Guneser v Aitken Partners
[2020] VSC 210
•24 April 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2018 01010
| GENCO GUNESER | Appellant |
| v | |
| AITKEN PARTNERS PTY LTD (ACN 128 769 602) (trading as ‘Aitken Partners’) | Respondent |
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JUDGE: | Macaulay J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 18 February 2020 |
DATE OF JUDGMENT: | 24 April 2020 |
CASE MAY BE CITED AS: | Guneser v Aitken Partners |
MEDIUM NEUTRAL CITATION: | [2020] VSC 210 |
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APPEALS ─ Appeal from a decision of a Costs Judge affirming a decision of a Costs Registrar in respect of the taxation of costs ─ Where appeal is in the nature of rehearing ─ No legal, factual or discretionary error shown ─ Appeal dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Appeared for himself | |
| For the Defendant | Ms C Harris QC with Ms L Dawson | Aitken Partners Pty Ltd |
HIS HONOUR:
Introduction
The appellant, Genco Guneser, has appealed a decision of an associate judge who reviewed the orders made by a costs registrar in taxing legal costs. The associate judge affirmed the cost registrar’s assessment of the professional costs and disbursements payable by Mr Guneser to the respondent, Aitken Partners, an incorporated legal practice, for acting on his behalf in litigation in the County Court of Victoria.
But the associate judge disallowed Aitken Partners’ professional costs for acting for itself on the taxation and, further, refused to award Aitken Partners its professional costs for acting for itself on the review. Instead, in each instance, the associate judge allowed Aitken Partners only its disbursement costs. Aitken Partners has cross-appealed against each of those orders.
In these reasons I explain my decision to dismiss Mr Guneser’s appeal. In due course I will publish separate reasons for decision in respect of Aitken Partner’s cross-appeal.
Background
On 14 February 2018 Aitken Partners commenced an exchange with Mr Guneser for the purpose of negotiating a costs agreement in accordance with the provisions of the Legal Profession Uniform Law Application Act 2014 (Vic) (Uniform Law). The agreement concerned the costs for the firm to act for Mr Guneser in a County Court proceeding against a Mr Gultekin Dolas in relation to a joint venture to carry out a property development. Ultimately, Mr Guneser signed a costs agreement on 2 March 2018. At his request, the agreement was a fixed fee agreement.
Significantly, the primary clause in the agreement (clause 1) was as follows –
We have agreed a fixed fee of $55,000 plus GST for all necessary work in relation to your dispute with Mr Dolas up to and including the County Court trial set down for 29 May 2018. For the avoidance of doubt, this amount is payable whether or not the matter settles at any stage up (sic) before the commencement or conclusion of the trial.
Additionally, the agreement provided for what would occur should Mr Guneser cease using the firm as his solicitors (clause 7):
You may end our engagement by written notice at any time. If this occurs then any amount outstanding from the entire fixed sum amount of $55,000 plus GST will be charged and become immediately payable.
By 9 April 2018 Mr Guneser was fiercely alleging deficiencies in the firm’s conduct of his litigation against Mr Dolas. In particular, he was emphasising his own religious and cultural identity as a Kurdish Alewite from Kurdistan and what he saw as the fascist and genocidal behaviours of Mr Dolas and his solicitor. He complained about the firm’s failure to make certain investigations into the background of Mr Dolas, its failure to raise the religious and cultural issues before the court, its failure to take steps to remove Mr Dolas’s solicitor from acting on his behalf, and a number of other matters which Mr Guneser saw as important to his case. He alleged that the firm had various conflicts of interest because it would not do as he required and he concluded by stating that it must immediately cease to represent him and inform the County Court that it had “been sacked”.
In a lengthy letter dated 10 April 2018, Mr Andrew Bloggs, a principal of the firm, set out a response to each of Mr Guneser’s complaints expressing the view that the matters that he raised were not relevant to the court dispute or would not assist him in the proceeding. In relation to the termination of the retainer, Mr Bloggs stated that it was the firm’s view that “none of the matters you have raised justify the termination of our retainer and certainly have had no adverse impact on your claim”. Mr Bloggs referred to the opinion of the barrister briefed in the matter that Mr Guneser had good prospects of success and that the firm had undertaken all the steps agreed at the recent conference with the barrister in order to progress the claim. Nonetheless, the firm accepted that Mr Guneser was entitled to terminate the retainer at any point but reminded him that, in accordance with the costs agreement, Mr Guneser would still be required to pay the agreed fixed fee of $55,000 plus GST and any disbursements incurred.
In the event, Mr Guneser insisted on the termination of the retainer.
On 24 April 2018 the firm wrote to Mr Guneser enclosing its final invoice in relation to the matter. Rather than charging the full $55,000 for its professional costs it “waived” $20,000 of that amount and, instead, charged $35,000 plus GST together with $4,620 for counsel’s fees and $184 for other disbursements, a total of $43,304. $10,000 held in trust for fees was deducted from the total, leaving an outstanding amount of $33,304.
Thereafter, the relevant procedural steps were as follows:
(a) on 15 August 2018 Mr Guneser filed a summons for taxation of the claimed costs;
(b) on 26 April 2019 Costs Registrar Condini taxed and allowed the firm’s costs arising from the fixed costs agreement of 2 March 2018 in the sum of $43,304, deducted the sum applied from Trust and ordered Mr Guneser to pay the balance of $33,304 together with the firm’s costs of the summons for taxation fixed in the amount of $13,500.
(c) on 9 May 2019 Mr Guneser filed a Notice of Application for Review of the costs registrar’s order of 26 April 2019;
(d) on 26 September 2019 Wood AsJ, a Costs Judge exercising the powers of a judicial registrar pursuant to r 63.56.2 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), confirmed the orders of the costs registrar with respect to the taxation of costs, set aside the order for the payment of the firm’s costs of the taxation, restricting them to reasonable disbursements only (to be assessed later), and published reasons for doing so;
(e) on 12 November 2019 Wood AsJ made final orders with respect to the firm’s costs, both of the taxation and of the review, and published reasons for doing so;
(f) on 21 October 2019 Mr Guneser filed a Notice of Appeal from Wood AsJ’s order of 26 September 2019;
(g) on 13 November 2019 the firm filed a Notice of Cross-Appeal against the orders of Wood AsJ made 26 September 2019 and 12 November 2019 in relation to its costs of both the taxation and the review;
(h) following numerous directions hearings, I conducted an oral hearing of both the Appeal and Cross-Appeal on 18 February 2020.
Costs registrar’s decision
In his reasons for decision the costs registrar explained in great detail the opportunities given to Mr Guneser to put forward any coherent objections to the fees charged under the fixed costs agreement. In particular, Mr Guneser was invited to raise any objections to the validity of the agreement itself. After some months of indulging Mr Guneser’s requests, excuses, recusal applications and, ultimately, unruly in-court behaviour, the costs registrar, with great patience and forbearance, finally ruled on the taxation in favour of the firm, there being no relevant or intelligible contrary argument put by Mr Guneser. The costs registrar concluded (at paragraphs 55 and 56):
The Applicant’s material did not address the Respondent’s entitlement to costs pursuant to the fixed costs agreement. He did not put forward any counter arguments to the Respondent’s written submissions with respect to the recovery of the amount sought. The Applicant did not at any time demonstrate any intention to make submissions with respect to the quantum of costs recoverable. He was solely focused on his demand that I disqualify myself from further hearing the matter.
There being no arguments put forward by the Applicant in opposition to the Respondent’s claim and, the Court having satisfied itself of the reasonableness of the claim, the Court made an order in the sum of $43,304.00 (inclusive of professional fees, disbursements and GST). The Court also noted that $10,000.00 has already been paid (an amount applied from Trust), leaving a balance to be paid by the Applicant in the sum of $33,304.00.
The costs registrar then dealt with the costs of the taxation itself. He took into account a Calderbank letter sent to Mr Guneser on 25 October 2018 offering to settle the taxation for the payment of $25,000 only. The registrar extended further latitude to Mr Guneser to give him time to respond to the application for the costs of the taxation. Having heard all submissions that Mr Guneser chose to make the registrar considered the amount claimed by the firm, made such reductions as he considered appropriate and fixed the costs at $13,500, those costs being assessed on an indemnity basis after 25 October 2018.
Associate judge’s decision
The matter came on for review of the costs registrar’s decision before the associate judge. In his reasons for judgment dated 26 September 2019,[1] his Honour set out a brief history of the background to the proceeding and then turned to the relief claimed by Mr Guneser on the review. That relief was set out in a document filed by Mr Guneser, summarised by the associate judge at paragraphs 34 to 36 -
The applicant’s Review document sought relief in the form of two options outlined under the heading ‘Conclusion – Remedy’.
Option 1 was a letter of apology from Andrew Blogg which states ‘he has no links to genocide of Indo Europeans namely Kurds (Yezidis) and Armenians.’ The applicant also seeks a refund of the $10,000 paid and an acknowledgment that he owes ‘zero dollars’. The applicant also required a written undertaking from Mr Blogg that ‘he would stop bullying and harassing me’. Option 1 also included a requirement for the Costs Registrar to write a letter of apology for ‘abusing his power and causing hardship’.
Option 2 was ‘I as citizen in a democratic country protect and defend my rights to the very end.’
[1]Guneser v Aitken Partners [2019] VSC 649.
The associate judge summarised the issues raised by Mr Guneser in his Review document –
The applicant’s Review document is eight pages. The document raises a number of issues. Importantly and unfortunately, none of them address the findings made by the Costs Registrar about the validity of the Costs Agreement, the quantum allowed for costs on a fair and reasonable basis, and the exercise of his discretion in relation to the costs of the proceeding. The issues raised in the Review document can be summarised into topics as follows:
The poor health of Mr Helman and his withdrawal from acting in both this proceeding and the County Court proceeding.
The fact that both proceedings were on foot at the same time.
The applicant’s parlous financial circumstances.
Allegations that the lawyer acting for the opposing party in the County Court proceeding is an ‘Islamic State neo natzi’(sic) who supported Armenian genocide and that his own former lawyer (Mr Blogg) aided and abetted ‘natzi (sic) fascists’, was linked to them and had been bullying and harassing him in the conduct of this proceeding.
Allegations that the Costs Registrar infringed the applicant’s rights, and abused his position and authority.
The associate judge referred to a number of other documents that were filed by Mr Guneser ahead of the oral hearing and described the encouragement given to Mr Guneser, at the oral hearing, to focus on the real issues, namely, any errors that had been made by the costs registrar in relation to the validity and effect of the costs agreement, the quantum of costs and the costs orders made in relation to the proceeding. Submissions were made by Mr Guneser to the effect that the firm had been negligent and had adopted a deliberate strategy to obstruct and delay the progress of the County Court case.
After listening to the submissions and considering the material filed the associate judge was unable to conclude any merit in those submissions. He identified three principal allegations of negligence or obstruction on the part of the firm as set out in the documents and he addressed each one in turn. Having done so, the associate judge then drew the following conclusions (paras 51-54, and 58, citations omitted) —
The applicant has not identified any specific error in relation to the validity of the Costs Agreement, the quantum charged or the costs order made in relation to the proceeding. At the hearing and in their written submissions the respondent relied upon the fact that the Costs Registrar had exercised a discretion when determining fair and reasonable costs. A clear error in relation to the exercise of a discretion had to be demonstrated by the applicant on any review. The respondent relied upon relevant passages from House v The King and Schweppes Limited v Archer.
The focus in the Review document and applicant’s written submissions has centered around allegations of bias and allegations about the standard of work performed by the respondent. At the hearing, when pressed in relation to errors made by the Costs Registrar, none were forthcoming even though this was clearly flagged by the respondent’s written submissions dated 27 August 2019 and several times in their oral submissions at the hearing. The respondent also highlighted the failure of the applicant to address the validity of the Costs Agreement. The applicant was encouraged to listen carefully and then given an opportunity to reply at the hearing but did not address the issue. The applicant’s focus in reply was on Mr Atlas (who represented the defendant in the County Court), the respondent’s alleged deliberate strategy to obstruct the progress of that proceeding, their failure to obey his instructions, and the Costs Registrar’s error to not adjourn the hearing on 26 April 2019.
In relation to the allegation by the applicant that the respondent refused to obey instructions it is worth stating that the Legal Profession UniformLawAustralian Solicitors’ Conduct Rules 2015 provide that a solicitor is not a mere ‘mouthpiece’ for the client and is not bound to do everything he or she is instructed to do. Those same Rules also state that the duty to a client is not breached if a course is adopted contrary to instructions if the issues are confined to what a solicitor believes to be the real issues, and the case is presented as ‘quickly and simply as may be consistent with its robust advancement’.
The applicant advanced no argument in relation to the validity of the Costs Agreement other than to say that it was for a fixed sum to the conclusion of the trial and the respondent did not complete the retainer. This ignores that they were prevented from doing so by the applicant’s decision to terminate the retainer and the wording of the Costs Agreement reproduced at paragraph 13 above.
…
The real issues underpinning the findings and conclusions of the Costs Registrar in relation to proceeding are the validity of the Costs Agreement, the assessed quantum of the respondent’s costs on a ‘fair and reasonable’ basis, and the costs of this proceeding. The applicant missed, and then refused, numerous opportunities to participate in hearings about those issues before the Costs Registrar. They were strategic decisions he made. He has now had another opportunity to participate and has done so.
Having observed that Mr Guneser had not shown the costs registrar’s decision to be affected by error, the associate judge considered the merits of the taxation for himself (at paras 59, 62 and 63) –
Irrespective of what has occurred in the process, the substantive decision made by the Cost Registrar was clearly correct. The Costs Agreement makes it clear that irrespective of any basis to terminate the retainer the applicant was liable for the sum of $55,000 plus GST in relation to the costs component.
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The Costs Registrar concluded that the discounted figure of $35,000 was fair and reasonable. Having considered the respondent’s initial written submissions dated 25 January 2019 that were before the Costs Registrar the discounted figure of $35,000 plus GST was clearly reasonable, and less than the respondent was entitled to recover under the Costs Agreement.
… The applicant bears the onus to demonstrate that the legal costs claimed are not fair and reasonable for the work performed. This has not occurred. In fact the discount offered by the respondent occurred in circumstances where there was no obligation to do so under the Costs Agreement.
The hearing of the appeal
As noted, the oral hearing of the application for leave to appeal against the decision of Wood AsJ ultimately came before me on 18 February 2020. At a directions hearing prior to the final oral hearing Mr Guneser had made various applications, on late notice, that the court take steps to arrange pro bono representation for him and that the court should obtain the evidence of an expert to assist his appeal. Both applications were refused for reasons given on each occasion. Those refusals in turn prompted Mr Guneser to suggest that he would make an application that I should recuse myself.
At the oral hearing I enquired whether Mr Guneser intended to make an application that I should recuse myself. After some discussion, he made that application. In substance it was put on the basis that I had made decisions on the previous occasion which aligned with submissions made by Aitken Partners and therefore I was favouring Aitken Partners. I endeavoured to point out to Mr Guneser that the mere fact that I did not accede to his applications ought not of themselves cause him to think that I was not disposed to hear and decide the appeals impartially. I tried to assure him that I would. I declined Mr Guneser’s application that I should recuse myself. I was not persuaded that a fair-minded lay observer might reasonably apprehend that I might not bring an impartial and unprejudiced mind to the resolution of the question that I was required to decide.[2] In response, Mr Guneser announced he did not wish to participate further in the hearing of the appeal and cross-appeal. After numerous attempts were made to persuade Mr Guneser to reconsider and to make such submissions as he thought appropriate, Mr Guneser left the hearing. In the circumstances I was not inclined to delay the proceeding any further but, rather, thought it appropriate to continue with the hearing of both the appeal and cross-appeal in his absence.
[2]Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337.
Principles of law on appeal
The appeal and cross-appeal are brought by notice under r 77.06 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic). Such appeals are no longer by way of rehearing de novo. Instead, they are rehearings which, in the absence of further evidence or a change in the law, ordinarily require the appellant to show legal, factual or discretionary error on the part of the associate judge before appellate power may be exercised.[3]
[3]Oswal v Carson [2013] VSC 355; Applebee v Monash City Council [2013] VSC 481; Nom De Plume Nominees Pty Ltd v Wallace-Smith (in his capacity as liquidator of Ascot Vale Self-Storage Centre Pty Ltd [2014] VSC 75; (2014) 98 ACSR 243.
Should the appeal be allowed?
Mr Guneser’s Notice of Appeal set out his grounds of appeal, as extracted below, namely that the associate judge made the wrong decision because he —
·failed to assess respondent’s entitlement to costs
·failed to exercise powers under Rule 63.56.2
·failed to enforce and implement the law
·at the time of presiding over the legal proceeding at the Supreme Court hearing and the case failed to consider all evidence
·failed to make a verdict in a case based on the presented facts in the proper legal procedures and precedents
·fail to have regard to the complexity of the matter, the difficulty and novelty of the questions involved in the matter
·to have consideration of questions of law and fact breach by the respondent
·failed to give the general care and conduct of the legal practitioner (respondent), having regard to the instructions and all relevant circumstances;
·failed to take Part 7 — Allowances on taxation generally, namely
-63.70 unnecessary or careless work
-63.77 procuring evidence 406 (sic)
-63.85 Bill reduced by 15% 408 (sic)
·plaintiff failed to understand Associate Justices Woods questions in regards to law
·hence plaintiff did not have the right of defence and a fair and just hearing
·drew the wrong conclusions and they were not based on facts
·wrongly applied Administrative Law Act 1978
·wrongly applied Civil Procedure act 2010
·wrongly applied division one, 1A, 1B, and 1C of Part 1 of section pf the Evidence (Miscellaneous Provisions) Act 1958
·wrongly applied Supreme Court Act 1986, sections, 18, 22, 24, 32, 50 1A, 58, 59, 60, 76, 77, 78
These same grounds are set out in Mr Guneser’s written outline of submissions on the appeal.[4] It is not possible to discern from those generalised grounds what Mr Guneser claims was the error committed by the associate judge. Mr Guneser’s amplification of the grounds in his written outline is largely devoted to a repetition of previous allegations of Mr Bloggs’ complicity with ‘Turkish Islamic State terrorists’ and other equally baseless allegations. Given that Mr Guneser did not stay to explain how those grounds applied to the decision of the associate judge the court is placed in a difficult position to assess the merits of the appeal.
[4]‘Submission in reply to the outline of submissions by Andrew Blogg on 14 February 2020’ filed 14 February 2020 (‘written outline’).
Doing the best I can to discern Mr Guneser’s allegations of error, I reject the submission that the associate judge, generally, failed to implement or apply the law, or failed to consider the evidence or make a decision based on the evidence. It appears to me that the associate judge distilled Mr Guneser’s complaints, on the basis of the documents he filed, and addressed them by applying correct legal principles. I find no error in the way the associate judge applied the law or considered the evidence.
I also reject the submission that, in reviewing the costs registrar’s decision, the associate judge failed to make or apply allowances on the taxation for unnecessary or careless work. The associate judge considered, as had the Cost Registrar, the arguments Mr Guneser put concerning the firm’s conduct of the litigation in the County Court and its alleged failure to take steps which Mr Guneser wanted it to take. I find no error in the way in which the associate judge dealt with those contentions. They are appropriately addressed in his Honour’s reasons extracted in paragraph 17 above.
The central issues which Mr Guneser needed to grapple with were the validity of the fixed fee costs agreement and the assessed quantum of the firm’s costs on a ‘fair and reasonable’ basis. This he consistently failed to do, preferring to advance a range of complaints that were either irrelevant to the taxation or lacking in substance.
Conclusion
In summary, the appeal lacked substance. No legal, factual or discretionary error was identified and I could not discern any error from my own analysis of the decision in the light of the materials before the associate judge.
The appeal must be dismissed with costs. As to the appropriate order for costs, that must await my decision on the cross-appeal to the extent that it concerns the capacity of an incorporated legal practice to recover its professional costs when acting for itself in litigation, in the light of Bell Lawyers Pty Ltd v Pentlow & Anor[5] and United Petroleum Australia Pty Ltd v Herbert Smith Freehills.[6]
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[5][2019] HCA 29; (2019) 93 ALJR 1007.
[6][2020] VSCA 15.
CERTIFICATE
I certify that this and the 11 preceding pages are a true copy of the reasons for judgment of Justice Macaulay of the Supreme Court of Victoria delivered on 24 April 2020.
DATED this twenty fourth day of April 2020.
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