Kuek v Devflan Pty Limited
[2012] VSC 327
•7 August 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2004 09228
| GABRIEL KUEK | Plaintiff |
| – and – | |
| DEVFLAN PTY LIMITED and LJOBOMIR NIKOLOVESKI | Defendants |
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JUDGE: | MUKHTAR AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 June 2012 | |
DATE OF JUDGMENT: | 7 August 2012 | |
CASE MAY BE CITED AS: | Kuek v Devflan Pty Limited and anor | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 327 | Revised 10 August 2012 |
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LEGAL PRACTITIONERS ― Overarching Obligations under Part 2.3 of the Civil Procedure Act ― Requirement to file and serve review application within 14 days ― Application not filed until 175 days and not served until 183 days after the order ― Whether Court registry at fault ― Lawyer’s responsibilities ― Deliberate failure to inform respondents of intended review ― Protracted delay ― Contravention of overarching obligations ― Review application set aside ― Civil Procedure Act (No 47 of 2010) s 17, 20, 21, and 25.
COSTS ― Taxation of costs ― Right to seek review of costs order from a Judge of the Court ― Non compliance with time limit for filing of review ― Whether non compliance attributable to inattention or inadvertence by Court registry ― Application for review set aside.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D Perkins | Access Law |
| For the Defendants | Mr R Heath | Brygel Lawyers |
HIS HONOUR:
A Judge of the Court can be asked to review an order in the Costs Court. Notice of such an application must be filed and served within 14 days of the order. In this case, such a notice was not filed until 175 days, and not served until 183 days, after the order. The respondent complains the notice is grossly out of time and ought be set aside, more so as the review lacks merit. The appellant says that the delay was not his fault; that it was the fault of the Supreme Court registry and he ought therefore be excused for the delay. It sounds uncomplicated. It is anything but.
I have come to the view in some truly exceptional circumstances that the delay is too great to be excused, and the appellant cannot say it was not his fault. There have been breaches of the overarching obligations under the Civil Procedure Act. I would refuse an extension of time, and set aside the notice of review.
The appellant Gabriel Kuek is a practising and experienced lawyer in the field of litigation. There is a costs order against him as litigant for his unsuccessful appeal to the Trial Division of this Court and subsequently in the Court of Appeal. The case and the attempts at taxation of the costs has a prolonged history. But, to expose immediately the present dispute, I isolate an order made on 29 September 2011 by Associate Justice Wood as Costs Judge. His Honour, with written reasons, made an order taxing the respondents’ costs at $38 730.20. That was an order made on a review of an earlier taxation as sought by Kuek (which I shall explain later). Kuek as paying party seeks to have that (reviewed) order reviewed again by a Judge of the Court under rule 63.57. But the rule requires a notice of application to review to be filed and served within 14 days of the order. The fourteenth day was 13 October 2011. Kuek faxed to the respondents’ solicitors the review application by way of service on 30 March 2012. The document shows it was filed, that is, issued by the Supreme Court registry on 22 March 2012.
Mr Perkins of counsel for Kuek seeks to prove that Kuek posted, for filing, the review application to the Court on 14 October 2011. That was, on despatch, 15 days after the order of 29 September 2011. He contends the Prothonotary’s office was to blame for the delay in not issuing the review application until 22 March 2012. He says it should be supposed the document was lost within the Court’s registry. He relies on a latin maxim actus curiæ neminum gracabit which means an act of the Court shall prejudice no man: see Broom’s Legal Maxims.[1] Mr Perkins says that a litigant has a right of review of a costs order, and there is a case for review because Wood AsJ has not understood properly or undertaken the special investigative task that was required on the taxation of costs in this case. As I will show, that taxation occurred on a remittal from the Court of Appeal after Kuek had succeeded in showing that the taxation had previously miscarried on two occasions. The controversy all concerned the indemnity principle which says, in essence, that a paying party should not be liable for costs for any more than the other party is liable to pay its own lawyers. His case, on taxation, was to investigate whether there was a special arrangement between the respondent and their lawyers to act for reduced fees and whether the respondent as client truly was liable to his lawyers for the amount invoiced.
[1]Tenth edition (1939) at pp 73-5 as referred to by Ormiston J in Hartley Poynton v Ali [2005] VSCA 53.
A lot of ink has been spilt in this case. It has been made difficult because there are some very strange facts concerning the filing of the review application and unavoidably requires the Court having to digest the origins of this case and its winding path. It is necessary to start with reference to some procedural matters.
The review procedure
Under the Court’s rules of procedure for the taxation (assessment) of costs there are three relevant steps –
(a)The Costs Judge (I shall use that designation even though this case involved authority exercised by the previous office known as the Taxing Master) taxes the bill of costs and states the result in the form of an order: see r 63.56(1).
(b)Within 14 days after the making of the order, an interested party who objects to that order can ask the same Costs Judge to reconsider (previously called a “review”) that order on grounds that must be specified.
(c)The Costs Judge on review can confirm, set aside or vary the taxation order and must give written reasons if asked to do so.
It does not stop there. An interested party can ask a Judge of the Court to review the Cost Judge’s reviewed order where written reasons have been given. Rule 63.57(5) says that within 14 days after the making of the Costs Judge’s order or the giving of reasons, whichever is the later, three steps have to be taken for a party seeking a review from a Judge of the Court –
(a)a notice of the application for review has to be filed;
(b)a copy of the notice of application has to be lodged with the Costs Court; and
(c)a copy of the notice has to be served on each party interested.
The rules do not say it is a review de novo (to start all over again). Because a taxation usually involves the exercise of discretion in what is taxed off, it is regarded as involving the appellate principle that a factual, legal or discretionary error must be shown.[2]
[2]See Australian Coal and Shale Employees Federation v The Commonwealth (1953) 94 CLR 621, applied in Kuek v Devflan [2009]VSC 91.
The origins of the costs order against Kuek
The case has its modest origins as a claim brought by Kuek in the Magistrates’ Court in September 2003 against the respondents as car repairers for alleged defective works. The claim was for $3856. It was dismissed with costs. This is the saga that followed –
(a)Kuek appealed the Magistrates’ Court order, which can only be on a question of law. In May 2005 that appeal was dismissed by this Court (Balmford J) with an order for indemnity costs against Kuek.
(b)Kuek appealed to the Court of Appeal. His appeal was dismissed. But the Court set aside the indemnity costs order, and replaced it with an order for party/party costs. The respondents obtained a costs order on the appeal. That was in August 2006.
(c)On 10 October 2007 the respondents obtained from Taxing Master Wood on taxation an order for costs of $39 105. Kuek sought a review (or reconsideration as it is now called under rule 63.56) of that order from the Taxing Master. That was by notice dated 24 October 2007. On review, it was reduced by $375 for Goods and Services Tax. That was in February 2008. Later, Kuek was ordered to pay 90% of the repairer’s costs of the taxation. That was on 29 October 2008.
(d)Kuek sought a review by a Judge of the Court. It is significant to see that, presumably conscious of the 14 day time limit, he filed a notice of review on 12 November 2008. In March 2009 Beach J confirmed the taxation order. What had emerged by this stage was the contention by Kuek that there was a breach of the indemnity principle. Kuek said that if the respondents were not liable to their own lawyers for an amount at least equal to the amount of the party/party bill as taxed, then the bill should be further taxed so as to reduce it to an amount for which the respondents were in fact liable to their lawyers. Kuek was looking to investigate whether the terms of the retainer between the repairer and his lawyers would disclose that the repairer was liable to his solicitor, by some special arrangements, for a smaller amount than the party/party bill.
(e)Beach J examined the retainer letters, the party/party bill and the signed costs agreement. His Honour concluded that the total of the party/party costs as allowed by the Taxing Master was not greater than the amount in which the respondents were liable to their lawyers, so there was no breach of the indemnity principle. Kuek’s application for review was dismissed with costs.
(f)Kuek appealed. He persevered with the case that his liability for party/party costs should be limited if there were special arrangements with the repairer’s lawyers to act for a reduced fee or on some other non-commercial basis. He said he was denied procedural fairness by the Taxing Master who had refused to order the production of documents to investigate whether there were special arrangements or to investigate the actual liability as distinct from the asserted or invoiced liability. For that reason he contended the taxation had miscarried and Beach J had erred in not remitting the matter back to the Taxing Master to redo the taxation on a full disclosure of documents.
(g)On 10 February 2011 the Court of Appeal allowed Kuek’s appeal. It held that Beach J had erred because his Honour had purported to re-exercise the Taxing Master’s discretion on review “but he did so without ascertaining, and in ignorance of, the amount of the respondent’s liability to their lawyers. On the contrary he made a number of speculative findings”. This was described by the Court as a fundamental error. I mention that only to portray that whatever might be said, or thought, about the tenacity in this case, Kuek did succeed in showing that the taxation process at two stages had miscarried on a point of principle concerning a client’s liability to his lawyers in the present context.
The Court of Appeal said it was in no position to determine whether the respondents had breached the indemnity principle. It remitted the review back to the Costs Judge. Thus, the upshot was a return to the review (by notice dated 24 October 2007) done by the Costs Judge in February 2008. The judgment of Hansen JA said that “Of course, the parties will not be limited to the present evidence, and there is to be borne in mind the broad powers of the Costs Judge to require the production of such documents as are necessary to do justice between the parties on the taxation”.[3] The Court affirmed the relevant legal principle as being that the respondents had no entitlement to recover party/party costs in excess of his liability to his lawyers. In an important passage which comes to inform subsequent proceedings, his Honour said this (with my emphasis)
This type of issue [i.e. the indemnity issue] will not often arise because, in the ordinary case, party/party costs fall well short of the receiving party’s actual liability to its lawyers. But, as I have noted, here the material is sufficient to suggest that the position may be otherwise. It follows that the Taxing Officer must be satisfied that as a question of fact, the party/party costs do not exceed the respondent’s liability to their lawyers. Both the Taxing Master and the judge [Beach J] seem to assume that the consequence of such a factual exercise would be the (inconvenient) step of requiring the respondents to produce a solicitor/client bill, and that there was nothing in the authorities to require a solicitor/client bill. However, it does not follow that the factual question posed can only be determined by reference to a solicitor/client bill. It may be readily apparent on the face of the lawyers’ accounts that the receiving party has actually paid its lawyers more than the amount of the party/party bill. It is unnecessary to say anything further about the different ways in which a taxing officer may achieve satisfaction as to such a question of fact. That will no doubt be explored by the parties on the rehearing.[4]
[3]At [69].
[4]At [70].
What happened on the remittal?
The remittal
A directions hearing occurred on 11 March 2011 before Wood AsJ. Kuek requested orders for the production of documents that fell into 11 categories. Orders were made on nine of those categories. The respondent complied with the order for production of documents. A request by Kuek for a solicitor/client bill of costs to be drawn was refused by Wood AsJ because it was ruled to be, in effect, a request for the respondents’ solicitors to create a document that did not exist. Further, Wood AsJ took the view that the Court of Appeal had, in the passage I have quoted above, said that the exercise of considering whether there was a breach of the indemnity principle could be undertaken without the creation of such a document.
There are four paragraphs from the written decision of Wood AsJ given on the remitted review on 29 August 2011 which ought to be isolated. Paragraph 19 said:
A second round of requests was conveyed by the appellant … for documents establishing legal and clerical attendances claimed in the invoices (this exercise had already been undertaken at the initial taxation on 10 October 2007), trust and office Bank Statements, and Trust Account Statements, and cheques received and drawn. In addition, a request by the appellant for inspection of files was made and a request for an electronic copy of files for metadata examination. In the event that the requests were not complied with, the letter states “we will apply to the court for this matter to be listed for mention and to seek orders for further discovery and inspection of your files”. The requests were declined by the respondents’ solicitor of 20 May 2011 and the appellant did not pursue the matters further.
Thus, it appears that Kuek did not seek documents in order to go behind the tax invoices rendered by the respondents’ solicitors. Paragraph 20 said:
The documents produced on behalf of the respondents included bills of costs and invoices rendered during the relevant period totalling $54,264.20 and documents which they say established that the sum of $47,514.20 had been paid in reference to them. This latter amount [is] said to be below the assessed liability of the appellant on the party/party taxation, namely $38,730.20.
His Honour found there was no breach of the indemnity principle, saying:
37.The respondents produced 15 tax invoices dated between 12 August 2005 and 23 August 2007 establishing billing of $54,264.20 in respect of Brygel Lawyers, counsel’s fees, a costs consultant and Court fees. The trust account records disclose payments of $47,514.20 applied between 24 August 2005 and 1 July 2008 in respect of these invoices. The difference between the two amounts is explained by reduced fees payable to counsel at figures below those contained in their fee slips having regard to the special arrangements in place …
38.These documents fall within the description of the category of documents which the Court of Appeal identified as having the capacity to resolve the question … Accordingly, the respondents’ liability for costs to their own solicitors arising from the proceedings during the relevant period exceeds the taxation sum quantified against the appellant and payable by the appellant. There is no breach of the indemnity principle.
Thus as I follow the course taken, his Honour determined that the rendering of a tax invoice demonstrated, or was evidence, that the client was “liable” for the amount in the invoice, as was evidence of payment on the invoice by one means or another. Accordingly, his Honour decided there was nothing to justify reaching a different conclusion than had been reached by him in his review on 8 February 2008. His Honour confirmed his previous taxation order and therefore on the remitted review it was ordered that the taxation figure of $39 105.20 be reduced by $375 for GST to give the same figure of $38 730.20.
Pause there. The outcome after 3 years and 8 months since the first review by the Taxing Master was the making of exactly the same order as had been made on that review. The matter had come full circle, and this was about 8 years after the Magistrates Court proceeding and two trips to the Court of Appeal.
Then, on 29 September 2011, his Honour made a costs ruling requiring Kuek to pay the costs of the review, assessed on an indemnity basis after 4 April 2011. That exceptional order was made because an offer of compromise had been made by the respondents which his Honour decided was unreasonably refused. That offer had been made after the respondents had complied with all of the orders for production of documents which, so the Costs Judge held, should have made it immediately apparent that there was no longer any basis to maintain the indemnity argument.
There are limits to me looking into the conduct of the review by Wood AsJ. But one thing is clear enough judging by Kuek’s written submissions on the remittal. The solicitors’ tax invoices on which the Costs Court acted were in the form of lump sum bills. Kuek was contending that the Court should not without more accept that the solicitors’ tax invoices represent the clients’ actual legal liability for the purposes of the indemnity principle. Kuek was looking on the remittal to have the invoices verified or justified, but he complained, the solicitors would not produce materials to that end. Of course, that is not to say the invoices were bogus. It is to say, as I understand this mission, that liability for the indemnity principle means true or actual liability, and that liability is not established merely by the production and payment of an invoice, at least not in the context of a taxation of costs where a third party (Kuek) as paying party has an interest at stake.
I am not sure, but I understand the present desire to review is based on the contention principally that Wood AsJ has erroneously done no more than assume that a rendered invoice established liability, and erroneously interpreted the Court of Appeal as having said so. It is sufficient to say here that a course of documentary discovery was ordered by Wood AsJ and adhered to by the respondents. It appears that no real endeavour was made by Kuek to go behind the invoices at the taxation but rather to expect the respondents’ solicitors to justify the invoices or to expect the Court to look into that question.
With that history, I now come to the body of facts concerning time limits for a review.
The filing of the review application
Kuek swears that on 3 October 2011 his office received by post a sealed copy of the orders made by Wood AsJ and the written statement of reasons on the costs of the review dated 29 September 2011. Yet I received into evidence an e-mail sent to both parties from the His Honour’s Associate dated 29 September 2011 which attached a copy of the reasons on the costs of the review and the general form of order made “this day”, that is, 29 September 2011. So that fact is clear. Kuek was required to file and serve a notice to review within 14 days of the making of the order or the giving of reasons. One would think given the history of this case, including an earlier review to Beach J that Kuek as lawyer would have been acutely conscious of the 14 day time limit which was running from 29 September 2011. That would be especially so, as this was his personal case.
The fourteenth day expired on 13 October 2011. Kuek has sworn an affidavit saying that on 14 October 2011 “my office” posted to the Prothonotary a letter dated 14 October which said: “We enclose three copies of Notice of Application to Review Order of Cost Judge for filing. We would be obliged if two sealed copies can be returned to us in due course.” The notice he exhibits is dated 13 October on the front but is dated 14 October at the end.
Every lawyer has ingrained in the professional psyche the importance of time limits in the Law, especially for significant steps such as an appeal or review. One would think that given the history of the case and the expiration of the time limit Kuek would have ― in this his personal case ― taken the step of arranging a personal attendance for the filing and sealing of the notice at the Registry, so that a sealed copy could be obtained immediately for service on the Costs Court and on the respondents. It was hardly a burden. That is what he should have done especially as he was out of time already.
Ordinarily if non compliance with procedural time limits was inconsequential, Courts tend to allow an extension of a few days absent any real prejudice. But I now must refer to what happened afterwards. This arouses real restlessness about Kuek’s conduct or inaction. The events were:
(a)Having said he posted three copies of the review notice on 14 October 2011, Kuek did not make further enquiries of the Prothonotary’s office soon after that to ask about action on the filing. It should have been of real concern to him given the time limits. He had not told the respondents that he intended filing a review notice. He did not tell the respondents that a review application had been posted or lodged for issuing. Nor did he serve an unissued version to verify that. He does not explain any of that.
(b)On 22 December 2011 (84 days after the order on the remitted review), the respondents served on Kuek an unissued bill of costs for the costs of that remitted review before Wood AsJ. There was no stay on the costs order. Up until this time, Kuek said absolutely nothing to the respondents’ solicitors about having posted a notice of review. One would think that the respondent’s step of serving a bill of costs would have impelled Kuek to speak up and find out what was happening with the issuing of his review application, and reveal to the respondent’s solicitors of the situation. Kuek stayed silent. He does not explain his silence.
(c)On 31 January 2012 (now 124 days after the relevant order) the respondents issued a summons for taxation on the costs of the remitted review for $20 565. Kuek said absolutely nothing to the respondents about having posted a notice of review. There is no evidence he had even pursued enquiries with the Prothonotary’s office to see what had happened to the notices that had been posted.
(d)It was not until 14 February 2012 (that is, 123 days after he said he posted the notice) that Kuek swears he made enquiries to the Prothonotary about his review application. His letter to the Prothonotary said: “On 14 October 2011, we forwarded copies of an Application to Review Order of Cost Judge for filing. However we have not received any response from the Court or notification of the hearing date. We would be obliged if you could let us know whether the application has been issued.” He was asking then what he should have asked soon after 14 October 2011.
(e)Kuek gives no explanation why he waited until 14 February 2012 to make this enquiry. Objectively, it appears the issuing of the respondents’ summons has activated him. But, as I wish to emphasise he gives no explanation why he chose to remain completely silent about the matter whilst the respondent was pursuing costs on the taxation and taking steps which called for him to speak up.
(f)Even more tellingly, on 9 March 2012 Kuek filed a notice of objections on the respondents’ summons for taxation. Thus he was disputing the respondents’ costs of the taxation, yet did not say anything to the respondent about the notice of review about the taxation itself, which by this stage according to him was sent about five months earlier.
(g)He says he had a conversation with the Prothonotary on 16 March 2012. According to Kuek, the Prothonotary said: he did not know the details of the case and would need to make enquiries; it was unlikely that documents received by the Registry in October 2011 would still be held; and a return date for such a review would normally be arranged by the Practice Court Co-Ordinator. He asked Kuek to send another copy of the documents for his examination, which Kuek’s assistant did by e-mail that day.
(h)As filing cannot take place by e-mail, on 20 March 2012 Kuek sent another three copies of the application for review to a Deputy Prothonotary. That is the document which then came to be sealed as having been filed on 22 March 2012. Kuek says he received those documents from the Registry on 27 March 2012 and then faxed them to the respondents under cover of a letter dated 30 March 2012. By the same covering letter, Kuek then sought a stay of the taxation. He did not say anything to explain the delay. That is, did not say anything about the matter being the Court’s fault as he now says.
(h) On 16 April 2012 a costs registrar conducted the taxation and made an order for $17 602.50. Kuek has not paid those costs.
(i)On 27 April 2012, the respondents filed a summons seeking to have the review notice struck out. Kuek’s affidavit stating his explanation for the delay was sworn on 15 May 2012.
On the facts then, this application to review is over five months out of time. And as I have shown, Kuek did absolutely nothing to enquire about the progress of the filing until 14 February 2012. He then remained completely silent about his intentions until the day he served the document on 30 March 2012. In the meantime the respondent went about taking steps to tax the costs of the taxation, being led to assume that there was to be no challenge to the order on the taxation for taxation. As he gives no explanation for his conduct, I can only conclude that his silence was deliberate; that is, he regarded himself as entitled to say nothing to the respondents.
The respondent’s arguments, initially at least, seemed to concentrate not on Kuek’s inaction as I have described it, but on a contention that the review had no real prospect of success and ought therefore be dismissed summarily. There are various grounds of review (which I shall not re-articulate) because what dominates the review application is a challenge to the adjudication on the indemnity principle. The respondents say that following the guidance of the Court of Appeal, Wood AsJ undertook the factual exercise of determining whether the respondents paid their lawyers more than the amount of the party/party bill.It was submitted that his Honour having looked at the invoices, and having then seen evidence of the amounts paid, could not be faulted in the conclusion that there was no breach of the indemnity principle; that the respondents were not obliged to prove that the payments sought in the invoices were truly owing; and that the attrition and stress and delay in this case had gone on long enough and should be brought to an end, especially in the light of the law’s recognition in Aon[5] of the injustice that delay causes when it inflicts strain upon parties.
[5]Aon Risk Services Aust v ANU (2009) 239 CLR 175.
If there was no question about the filing and service of the review application being woefully out of time, in the ordinary case I would not regard a costs review application as being something to attract summary dismissal, unless it could be shown to be vexatious or incompetent in some way. Ordinarily, an affected party to a taxation order has a right to a review whether the case be good or bad. In the context of appeal, a party who has appealed within time is entitled to have its appeal heard on the merits: see Jackamarra v Krakouer.[6] For my part, I would be disinclined as an Associate Judge to say that a review from decision of another Associate Judge (as Costs Judge) is bound to fail or has no reasonable prospects of success especially in an esoteric or specialised area such as the law of costs. I would say in the ordinary case a review should be allowed to go on and challenges to the merits can be made at the hearing of the review which would take place before a Judge of the Court in the Practice Court or elsewhere without too much delay. It is not the same situation as actuates a party to act in an early stage of a civil proceeding to bring an early end to a bad case to save expense and delay.
[6](1998) 195 CLR 516 at [543] (Kirby J).
The point that Kuek wants to take on review is that Wood AsJ was required at the instance of Kuek to adjudicate as a factual question the actual liability of the respondents. In one sense they were liable on the invoices; the question is whether the respondents should be entitled to show that the invoices for which payment was made claimed more than the client was truly obliged to pay. In the Court of Appeal, the judgment of Hansen JA did not (because it did not have to) deal with the question whether a paying party can try to go behind the tax invoices for the purposes of the indemnity principle.[7] His Honour said “the taxing officer must be satisfied that, as a question of fact, the party/party costs do not exceed the respondent’s liability to their lawyers”.[8] And for that question Hansen JA said “It is unnecessary to say anything further about the different ways in which a taxing officer may achieve satisfaction as to such a question of fact. That will no doubt be explored by the parties on the hearing”.[9]
[7]See especially [2011] VSCA 25 at [69] and [70].
[8]At [70].
[9]At [70].
I cannot be sure if Kuek was deprived of the documents or the opportunity to explore the tax invoices, or, if Wood AsJ took the view that such an investigation was not warranted under the indemnity principle because all that mattered was what the lawyers had charged under the invoices and what the client had paid. But looking at paragraph 19 of his Honours reasons, it seems that Kuek had sought discovery and inspection of solicitor’s files as part of the disclosure process but did not pursue that at the taxation. If that is so, it is difficult to see how the finding on the indemnity principle can be disturbed, for it is not being contended by Kuek that the onus fell on the respondents to justify “true” liability under the invoices. Otherwise, on the face of it, it seems to me Wood AsJ has proceeded with fidelity to the statements of the approach as stated by the Court of Appeal.
To my mind, the Court should start with the question whether Kuek should be excused and allowed to proceed with his review out of time. As well as having to give an explanation for the delay, the Court looks to whether any prejudice or detriment has been suffered actually by the respondents in the delay. Aon[10] considerations may come into play. A Court may also form the view amidst those factors that there would be no injustice in refusing an extension of time if the appeal is futile anyway: see Jackamarra v Krakouer.[11]
[10]Aon Risk Services Aust v ANU (2009) 239 CLR 175.
[11](1998) 195 CLR 516.
Mr Perkin’s first submission was that the review application was “filed” when it would have been received by the Prothonotary’s office in the ordinary course of post, that is, 1 or 2 days after 14 October 2011 and that Kuek ought be excused for a few days non compliance. I reject that submission. A document is filed not on presumed receipt or deposit. Indeed, there may be situations where the Registry may not allow a lodged document to be filed because of incorrect form or content. A document which seeks to instigate Court process is filed when it is sealed or otherwise issued. It then becomes a public document, which is to be served on the affected party.
Mr Perkins’ second submission was to say squarely the Registry was to blame, and entirely to blame, for the late filing on 22 March 2012. If the review notice was posted as Kuek says, then it is to be presumed in the performance of a public duty the registry staff of this Court would process it in the ordinary course, depending on the burden of business, and fix a return date. It is possible, I suppose for the document to have gone astray, but all that does is intensify the question why Kuek did nothing to enquire about process within a short time after posting the papers. He was under an already expired time limit and it was his responsibility to make sure the papers had arrived, especially with the history of the case, including past reviews. He is completely silent on all of this in his affidavit in this application.
Mr Perkins submits there is no “relevant” delay. He submitted it is the Court’s obligation, by its staff, to act with due despatch and Kuek was entitled to expect it to be properly processed without having to make any enquiries. Mr Perkins puts his argument in the affirmative to say this: Kuek did not have to do anything after he posted; there was nothing wrong for him to simply await the Prothonotary to act in the ordinary course and file the document; he could not “micro manage” the Prothonotary or presume to press him into action no more, he said, than a litigant could press a Judge to hurry up with a reserved judgment. I understood Mr Perkins to be saying that such a passive involvement also meant that Kuek was justified in not saying a word to the respondent until after 5 months, and for saying a lawyer’s manifold obligations under the Civil Procedure Act was irrelevant. His case was that Kuek had put the papers in the Prothonotary’s hands and was entitled to await the process. He did not have to do or say anything before then. In the meantime, he said, there was nothing stopping the respondent from proceeding to have the order for costs taxed, which they did. This all culminated in the submission that “An act of the Court shall prejudice no man.”
I think the first question is whether the Court can be satisfied that the review notice was sent as Kuek’s office by post on 14 October 2011. On this, the Court has been put in a most difficult position. The only evidence is an exiguous but sworn statement by Kuek that his office posted the notice. He was not cross examined on his affidavit, even though I was willing to allow it. Perhaps it was thought the objective facts, the expected conduct in the circumstances, and the absence of evidence about the actual handling of outgoing postage in his office would, by omission, be enough for the Court to not be satisfied that the papers were posted as he said. For the respondent, or (exceptionally) the Court to call evidence from the Prothonotary might not have advanced things. Presumably the Prothonotary could only repeat what he told Kuek on the phone. At best the evidence might have been that he, the Prothonotary, would have no personal knowledge about this matter, but could give evidence about the usual way in which sealable documents are processed and filed when they are received by post. Any Court officer or administrator would concede honourably the possibility that “things can go astray” but, it might be said that is why lawyers who have the honour of practising in this Court and the responsibility for taking steps in litigation might be expected to diligently chase the matter up so that things do not go astray, or be quickly discovered if they do.
When it comes to being satisfied about proof of a fact on the balance of probabilities the Court must take into account the nature of what it is sought to prove and its significance. In the situation that Kuek has obtained, I would have expected much better evidence about the posting of the materials on 14 October 2011. Who prepared the notice and when? Who signed it and when? Who did he instruct to send it? How is outgoing post usually administered in his office? Who posted it? And how? Is there a record? Why did he not personally file? In a case such as this, that sort of evidence might have enabled a Court to positively conclude that the documents were probably or presumably somehow lost or misplaced by the registry.
Like any evidentiary question, the Court looks to circumstantial facts when it comes to assessing the balance of probabilities. If Kuek had sent the notice as he asserts, then in the circumstances here I would have expected from a lawyer evidence consistent with such action, such as prompt enquiries about the filing soon after they were posted. Unless he explains his inaction and silence, then his failure to do anything until February and March 2012 is inconsistent with him having sent the notice as he says. If he had sent it, then in the circumstances he would have chased it up, especially as: this was his personal case; he like any lawyer was required to take a step by filing and serving a document in 14 days and ensuring that everything was in order; and the step in this case was not a perfunctory one, as it was to institute a review process after so many years of wrangling.
I cannot be satisfied on the evidence that the papers were posted on 14 October 2011. It is too easy and unlikely to conclude the papers were lost in the post. Nor is it fair to assume the registry lost or misplaced the papers if I have nothing more than an assertion that they were (not personally) posted without any ― and I mean any ― supporting evidence. That should not be viewed as the Court saying Kuek is not to be believed or has not been completely truthful on oath. It is to say no more than he has not, on a subject matter that requires it and could have rather easily been satisfied, proved the fact that the papers were posted as said.
But even if I were to come to a different view about his evidence, and suppose that Kuek posted the review papers as he says, the question is whether he can nevertheless say the long delay was not his fault.
A party may seek to be excused from compliance with a time limit by showing that there would be unjust prejudice to him if the delay unavoidably arose without fault on his part: see Hartley Poynton.[12] The pertinent words are without fault on his part. Has Kuek not facilitated the long delay? That brings into prominence his failure to pursue the matter, and to do nothing and say nothing to the respondent. The delay could have been minimised had he, as the party carrying the burden of procedural compliance made reasonable enquiries in soon after the asserted postage in October or taken positive steps to draw the urgency of the matter to the Registry. To say that he was entitled to leave it all up to the Registry and do nothing is I think cavalier and irresponsible. To go on and say he was by the same token entitled to stay silent with the respondent is, I think, in the circumstances unfair and unconscientious. I equate what happened with an appeal. Suppose the time for an appeal passes; the successful litigant is relieved believing there is no appeal because nothing is served or said; and then takes step to tax costs. I cannot accept the other party is entitled to say nothing for over 5 months.
[12]At [69].
I doubt if estoppel type considerations come into play at a doctrinal level, as they did albeit in a different procedural context in the well known case of Verwayen.[13]There was no representation here that Kuek would abstain from asserting a right. But it could be said that that the respondent has been induced by the long passage of time into thinking that no review would be taken. Mr Perkins submits there was no detriment or prejudice in the delay because the respondents were not impeded in the taxation of their costs of the taxation and could proceed even if there was a review filed in time. But I think that pays insufficient regard, especially with the history of this case, to a recognition that non compensable inconvenience and stress on individuals are significant elements of modern litigation: see Aon.[14] And it ignores the Civil Procedure Act.
[13](1990) 170 CLR 394.
[14]At [100] and [101].
In the end it comes down to saying the delay here was avoidable by Kuek, but he abstained from doing and saying anything until February 2012 and saying anything to the respondent until 30 March 2012. He cannot say there was no fault on his part. His fault was operative, and the consequential delay has to be seen in the context of the long and sorry history of the case. This brings into play the Civil Procedure Act.
Kuek is seeking to be excused for non-compliance with the 14 day time limit. The relevant dates are 22 March 2012 when the review application was eventually filed and 30 March when they were served. Where there is a failure to comply with the Rules, the Court may set aside the step taken in the proceeding or excuse the non‑compliance.[15] Either way, the Court is exercising a power “in relation to a civil proceeding” for which s 28 of the Civil Procedure Act permits the Court to take into account any contravention of the overarching obligations under the Act. In this case the distinct question is whether Kuek’s silence over the time period I have described was a contravention of any overarching obligation.
[15]See rule 2.01.
The commencement point is s 7 of the Act which states that the overarching purpose of the Act and the Rules of Court in relation to civil proceedings “is to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute.” That language tends to be attuned to the process from commencement to trial but there is no reason why it should not also apply to post judgment steps such as taxation. Indeed, under s 16 of the Act, Kuek “has a paramount duty to the Court to further the administration of justice in relation to any civil proceeding in which that person is involved … “.
To my mind, there are a number of obligations that could be identified as having possible application –
(a)the duty to “act honestly” at all times in relation to a civil proceeding – s 17;
(b)the duty to “cooperate with the parties to a civil proceeding and the Court in connection with the conduct of that proceeding … “ – s 20;
(c)the obligation to not engage in conduct which is likely to mislead or deceive – s 21; and
(d)the obligation to use reasonable endeavours in connection with the civil proceeding to act promptly and minimise delay – s 25.
It would not be right to denigrate what has occurred here by calling it dishonest. I have used the word “unconscientious” to better describe what happened. By that I mean, even outside the obligations under the Civil Procedure Act it was wrong and unfair in the circumstances and history of this case for Kuek as a legal practitioner to have stayed completely silent about his actions for as long as he did. His actions affect the affairs of the respondents and the conduct of litigation and orderly legal process in this Court. And even now, he seeks to blame the Court’s registry and not explain his own conduct. Yet, had he done that which would have been reasonably expected of him and simply pursued an enquiry soon after 14 October, the matter could have been looked into and undue delay avoided. I think if the Civil Procedure Act is to have any meaning, reformist efficacy, and practical influence on lawyers and litigants and the conduct of litigation, then judges ought apply it when circumstances call for it.
In this case, I think at the very least the statutory duty to act cooperatively (that is, to work together, to the attainment of the same end) and the duty to act promptly to minimise delay under s 25 are both attracted. I have considered whether Kuek’s decision to deliberately remain silent about the review in the face of steps being taken by the respondents to tax their costs was likely to mislead and deceive. He allowed the respondents to go about on the assumption that he would not be appealing. He filed objections to the bill on the taxation yet, according to him, had sent review papers to the Court months earlier. Was there a duty to speak up? Analogically, silence is a difficult area in the field of misleading and deceptive conduct under trade practices laws. The problem here is that unlike commercial cases, it cannot readily be seen that the silence led the respondents to do something that they might not otherwise have done, although they might have taken a different course with the costs of the taxation. I think it is enough to say the obligations under s 20 and 25 have been breached.
Even so, Mr Perkins expostulates that the respondents have suffered no prejudice. But I do no think that somehow relieves the observance of overarching obligations. Where the delay is serious enough and accompanied by other disquieting circumstances to show that civil procedure is being disrespected, there comes a point where delay of itself is prejudicial. To my mind they are the sort of considerations that inform the modern thinking in Aon. Before then, in Jackamarra v Karakouer,[16] reference was made to how delay itself can be unjust and “how it exhausts finances, patience, courage, hope”.[17] I have exposed enough about the history of this case to make the point that it called for no more delay.
[16](1998) 195 CLR 516 at 542-3 (per Kirby J).
[17]At 542, quoting Charles Dickens.
Thus, I will not accept the argument that the delay was the fault of the Court. Even if I suppose the review papers were posted on 14 October 2011, I conclude that the great delay in this case would have been prevented had Kuek as a reasonable legal practitioner and faithful to his obligations under the Civil Procedure Act taken steps soon after then to ensure that the papers had been received by the Court and were going to be issued, as I think he was responsibly bound to do. As a concomitant, I think he was bound for the same reasons to notify the respondents about the intended review. His unexplained failure in the face of adversarial steps taken against him was, I think, inexcusable. That judgment of the facts and circumstances cannot be seen in isolation from the long and protracted history of this case which I think intensified the need for Kuek to be more mindful of his obligations. It is the long and drawn out history of this case and the multiple appeals all stemming from a rather small case in the Magistrates’ Court justifies I think in this exceptional case that the long delay in the filing of these review papers was of itself prejudicial.
The Court is conscious that in so holding, there is being taken away from Kuek a right of review of the taxation order. Where an appeal is instituted out of time, one factor in assessing the injustice of refusing an extension of time is an impression at least of the merits of the appeal. It appears to me Kuek is now seeking on yet another review to pursue a prolonged and laborious probing into tax invoices that were not pursued on the remitted review before Wood AsJ. But even if something could be said against that, in my view the conduct in this case, and the omissions in this case and the delay has been so egregious that the greater injustice lies in not bringing finality now to this case.
It is for those reasons I would set aside the notice of review filed by the appellant on 22 March 2012. I would order the appellant Kuek to pay the respondents’ costs of their application. There is reference in the respondents’ materials to a claim for indemnity costs. I would not be willing to make that exceptional order.
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