment and apply a 30% margin to that.” The suggestion that the primary judge confused the notion of a “mark up” and a “margin” is not a matter which could arguably be challenged if leave were to be granted.

49. Thirdly, insofar as Mr Girgis complains that the primary judge erred as a matter of fact in rejecting his evidence concerning the agreement with Mr Oueik, it is sufficient to note that the primary judge completely rejected Mr Girgis as a witness of truth. Mr Girgis has not identified any incontrovertible facts or uncontested testimony which demonstrate, on even an arguable basis, that the primary judge’s conclusion in this respect was erroneous. [29]

    29. Cf Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [28] per Gleeson CJ, Gummow and Kirby JJ.

50. Fourthly, insofar as Mr Girgis seeks to complain about the injustice he will suffer if the primary judge’s findings of fraud and perjury remain, while that may be a legitimate consideration, “it is not the law that anyone who has been found dishonest should be granted leave to appeal.”[30]

    30. Zelden v Sewell Henamaste Pty Ltd [2011] NSWCA 56 at [17] per Campbell JA (Young JA agreeing).

51. The same can be said about Mr Girgis’s concern about the matter having been referred to the ODPP for investigation. This court will not lightly interfere with a conclusion of a primary judge that the evidence disclosed matters which warranted investigation in that context. In any event, as we have said, Mr Girgis has not identified any arguable basis upon which it might be found that the primary judge erred in failing to accept him as a witness of truth nor, we would add, in concluding that Mr Girgis had engaged in criminal conduct arising from the use of Mr Oueik’s credit card and by swearing an affidavit in the Local Court which he knew to be false and lying under oath.

52. Mr Girgis submits that acceptance of his submission that there was an apprehension of bias could lead to the primary judgment being set aside. Even if that were the case, it would be only be on the basis that there should be a new trial. Having regard to the fact that Mr Girgis does not dispute that, at best, even on his quantum meruit claim he would could only improve his position by an amount of $6,044.56, and having regard to the costs which have already been expended on this dispute, that is another reason for refusing leave to appeal. Where small claims are involved there must be early finality and determination of the litigation, otherwise the costs involved are likely to and in this case, clearly would, swamp the money sum involved in the dispute. [31]

    31. See Carolan v AMF Bowling Pty Ltd t/a Bennetts Green Bowl [1995] NSWCA 69 at 6 per Cole JA.

53. In our view, Mr Girgis has not demonstrated any substantial reason warranting appellate review of the primary judgement. In particular, he has not demonstrated any error of principle which if uncorrected will result in substantial injustice. In such circumstances, there being only a small amount in issue, leave to appeal should be refused with costs. [32]

**********

32. See Collier v Lancer (No 2) [2013] NSWCA 186 at [7] – [8] per Ward and Leeming JJA.

Endnotes

Decision last updated: 14 December 2018