Karam v Lennon Mazzeo
[2017] VSC 756
•12 December 2017 (revised 14 December 2017 – paragraph [53])
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2010 00791
| AKRAM KARAM | Appellant |
| v | |
| LENNON MAZZEO | Respondent |
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JUDGE: | Ginnane J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 27 November 2017 |
DATE OF JUDGMENT: | 12 December 2017 (revised 14 December 2017 – paragraph [53]) |
CASE MAY BE CITED AS: | Karam v Lennon Mazzeo |
MEDIUM NEUTRAL CITATION: | [2017] VSC 756 |
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COSTS — Taxation of solicitor’s costs — Applicant not appearing — Application to set aside Associate Justice’s taxation order — Application refused — Appeal — Appellant not appearing on appeal — Consideration of grounds of appeal — Whether appellant notified of taxation hearing — Whether any point in requiring rehearing — No error in Associate Justice’s refusal to set aside taxation order — Supreme Court (General Civil Procedure) Rules 2015, Order 46.08, 49.02, and 77.06.9(2)(a).
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | No appearance | |
| For the Respondent | Mr T McCredie | Mazzeo Lawyers |
HIS HONOUR:
The respondent to this appeal, Lennon Mazzeo, formerly acted for the appellant, Mr Akram Karam, in two separate proceedings against his former employer that were heard together.[1] Mr Karam succeeded in one action, but not in the other. Following a dispute over costs, on 8 September 2010, Wood AsJ taxed Lennon Mazzeo’s costs in the sum of $106,123 to be paid by Mr Karam.
[1]Proceedings S CI 2009 09113 and SCI 2009 09926. Mr Karam was successful in proceeding S CI 2009 09926 in relation to asthma.
Mr Karam filed a notice of appeal dated 10 September 2015 against the decision of Wood AsJ dated 1 September 2015 dismissing Mr Karam’s summons dated 24 June 2015 to set aside the 2010 taxation order.
Mr Karam’s explanation for the very substantial delay in seeking to set aside the order of 8 September 2010 was that he only became aware of it on 25 May 2015. No point was taken before the Associate Justice about that delay.
As the appeal is from a decision of Wood AsJ sitting as a Costs Judge it is brought under s 17I of the Supreme Court Act 1986.
Mr Karam is subject to a litigation restraint order made by Justice J Forrest on 23 March 2016.[2] By decision of 15 September 2017, I determined that this appeal was not subject to that litigation restraint order (‘September ruling’).
[2]Karam v Palmone Shoes Pty Ltd (No 3) [2016] VSC 228.
Both parties asked me to conduct the appeal by oral hearing. On the hearing date of 30 October 2017, Mr Karam appeared and sought an adjournment because of a medical condition he was then suffering. I granted his application and adjourned his appeal to 27 November 2017.
On that adjourned date, Mr Karam did not appear when the appeal was called. After the Court contacted him, he informed the Court that he was not proposing to appear and in a subsequent phone call sought a further adjournment because he had attempted to lodge an appeal against the orders that I had made on 30 October 2017 refusing him leave to file a summons dated 18 October 2017. That summons sought to set aside orders that I had made on 5 October 2017 that the parties file any further affidavits and written submissions upon which they intended to rely by 4.00 pm on 24 October 2017. When I adjourned the proceeding on 30 October, I ordered that Mr Karam file and serve any further affidavits upon which he intended to rely by 4.00pm on 20 November 2017. Mr Karam’s position was that the appeal had to be determined on the materials and affidavits relied on at the original hearing on 28 August 2015 and that I should not have permitted the filing of any further affidavits. I did not accept that to be a ground for further adjourning the proceeding. Even if he had lodged an appeal or application for leave to appeal against the orders of 30 October 2017, a fact that was unclear, that would not have operated as a stay of the proceeding.
The Court had power to receive further evidence upon questions of fact by affidavit.[3]
[3]Supreme Court (General Civil Procedure) Rules, order 77.06.9(2)(a).
In his telephone conversations with the Court on 27 November 2017, Mr Karam was informed that the appeal would be heard on that day, and that the hearing was delayed until 12.15 pm to give him a further opportunity to attend, but he did not do so.
As Mr Karam was not present to press his appeal, one option might have been simply to dismiss it. However, I considered that taking into account that he was self-represented, that I should consider his grounds of appeal and the affidavits that were before the Associate Justice as well as the documents that Mr Karam had subsequently filed. These included his Notice of Appeal and his application and supporting affidavit seeking leave to continue his appeal, which he had filed on 17 February 2017, when he had understood the litigation restraint order made on 23 June 2016 applied to this appeal, a position which my September ruling concluded is not the case. I also received short further oral submissions from Lennon Mazzeo, who had also previously filed written submissions.
After hearing further submissions from Lennon Mazzeo, I decided not to admit the affidavit of Mr Witherow to which Mr Karam objected because I considered that it contained material that could have been filed at the hearing before Wood AsJ. Mr Witherow’s affidavit sought to establish that on 3 March 2010 Lennon Mazzeo wrote to Mr Karam notifying of the taxation hearing before Wood AsJ on 8 September 2010 and that he was obliged to file and serve objections within 60 days. That evidence would have been available for Lennon Mazzeo to seek to rely on when the application was heard by Wood AsJ on 28 August 2015, but it did not do so.[4]
[4]Clark v Stringel [2007] VSCA 292.
Mr Karam was legally represented at the hearing before Wood AsJ on 28 August 2015. His application was made under Supreme Court (General Civil Procedure) rule 46.06, although Wood AsJ pointed out that rule 49.02 might have been more applicable.
The decision by Wood AsJ concerning the application to set aside and rehear the taxation order of 8 September 2010
The first issue was whether Lennon Mazzeo had notified Mr Karam of the hearing on 8 September 2010. He had not attended the taxation callover in March when the taxation was fixed for 8 September. His Honour found that it was open to conclude on the affidavit evidence, which included an affidavit of service by Ms J Black of a letter of notification of the hearing date, that on the balance of probabilities, Mr Karam was aware of the hearing on 8 September 2010 and failed to appear. It was merely possible that the letter of 3 March 2010 was not received or received and not opened.[5] His Honour did not accept that there was any proper explanation for the non-appearance of Mr Karam at the hearing in 2010. He did not accept Mr Karam’s submission that the order of T Forrest J dated 23 February 2010 prevented the taxation of costs. That order stated that Lennon Mazzeo was ‘entitled to such costs as are agreed or allowed by the Taxing Master’.
[5]Karam v Palmone Shoes Pty Ltd (Unreported, Supreme Court of Victoria, Wood AsJ, 1 September 2015) [15] (‘Karam reasons’).
His Honour found that Mr Karam did not dispute being served with the summons for taxation or the bill of costs and was therefore aware of the sum claimed and the need to file a notice of objection and that he had the opportunity to attend the first callover on 3 March 2010.
His Honour also found that there was no real likelihood of injustice to Mr Karam if the taxation order was allowed to stand. This was because Mr Karam’s affidavit did not identify items in the bill that would merit revisiting in a further taxation. Mr Karam’s lawyer only questioned a few items in the bill. These concerned work:
connected to the Magistrates’ Court and County Court proceedings, attendances in respect of proceedings 8981/2009 and 8747/2009 and the fact that fees for senior and junior counsel appeared in the bill for appearing on 18 November 2009 when it was submitted they did not appear.
Counsel for Mr Karam also raised the fact that the bill was not certified in relation to the payment of counsel fees. However, his Honour stated that at the taxation on 8 September 2010, the Court was provided with written undertakings by Lennon Mazzeo and the consent of relevant counsel which satisfied rule 63.43(2)(b) and that he considered that there was no merit in that submission.
His Honour said that a number of reasons ‘militate against setting aside the order of [8] September 2010’. First, Mr Karam was aware of the scheduled hearing on 2 March 2010 and he was probably aware of the 8 September 2010 hearing date.
Secondly, if Mr Karam was in any doubt about the effect of the order of T Forrest J and whether they prevented the taxation of costs, he should have, once he was served with the summons, attended the callover to put his argument that the costs should not be quantified.
Thirdly, as the Court had concluded that Mr Karam probably received the letter of notification from Lennon Mazzeo, he knew that the order of 2 March 2010 required him to file and serve a notice of objection and set a final hearing date.
Fourthly, and perhaps most importantly, there was no injustice to Mr Karam in not setting aside the taxation order, because having regard to: the quantum recovered in the personal injuries proceedings; Lennon Mazzeo’s bill of costs; the scrutiny of that bill that has already occurred in the taxation; and the bill of Aloe & Co taxed by consent on 14 July 2015 in the sum of $143,392.47 in proceeding SCI 2014 4969 — it was obvious that there would be a shortfall from the funds then in Court to cover the legal costs owed to both his former solicitors.
Consideration of Mr Karam’s notice of appeal
The appeal from the Associate Justice’s order is by way of rehearing. In order to succeed on the appeal, the appellant must establish that the Associate Justice made a legal, factual or other discretionary error.[6] As the Associate Justice’s decision was the exercise of a discretion, the circumstances in which the Court can overturn it on appeal are limited.[7]
[6]See Glass v Chief Examiner [2015] VSC 29[2] and the authorities referred to and AJH Lawyers v Mathieson Nominees Pty Ltd [2015] VSC 37 (McDonald J).
[7]House v The King (1936) 55 CLR 499.
When a party has had notice of a proceeding but does not appear, the Court whether exercising a discretion conferred by Rule 46.08, which deals with setting aside an order or Rule 49.02, which deals with setting aside or varying a judgment or order obtained where a party is absent at the trial, will usually only set aside a judgment regularly obtained if the defendant shows a prima facie defence on the merits.[8]
[8]Kostokanellis v Allen [1974] VR 569 at 603; Rosing v Ben Shemesh [1960] VR 173. Mr Karam did not seek to utilize any right of review provided by Rules 63.56.1 or 63.57.
I will next consider Mr Karam’s grounds of appeal
Ground one
Mr Karam’s first ground challenged the Associate Justice’s finding that he was aware of the hearing of 8 September 2010. In its opening words the ground stated:
His Honour Associate [Justice] Wood was in error and unreasonable in concluding on page 4 in paragraph 15 that ‘the defendant was aware of the hearing on 8 September 2010 and failed to appear’ when:
On evidence I was not aware of the hearing on 8 September 2010 when I have not received a notice from the respondent about the hearing on 8 September 2010, and the respondent failed to provide a proper and certain evidence that he notified me about the hearing when:
The respondent failed to provide a sufficient evidence and only was untrue allegation made by an affidavit on 7 September 2010 that he sent me a letter to notify me about a hearing on 8 September 2010 when:
The respondent alleged that the letter been served to advice me about the hearing on 8 September 2015 and about the content of the order that been made on 2 March 2010 as a result of the hearing for taxation of Lennon mazzeo costs in which I did not attend for a reasonable reason, but the respondent on the other hand failed to provide me with a copy of the order that been made on 2 March 2010.
The respondent Lennon Mazzeo’s allegation by an affidavit made on 7 September 2010, was made intentionally for the purpose to mislead the Court at the hearing on 8 September 2010 to provide an evidence that they notified me about the hearing on 8 September 2010, when I have never received such letter from the respondent on or around 3 March 2015 or any other sort of notification about the hearing on 8 September 2010 from the respondent or the Court.
The appellant legal representative at the hearing on 28 August 2015, provided an evidence that the affidavit and the letter that the respondent alleged that he sent to me on or about 3 March 2010, was merely a draft when the respondent Lennon Mazzeo did not have the solicitor’s letterhead at the top or a signature like another letter exhibited to the affidavit that the respondent relied upon, and the affidavit did not specify the mode of forwarding, which was manifestly illegal letter and affidavit by the respondent.
This ground alleged that Lennon Mazzeo’s affidavit of service made on 7 September 2010 was intended to mislead the Court by providing evidence that they notified Mr Karam about the hearing of 8 September 2010, when they had not done so.
Lennon Mazzeo submitted that the Associate Justice’s findings that Mr Karam had been notified of the hearing date were open to him and that no basis for the fraud allegation had been established.
Additionally, Lennon Mazzeo submitted that this was an appeal and not a re-trial and that Mr Karam had not filed any evidence challenging the findings that the Associate Justice had made. His Honour was entitled to conclude that Mr Karam was aware of the hearing date. There was no evidence that the Court did not send the order to him. No allegation of fraud was established.
Consideration of ground one
I do not consider that the matters that Mr Karam raises in ground one establish any error in the Associate Justice’s finding that he was aware of the 8 September 2010 hearing.
There was an affidavit of service of 7 September 2010 by Jessica Black filed on behalf of Lennon Mazzeo stating that a letter of 3 March 2010 was forwarded to Mr Karam giving the date of the hearing as 8 September 2010 and stating that he must file and serve a notice of objection within 60 days.
There was no clear denial from Mr Karam that the letter had been received. Mr Karam’s affidavit of 8 August 2015 did not include any such assertion. Nor did he do so in his affidavit of 15 February 2017 in support of his application for leave to continue his appeal against Wood AsJ’s order.
His solicitor had filed an affidavit stating that he had instructions from Mr Karam that that he did not receive the letter advising him that the taxation had been listed for 8 September 2010 and that that was why he did not appear.[9] His Honour also concluded that even if Mr Karam was unaware of the hearing in September 2010 he took no steps to enquire from either the Costs Court or Lennon Mazzeo, what orders were made in his absence on 2 March 2010. He knew of that hearing and had the opportunity to ascertain if the Costs Court shared his view as to the status of any stay and therefore failed to protect his own interests.
[9]Affidavit of Patrick Donnellan sworn 10 August 2015 at [20].
Ground one has not been established.
Grounds two and three
Mr Karam’s second ground is that the Associate Justice was in error in stating that there was nothing in the affidavit filed by Mr Karam that addressed concerns in relation to the taxation that occurred on 8 September 2010. The notice of appeal now before the Court states that the material filed by Mr Karam for his 2015 application was directed at setting aside the taxation order and was not to list objections against the bill of costs of Lennon Mazzeo which was ‘to be done logically after setting aside the taxation order’. He states that if such an affidavit was required, the Associate Justice should have made directions for its filing.
Mr Karam’s notice of appeal then lists concerns about the taxed costs and disbursements. He describes the bill of costs as unreasonable and very excessive.
However, the hearing before Wood AsJ was to determine if there were reasons to set aside the taxation order. To obtain a setting aside order, Mr Karam had to persuade his Honour that it was an appropriate exercise of discretion to make that order and to order a second taxation. He had to persuade his Honour that there was some point in ordering a second taxation, more specifically, that on a second taxation that the bill of costs might be significantly reduced.
The principal basis for the Associate Justice’s decision was that there was no real likelihood of injustice to Mr Karam if the taxation was allowed to stand. As mentioned previously, in the hearing before Wood AsJ Mr Karam challenged only two minor items in the bill of costs.
An appeal against an Associate Justice’s order is generally not the occasion to raise factual arguments that were not raised before the Associate Justice.
Despite this, in his current notice of appeal, Mr Karam contended that the professional costs of Lennon Mazzeo in the sum of $50,487 were excessive and unreasonable and ought to be disallowed. Similarly with the charges of $27,000 for instruction and brief. He made a similar contention about the disbursements of $69,349.80, which included disbursements for counsel. But, Mr Karam filed no evidence to substantiate his contentions that the fees were excessive and unreasonable.
Ground three of the notice of appeal can be considered with ground two. It alleges that the Associate Justice erred by stating that ‘there is insufficient basis to set aside the order of taxation as no financial benefit would flow to the defendant on another taxation’. Mr Karam contended in his notice of appeal that the taxation of Aloe & Co costs was subject to review and that ‘the prospect of merit of the review to reduce the amount of the bill is bright’. He alleged that the other law firm who had acted for him, Clark Toop & Taylor, was subject to a complaint, and that ‘if he [is] entitled for costs’ then his costs were ‘to be paid by Aloe& Co and not from the fund in Court, as an undertaking had been made by Aloe & Co to pay Clark Toop & Taylor his costs of about $21,000’.
Lennon Mazzeo disputed these grounds and contended that Mr Karam had not established any error in the Associate Justice’s reasoning. He had not established that he would receive any financial benefit from a further taxation. The appeal was not the proper forum for the addition of new arguments about Lennon Mazzeo’s bill. Apart from assertions in the notice of appeal, there was no other evidentiary material supporting Mr Karam’s contentions.
The Associate Justice explained why he considered that Mr Karam would not receive any financial benefit from a further taxation. The combined costs of Aloe & Co and the plaintiff, Lennon Mazzeo, amounted to $249,515.47. In addition, Clark Toop & Taylor were also seeking costs of $58,992.47. The sum that had been held in Court was $232,265.27. Any further reduction of Lennon Mazzeo’s costs would not automatically flow to Mr Karam as Aloe & Co Pty Ltd had a lien to secure the sum of $17,250.02. So Wood AsJ was entitled to find that there would inevitably be a short fall that affected the likelihood of any further funds being available to Mr Karam.
Consideration of grounds two and three
Associate Justice Wood in his reasons referred to the statements by T Forrest J, the trial judge, that Lennon Mazzeo had acted conscientiously and in Mr Karam’s interests at all times.[10] Justice T Forrest also stated that there had been a significant application of time, effort and money on behalf of Mr Karam by Lennon Mazzeo. His Honour regarded their preparation for both cases as fundamental to Mr Karam’s successful judgment in the asthma case.[11]
[10][2010] VSC 82 [12].
[11]Ibid [14].
There was no error shown in this conclusion. There was no evidence as to Mr Karam’s prospects of challenging any of the three solicitors’ bills of costs.
Wood AsJ also appropriately took into account that if the taxation order was set aside, Lennon Mazzeo would be put to the expense of a second taxation with no prospect of recovery from Mr Karam and that he had not offered any security for their costs. His Honour also said that:
To utilise Court resources to go through that exercise is not justifiable having regard to the obligations imposed in the Civil Procedure Act 2010. This matter has occupied considerable time and both private and public resources over a number of years.[12]
[12]Karam Reasons [55].
His Honour in that regard referred to a table reproduced in Karam v Palmone Shoes Pty Ltd[13] which listed the many applications and proceedings that Mr Karam has commenced. In addition, as previously mentioned, he is now subject to a litigation restraint order.
[13][2014] VSCA 148.
Mr Karam had the opportunity before Wood AsJ to show that a case for challenging Lennon Mazzeo’s costs had merit, but he only challenged two minor items.
Grounds two and three are not established.
Ground four
Mr Karam’s final ground of appeal was that to allow the taxation order to stand would cause him substantial prejudice when:
(a) he was not aware of the hearing on 8 September 2010;
(b) his non-attendance at the hearing on 2 March 2010 was due to a reasonable cause;
(c) his non-attendance at the hearing on 8 September 2010, was due to the failure of Lennon Mazzeo to notify him about the hearing, and also due to the failure of the Registry of the Court to provide him with a copy of the order made in his absence pursuant to order 63.56.1;
(d) there would be a sufficient and reasonable basis to set aside the taxation order as some benefit will flow to him after finalising the taxation of the other parties when the negligence proceeding against the respondent Lennon Mazzeo which was issued on 4 April 2011 is determined;
(e) the Court failed to provide him with a copy of the taxation order of 8 September 2010 and he only received it on 25 May 2015 from Lennon Mazzeo;
(f) if he had received a copy of the order of 8 September 2010 after the hearing he would have ‘made a review’ pursuant to rule 63.56.1 as everyone is entitled to review the lawyer’s bill of costs charged for their work to see whether they have been charged reasonable and not excessive costs.
Lennon Mazzeo submitted that it would suffer substantial prejudice if a further taxation was required and that there was no evidence of substantial prejudice to Mr Karam. The Associate Justice was obliged not to set aside the order unless there was some purpose in doing so.
Consideration of ground four
This ground largely repeats earlier grounds. The Associate Justice conducted the rehearing application and considered all the matters put to him. Once he found that Mr Karam did have notice of the 8 September 2010 hearing, it was for Mr Karam to establish that there was some point in setting aside the taxation order. He did not do so and filed no evidence attempting to do so. I accept Lennon Mazzeo’s submission concerning the prejudice that it is likely to suffer if a further taxation is ordered.
The fourth ground is not established.
Conclusion
The documents that Mr Karam has filed do not establish any error in the Associate Justice’s exercise of discretion.[14] Accordingly his appeal is dismissed.
[14]House v The King (1936) 55 CLR 499.
Addendum of 14 December 2017
After delivering the above judgment at 2.15 pm on 12 December 2017, I received documents sent by mail to my Chambers from Mr Karam under cover of a letter dated 8 December 2017. The documents had not been filed at the Court registry. The documents were: an application that I disqualify myself from ‘conducting his matter’ with a supporting affidavit; an application for a stay; and an application for leave to appeal. The Court had sent Mr Karam notice in writing of the time that judgment was to be delivered, but he did not attend. As Mr Karam’s documents were not received until after I delivered judgment they played no part in my judgment and, save to say that if I had received them before judgment was delivered they would not have altered the orders that I made, I do not consider that I should say anything more about them.
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