Michos v Eastbrooke Medical Centre Pty Ltd (No 2)
[2019] VSC 437
•28 June 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2018 00633
| CON MICHOS | Appellant |
| v | |
| EASTBROOKE MEDICAL CENTRE PTY LTD | Respondent |
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JUDGE: | Richards J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 10 May 2019, further written submissions filed 22 May 2019 and 7 June 2019 |
DATE OF JUDGMENT: | 28 June 2019 |
CASE MAY BE CITED AS: | Michos v Eastbrooke Medical Centre Pty Ltd (No 2) |
MEDIUM NEUTRAL CITATION: | [2019] VSC 437 |
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PRACTICE AND PROCEDURE – Appeal against orders of associate judge refusing application for protective costs order under Civil Procedure Act 2010, s 65C – Further appeal against orders of associate judge refusing adjournment of trial – Both appeals dismissed – Application for extension of time to appeal part of decision of associate judge refusing leave to appeal – Application refused.
COSTS – Costs of substantive appeal – Whether good reason to depart from usual rule that costs follow the event – Not public interest litigation – Respondent not in breach of overarching obligations under Civil Procedure Act 2010 – Whether appellant’s failure to accept respondent’s Calderbank offer was unreasonable in the circumstances – Not unreasonable – Appellant to pay respondent’s costs on a standard basis.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | In person | |
| For the Respondent | Mr T Warner | Allens |
HER HONOUR:
On 7 March 2019, I dismissed an appeal by Con Michos from a decision of the Victorian Civil and Administrative Tribunal, made in a dispute between Mr Michos and Eastbrooke Medical Centre Pty Ltd (the Clinic). The dispute concerned a disagreement between Mr Michos and the Clinic about access to a medical report that had been sent to the Clinic. The background facts are set out in my reasons for dismissing the appeal.[1]
[1]Michos v Eastbrooke Medical Centre Pty Ltd [2019] VSC 131.
Although the substance of the appeal has been determined, there remain some further issues for decision:
(a) First, there is Mr Michos’ appeal from Ierodiaconou AsJ’s order refusing his application for a protective costs order, made on 30 January 2019;
(b) Next, there is an appeal from Ierodiaconou AsJ’s order of 12 February 2019 dismissing Mr Michos’ application to adjourn the trial, and ordering him to pay the Clinic’s costs of the directions hearing on 12 February 2019;
(c) Third, there is Mr Michos’ notice of appeal against the ruling by Ierodiaconou AsJ made on 6 September 2018, granting leave to appeal on limited grounds, and refusing leave to appeal on all other grounds. Mr Michos seeks an extension of time in which to bring an appeal against the refusal of leave to appeal;
(d) Finally, there is the question of the costs of the proceeding.
All four matters were listed before me for hearing on 10 May 2019. The parties had by then filed written submissions in relation to the first, second and fourth matters, together with affidavits on which they relied.
At the start of the hearing, Mr Michos, who appeared in person, said that he was not fit to continue, mentally, physically or emotionally. While he did not explain why he was not fit, and did not provide any supporting medical evidence, he certainly did not look well. He sought to have all outstanding matters stayed pending the outcome of his appeal of my orders of 7 March 2019 to the Court of Appeal. The Clinic opposed any adjournment of the hearing, and sought to have the remaining issues decided without further expense or delay. After discussion, I made orders for the filing of further written submissions, and determined that I would decide the remaining issues on the basis of those submissions.
I have now received and considered the following further submissions:
(a) the Clinic’s further written submissions dated 22 May 2019, opposing Mr Michos’ application for an extension of time to appeal Ierodiaconou AsJ’s refusal of leave to appeal;
(b) Mr Michos’ written submissions in reply dated 7 June 2019, replacing his reply submissions filed on 6 May 2019; and
(c) an email from the Clinic’s solicitors dated 13 June 2019.
For the reasons that follow:
(a) I dismiss Mr Michos’ appeal against the orders of Ierodiaconou AsJ made on 30 January 2019, dismissing his application for a protective costs order;
(b) I dismiss his appeal against the orders of the associate judge made on 12 February 2019;
(c) I do not extend time for Mr Michos to appeal Ierodiaconou AsJ’s orders of 6 September 2018, refusing leave to appeal the Tribunal’s orders on certain grounds; and
(d) Mr Michos will be ordered to pay the Clinic’s costs of the proceeding on a standard basis.
Protective costs appeal
Mr Michos applied for a protective costs order at the commencement of this proceeding. In his initial affidavit in support of his application for leave to appeal, he explained his application for a protective costs order:
I am also seeking a protective costs order in this matter for the amount of five thousand dollars ($5,000.00) capping any potential liability in the event of an unsuccessful appeal, as my sole income derives from a Disability Support Pension.
The application was determined on the papers, on the basis of the following material:
(a) written submissions filed by Mr Michos dated 19 September 2018;
(b) the Clinic’s written submissions dated 10 October 2018;
(c) an affidavit of Peter John Elliot Arthur dated 10 October 2018, filed on behalf of the Clinic;
(d) affidavits of Mr Michos dated 30 October 2018 and 18 December 2018; and
(e) written submissions in reply filed by Mr Michos on 18 December 2018.
Ierodiaconou AsJ published reasons for her decision not to make the protective costs order sought by Mr Michos.[2] After summarising the submissions made by the parties, her Honour set out the applicable principles,[3] referring to ss 7, 9 and 65C of the Civil Procedure Act 2010 (Vic), in particular s 65C(2A) of that Act, and relevant Court of Appeal authority.[4] She then analysed each of the relevant considerations identified in s 65C(2A),[5] before explaining her overall conclusion that a protective costs order would not further the overarching purpose of the Civil Procedure Act:[6]
Section 7 of the Civil Procedure Act 2010 provides the overarching purpose ‘is to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute’. Weighing up all the factors above, I do not consider that it would further the overarching purpose to make a protective costs order. The trial is listed for a one day hearing of two discrete issues. Whilst the appeal raises some issues of public importance regarding statutory clarification, they are not of any great significance. As discussed above, there may be little, if any, practical benefit to Mr Michos even if he is successful on appeal. The absence of a protective costs order is unlikely to deter Mr Michos from pursuing his appeal.
[2]Michos v Eastbrooke Medical Centre Pty Ltd (Ruling No 2) [2019] VSC 13 (Reasons).
[3]Reasons, [19]-[25].
[4]Bare v Small (2013) 47 VR 255 (Bare v Small) and Khalid v Secretary, Department of Transport, Planning and Local Infrastructure [2014] VSCA 115 (Khalid), [30], discussed at [24]-[25] of the Reasons.
[5]Reasons, [26]-[48].
[6]Reasons, [49].
The Clinic submitted that the order dismissing the application for a protective costs order was an order as to costs, in respect of which leave to appeal is required under s 17A(2) of the Supreme Court Act 1986 (Vic). It further submitted that the order was an exercise of discretion that may only be set aside on appeal on the basis of demonstrated error of the type described in House v King.[7] On that basis, the Clinic submitted that her Honour’s decision can only be set aside on appeal if it is shown that she acted upon a wrong principle, mistook the facts, failed to take into account a relevant consideration or took into account an irrelevant consideration, or made a decision that was manifestly unreasonable.
[7](1936) 55 CLR 499, 505.
I accept the Clinic’s submission that, in order to succeed on the protective costs appeal, Mr Michos must demonstrate error of the type described in House v King.[8] I also accept that refusal to make a protective costs order under s 65C(1) of the Civil Procedure Act is an ‘order as to costs’ to which s 17A(2) of the Supreme Court Act applies. As I explain in the following paragraphs, I am not satisfied that Mr Michos has demonstrated any error in the associate judge’s decision, and so leave to appeal should be refused.
[8]Delta Electricity v Blue Mountains Conservation Society Inc (2010) 176 LGERA 424 (Delta Electricity), [50].
In his submissions, Mr Michos focused on her Honour’s consideration of whether there is a public interest element to the proceeding,[9] the undesirability of him abandoning the proceeding if a protective costs order is not made,[10] the costs likely to be incurred and the parties’ respective financial positions.[11] Overall, Mr Michos submitted that the associate judge failed to ensure that the parties were on an equal footing, which was the principle underpinning the power to make a protective costs order in order to facilitate access to justice.
[9]Civil Procedure Act, s 65C(2A)(f), considered at Reasons, [36].
[10]Civil Procedure Act, s 65C(2A)(e), considered at Reasons, [31]-[35].
[11]Civil Procedure Act, s 65C(2A)(g) and (i), considered at Reasons, [39]-[48].
Protective costs orders – relevant considerations
The breadth of the Court’s power to make an order in relation to the legal costs of a proceeding is reinforced by s 65C of the Civil Procedure Act. Section 65C(1) provides that, in addition to any other power a court may have in relation to costs, a court may make any order as to costs it considers appropriate to further the overarching purpose. The overarching purpose of the Civil Procedure Act is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.[12] One such order is an order that fixes or caps recoverable costs in advance, often referred to as a protective costs order.[13]
[12]Civil Procedure Act, s 7.
[13]Civil Procedure Act, s 65C(2)(d).
In Bare v Small,[14] the Court of Appeal surveyed the Australian and United Kingdom authorities as to the considerations that bear on the discretion to make a protective costs order. The Court considered the application before it in light of the factors identified in Corcoran v Virgin Blue Airlines Pty Ltd,[15] while emphasising that the factors are not exhaustive and do not amount to a ‘test’.[16]
[14]Bare v Small, [14]-[37].
[15][2008] FCA 864, [6]-[7].
[16]Bare v Small, [37].
These factors have since been incorporated into s 65C, with the insertion of s 65C(2A) by the Justice Legislation Amendment (Access to Justice) Act 2018 (Vic). The explanatory memorandum for the amending bill makes clear that the matters listed in s 65C(2A) are ‘based on the criteria considered by the Court of Appeal in Bare v Small …, and are intended to guide the exercise of the court’s discretion. The matters are not exhaustive, and do not amount to a test.’[17]
[17]Explanatory Memorandum for the Justice Legislation Amendment (Access to Justice) Bill 2018 (Vic), cl 8, 4. See also Victorian Government (Department of Justice and Regulation), Access to Justice Review, August 2018, 449-51, 463-4.
Section 65C(2A) of the Civil Procedure Act now provides:
In making an order under subsection (1) to fix or cap recoverable costs in advance, the court may consider the following matters—
(a) the timing of the application;
(b) the complexity of the factual or legal issues raised in the proceeding;
(c) whether the party seeking the order claims damages or other form of financial compensation;
(d) whether the claim of the party seeking the order has a proper basis and is not frivolous or vexatious;
(e) the undesirability of the party seeking the order abandoning the proceeding if the order is not made;
(f) whether there is a public interest element to the proceeding;
(g) the costs likely to be incurred by the parties;
(h) whether the other party has been uncooperative or delayed the proceeding;
(i) the ability of the party seeking the order to pay costs;
(j) whether a significant number of members of the public may be affected by the outcome of the proceeding;
(k) whether the claim of the party seeking the order raises significant issues as to the interpretation and application of statutory provisions.
It is a matter for the judge exercising the discretion what weight, if any, is given to each factor, individually and relative to one another. Further, none of the enumerated factors is decisive. Whether a judge makes a protective costs order in a given case will depend on the judge’s overall assessment of whether such an order would further the overarching purpose, or would otherwise be an appropriate exercise of the Court’s general power in respect of costs.
Public interest element?
In her earlier decision granting leave to appeal on two grounds concerning the construction of provisions of the Health Records Act 2001 (Vic), the associate judge determined that it was of public importance to clarify those provisions regarding collection of and access to individuals’ health information to assist in the proper operation of the Health Records Act.[18] Her Honour referred to this conclusion in the Reasons, but said that the two discrete issues on which she had granted leave to appeal were not significant.[19]
[18]Michos v Eastbrooke Medical Centre Pty Ltd [2018] VSC 517, [29].
[19]Reasons, [36].
Mr Michos submitted that her Honour had understated the significance of the construction issues raised in his appeal. He pointed out that there was no existing authority that could be followed as to the correct construction of s 25 or s 34(2)(c) of the Health Records Act. He further submitted:[20]
Notwithstanding that the ruling [on leave to appeal] was based on the public importance of the issues raised and the Plaintiff providing evidence of the publication of the case at VCAT, with significant widespread circulation, the Defendant has also not seriously contended that there is no public interest issues raised in these proceedings. Furthermore it could not be reasonably suggested that a significant number of members of the public will not be affected by the outcome, as it would be near impossible to find an individual, (past, present or in the future) within Australia, that does not have a health record that contains “health information”.
In addition to the above paragraph, the fundamental purpose and object of the HRA is to provide an enforceable right to the individual’s health information and to protect an individual’s privacy which is a protected human right under the Charter.
To not give significant weight to an individual’s right and specifically not to give proper consideration to a human right that Parliament has enacted, is obstructive, and contrary to the duty of the Court which is entrusted with the responsibility of interpreting legislation when conflict arises.
[20]Submissions of Mr Michos dated 22 March 2019, [29]-[31].
Mr Michos submitted that the case was of some importance to the Clinic, as it had to amend its policy to comply with the Health Records Act and operates several other medical centres. He drew my attention to the recommendation of the Australian Law Reform Commission that a court should be able to make a protective costs order in cases of public interest if it was satisfied that:[21]
·The proceedings will determine, enforce or clarify an important right or obligation affecting the community or a significant sector of the community;
·The proceedings will affect the development of the law generally and may reduce the need for further litigation;
·The proceedings otherwise have the character of public interest or test case proceedings.
[21]Cited in Blue Mountains Conservation Society Inc v Delta Electricity (2009) 170 LGERA 1, [43].
Mr Michos referred me to a number of cases in which a protective costs order had been made, including Woodlands v Permanent Trustee Company Pty Ltd,[22] Corcoran, and Delta Electricity v Blue Mountains Conservation Society Inc.[23] there was a public interest element in each of those cases that favoured the making of a protective costs order:
[22](1995) 58 FCR 139.
[23](2010) 176 LGERA 424, on appeal from the decision of the New South Wales Land and Environment Court in Blue Mountains Conservation Society Inc v Delta Electricity (2009) 170 LGERA 1.
(a) In Woodlands, the applicants brought representative proceedings against several respondents, arising out of home loans provided under the auspices of the New South Wales government. Wilcox J accepted that there was a public interest element to the proceedings, which raised seriously arguable questions of importance to ‘something like a thousand’ other people in the same position as the applicants.
(b) Corcoran was a case brought against an airline by two applicants with disabilities, who complained that travel criteria imposed by the airline were indirectly discriminatory. Bennett J was of the view that, while the applicants had a private interest in the outcome, there was a broader impact to be considered – the ‘ability of disabled persons to fly with Virgin, a major commercial airline in Australia, without the extra cost of a carer raises questions of public interest beyond the private interest of the applicant’.[24]
(c) Delta Electricity involved civil enforcement proceedings under environment protection legislation, in which a conservation group alleged that the owner of a power station was polluting a drinking water catchment in breach of its licence conditions. The Court of Appeal agreed with the assessment of the New South Wales Land and Environment Court that the proceedings were in the public interest.[25]
[24]Corcoran, [33].
[25]Delta Electricity, [209].
I have also considered the Court of Appeal’s decision in Bare v Small, an appeal that raised a number of significant and complex questions of law under the Charter of Human Rights and Responsibilities Act 2006 (Vic). Those questions included whether the right under s 10(b) of the Charter, to protection from cruel, inhuman or degrading treatment, generates a duty of independent investigation and the interpretation and application of s 38 of the Charter. The Court of Appeal accepted that these questions carried a clear public interest and potentially affected ‘a great number of members of the public’.[26]
[26]Bare v Small, [43].
The public interest element in each of those cases contrasts with the public interest in the determination of this appeal. As the associate judge found, the statutory construction questions on which she granted leave to appeal were of some public importance. However, the substance of the dispute between Mr Michos and the Clinic was not. It was a minor disagreement between an individual patient and a private medical clinic about access to a medical report, which involved some temporary frustration and inconvenience for Mr Michos. He obtained a copy the report through another clinic only a few hours after requesting access from the Clinic. Once the Clinic had agreed to amend its policy, as suggested by the Health Complaints Commissioner,[27] his complaints had largely been resolved.[28] It is difficult to see that there was any public interest served by escalating the dispute to the Victorian Civil and Administrative Tribunal and then to this Court.
[27]Michos v Eastbrooke Medical Centre Pty Ltd [2018] VCAT 119, [17].
[28]For a similar assessment of public interest on a protective costs application see Aitken v State of Victoria (2013) 46 VR 676, [77].
I am not persuaded that there was any error in the associate judge’s consideration of the public interest element in the proceeding. She correctly identified the public interest in clarifying the relevant provisions of the Health Records Act. She did not consider these issues to be of any great significance, an assessment that I share in the circumstances of this case.
Undesirability of abandoning the proceeding
Another factor that may be considered in determining an application for a protective costs order is the undesirability of the party seeking the order abandoning the proceeding if the order is not made.[29] The associate judge considered this factor, and it is apparent from her reasons that it was not a matter that weighed in favour of making the order sought:[30]
Analogously,[31] and relevantly, here Mr Michos was able to procure a copy of the medical report elsewhere within hours of his request. Further, as discussed in the first ruling, following Mr Michos’ complaint to the Health Complaints Commissioner, Eastbrooke agreed to change its policy regarding access to health information so that patients are not always required to make an appointment with a doctor to receive a copy of their health information.
Given the above, there may be little, if any, practical benefit to Mr Michos even if he is successful on appeal. Therefore it is not desirable for Mr Michos to continue the appeal in respect of his own interests. As discussed below, whilst there is public importance in clarifying the legislation, the proceeding does not raise significant issues.
Regardless, I doubt that Mr Michos will abandon the proceeding if he does not obtain a protective costs order. Indeed, he has not said that he will do so. Rather, he may abandon it. It is evident that Mr Michos is passionate about the issues and his actions to date are consistent with ardent pursuit of the proceeding.
[29]Civil Procedure Act, s 65C(2A)(e).
[30]Reasons, [33]-[35].
[31]With the Court of Appeal’s analysis in Khalid v Secretary, Department of Transport, Planning and Local Infrastructure [2014] VSCA 115, [32(c)].
As already noted, I share the associate judge’s assessment of the public importance of the appeal. It follows that I agree with her Honour that success on the appeal would have been of little, if any, practical benefit to Mr Michos. He had the medical report to which he had sought access, and the Clinic had agreed to change its policy as suggested by the Health Complaints Commissioner.
Mr Michos drew my attention to passages in Corcoran and Woodlands, to the effect that a protective costs order might be made if, in the absence of such an order, the applicant may discontinue the litigation or be inhibited or reluctant to continue it.[32] These are not the words used in s 65C(2A)(e), and there was no error in the associate judge having regard to this factor in the terms formulated by Parliament.
[32]Corcoran, [11], [37], [42], [50], [54]; Woodlands, 148.
Most significantly, the associate judge’s assessment that the ‘absence of a protective costs order is unlikely to deter Mr Michos from pursuing his appeal’[33] turned out to be correct.
[33]Reasons, [49].
Mr Michos applied to adjourn the hearing of his substantive appeal until his appeal against the refusal of a protective costs order had been determined. The associate judge dismissed that application, at a directions hearing on 12 February 2019.
Mr Michos made a further application for an adjournment at the start of the hearing before me on 19 February 2019. At that time, his protective costs appeal had been filed but had not been accepted by the Registry. I refused the adjournment application, for reasons given on transcript, as follows:
At the commencement of this morning's hearing, Mr Michos renewed the application for an adjournment that was made to Associate Justice Ierodiaconou on 12 February, and refused by Her Honour on that date. Mr Michos continues to seek an adjournment of the hearing of his appeal, on the basis that he is in the process of appealing a refusal of his application for a protective costs order in the proceeding. He maintains that he cannot decide whether to proceed with this appeal until he knows the outcome of his protective costs application.
I refuse the application for an adjournment for the same reasons as those noted by Associate Justice Ierodiaconou in other matters in her order made on 12 February 2019.
I also note that Mr Michos was not able to point me to any evidence before Associate Justice Ierodiaconou to the effect that he would definitely withdraw the proceeding if he did not receive a protective costs order, which is consistent with Her Honour's findings to that effect at paragraphs 35 and 49 of Her Honour's ruling on the protective costs application.
I am also of the view that there is no advantage to Mr Michos in an adjournment being granted at this stage, because the costs of today have been incurred in any event. All parties are here ready to proceed with the hearing of the appeal, and if Mr Michos is ultimately unsuccessful in his application for a protective costs order and an adverse costs order is made against him, then that would be the outcome in any event.
On the other hand, there may be some advantage to all of the parties in having the substantive issues determined before the protective costs order appeal is heard. That may obviate the need for the appeal to be heard at all, and it will certainly confine the issues that are to be debated.
What I will do, although I have declined the adjournment application, is to do what I can to see that that appeal is listed before me; and, of course, I will not make a costs order on the substantive application until the protective costs appeal is dealt with.
After two short breaks, Mr Michos told me that he would continue with the hearing of his appeal because he was ‘forced to continue’. He then turned to his submissions on the questions of law in the appeal. The hearing of the appeal proceeded and was completed that day, as listed. Mr Michos was not, in the end, deterred from pursuing his appeal by the absence of a protective costs order.
There was, in my view, no error in the associate judge’s consideration of the undesirability of Mr Michos abandoning the proceeding if the protective costs order was not made.
Likely costs and parties’ ability to pay
Ierodiaconou AsJ considered the costs likely to be incurred in the proceeding together with Mr Michos’ ability to pay costs. In relation to the former, her Honour held:[34]
There are no costs estimates in evidence. There were no submissions as to the quantum of costs. Costs in respect of the application for leave to appeal (a one day hearing) are reserved, and the trial is listed for a one day hearing. There have been a number of appearances at interlocutory hearings. Given this, it is unsurprising that the parties proceed on the basis that the costs will be above $5,000.
[34]Reasons, [39].
The associate judge then discussed the evidence concerning Mr Michos’ ability to pay a costs order. She found that his only income was a disability support pension. There was also evidence that he was the sole director and shareholder of a company, Webbingdon Pty Ltd, which owned a property in Ascot Vale. Mr Michos lived at the property rent free, together with his mother, who had a life interest in the property. Mr Michos claimed that the company held the property on trust, although there was only limited evidence about the trust and his role in it. The Clinic contended that Mr Michos was not impecunious, and had the means to pay costs if ordered to do so.
The associate judge observed that Mr Michos’ evidence about whether he had assets or other financial resources to draw upon was ‘somewhat opaque’.[35] She rejected his assertion that he was at risk of destitution if he had to pay a costs order, given that he lived rent free in the Ascot Vale property. In light of the uncertainties about Mr Michos’ financial position, she assessed his ability to pay a costs order neutrally.[36]
[35]Reasons, [47].
[36]Reasons, [48].
Mr Michos submitted that it would have been desirable for the Clinic to inform the Court with an estimate of its costs likely to be incurred, and said that the Court could have made an enquiry as to the estimate of costs. While the associate judge may have been assisted by better information about the costs likely to be incurred, there was no error in deciding the application on the material before her. It was uncontroversial that the costs of the proceeding would exceed $5,000, the amount at which Mr Michos sought to have his costs liability capped.
Mr Michos next submitted that the Clinic had not provided any evidence of its financial resources, and so the Court could not assess whether the Clinic would suffer any financial hardship if a protective costs order was made. The short answer to this submission is that the Clinic’s financial position was not a matter that the associate judge was required to consider. Generally, the parties’ financial circumstances are not relevant to whether a costs order should be made.[37] Section 65C(2A)(i) alters that position in relation to an application for a protective costs order, and permits the court to consider the applicant’s ability to pay costs. By contrast, the ability of the other party to bear its own costs is not a matter referred to in s 65C(2A) of the Civil Procedure Act.
[37]Board of Examiners v XY (2006) 25 VAR 193 (Board of Examiners v XY), [31]-[36] (Chernov JA, Neave JA agreeing), [40]-[43] (Nettle JA).
The associate judge properly determined the application on the evidence before her. She was not obliged to consider the Clinic’s financial position, about which there was no evidence.
Equal footing and equality of arms
The associate judge also considered whether, overall, a protective costs order would further the overarching purpose of the Civil Procedure Act – to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute – and concluded that it would not.
Mr Michos submitted that, by refusing his application, the associate judge had failed to ensure that the parties were on an equal footing. He argued that ensuring that parties are on an equal footing is a principle that underpinned the power to make a protective costs order in s 65C of the Civil Procedure Act.
This argument relied on an English rule of court that applied in R (Corner House Research) v Secretary of State for Trade and Industry.[38] The Court of Appeal held in Bare v Small that the equivalent Victorian provisions, including s 65C, are not concerned with ensuring that the parties are on an ‘equal footing’.[39] The associate judge was right to consider the matter by reference to the overarching purpose of the Civil Procedure Act, and not an inapplicable English rule.
[38][2005] 1 WLR 2600.
[39]Bare v Small, [24], [48].
Related to the concept of ‘equal footing’ is the principle of ‘equality of arms’, which is an aspect of the right to a fair hearing in s 24(1) of the Charter.[40] The principle of equality of arms is concerned with procedural equality, and requires that a party has a reasonable opportunity to put their case in conditions that do not place them at a substantial disadvantage compared to their opponent.[41] It has particular relevance in a case such as this one, where one party has legal representation and the other is self-represented.[42]
[40]The fair hearing right in s 24(1) applies directly to courts and tribunals when they exercise their functions: Charter, s 6(2)(b), De Simone v Bevnol Constructions & Developments Pty Ltd (2009) 25 VR 237, [52]; Slaveski v Smith (2012) 34 VR 206, [54].
[41]Ragg v Magistrates’ Court of Victoria (2008) 18 VR 300, [46]-[47]; Knight v Wise [2014] VSC 76, [36].
[42]Matsoukatidou v Yarra Ranges Shire Council [2017] VSC 61, [117]-[138].
The Clinic responded to this submission by referring to the Court of Appeal’s decision in Khalid v Secretary, Department of Transport, Planning and Local Infrastructure,[43] as authority for the proposition that concepts such as ‘equal footing’ and ‘equality of arms’ are not to be read into the Civil Procedure Act. Khalid concerned an application for a protective costs order made before the commencement of s 65C(2A). The applicant had submitted that ‘equality of arms’ between the parties was necessary to achieve the just resolution of the real issues in dispute, in accordance with the overarching purpose, and was an important factor in granting a protective costs order. The Court of Appeal held:
The term ‘equality of arms’ does not appear in the CPA nor in the Rules. These costs allocation rules have been the subject of considerable analysis, review and well developed jurisprudence. The reports that led to civil procedure reform both here and in the UK, including those that led to the introduction of the CPA do not identify a principle of equality of arms as informing the CPA’s purpose, or as being necessary to the just determination of a dispute more broadly. Given the long history of these rules, we do not accept, in the absence of clear words to the contrary, that s 7 of the CPA incorporates such a principle.
[43]Khalid v Secretary, Department of Transport, Planning and Local Infrastructure [2014] VSCA 115.
That decision binds me to hold that the principle of equality of arms was not one that the associate judge had to apply in deciding whether a protective costs order should be made to further the overarching purpose. In any event, neither party made submissions to me, or to the associate judge, as to how the principle of equality of arms – which is concerned with procedural equality – might have influenced the exercise of her discretion.
Conclusion on protective costs order
I do not consider that there was any error in the associate judge’s consideration of any individual factor relevant to whether a protective costs order should be made, or her Honour’s overall assessment that making a protective costs order would not further the overarching purpose of the Civil Procedure Act. Leave to appeal should not be granted. I will therefore dismiss Mr Michos’ appeal against the refusal of his application for a protective costs order.
Adjournment appeal
Separately, on 17 February 2019, Mr Michos appealed against the orders of the associate judge made on 12 February 2019. Those orders were:
1. The application for an adjournment made today is dismissed.
2. The trial date is confirmed.
3. The plaintiff pay the defendant’s costs of today on the standard basis.
Mr Michos sought orders staying the proceeding until his appeal was determined, and setting aside the associate judge’s orders.
At the commencement of the trial before me on 19 February 2019, Mr Michos made a further application to adjourn the trial. I refused that application, for the reasons set out at [30] above, and the trial proceeded. That decision effectively determined Mr Michos’ application for a stay of the proceeding, and his appeal against orders 1 and 2 made by the associate judge on 12 February 2019. Those orders are now spent.
That leaves the appeal against the order that Mr Michos pay the Clinic’s costs of the directions hearing on 12 February 2019. The directions hearing was listed by orders of the associate judge made on 4 October 2018. ‘Other matters’ in those orders contemplated that the directions hearing would be vacated if both parties considered it unnecessary. The Clinic’s solicitor emailed Mr Michos seeking his consent to vacate the directions hearing. He did not consent, because was considering appealing the refusal of his protective costs application.
The directions hearing on 12 February 2019 proceeded. Mr Michos confirmed that he was ready for trial, but applied to have the trial adjourned pending determination of his protective costs appeal. The Clinic opposed any adjournment. The associate judge refused the adjournment application, for reasons set out in ‘Other matters’ of her orders dated 12 February 2019. In relation to costs, her Honour noted:
The usual rule as to costs is that ‘costs follow the event’. The predominant purpose of the final directions hearing was Mr Michos’ application for adjournment. Given that Mr Michos was unsuccessful in the application, Mr Michos is ordered to pay the defendant’s costs in the hearing of 12 February 2019 on the standard basis.
Mr Michos submitted that the ‘sole purpose of the directions hearing was to inform and assist the Court for the management of the case’. He argued the directions hearing was necessary because he had ‘stated numerous times to the Court that the continuation of the case would depend heavily on the outcome of the PCO application’.
The Clinic submitted that Mr Michos requires leave to appeal against the adjournment costs order, under s 17A of the Supreme Court Act and that, if leave is granted, he can only succeed if he demonstrates error of the type described in House v King.[44] It argued that a high threshold must be satisfied to obtain leave to appeal against a costs order.[45] There was, it submitted, no manifest error or miscarriage of the associate judge’s discretion as to costs.
[44](1936) 55 CLR 499, 505. See [10] above.
[45]Relying on Spotless Group Ltd v Premier Building and Consulting Pty Ltd [2008] VSCA 115, [10]-[11].
I do not consider that there was any error in the costs order made by the associate judge on 12 February 2019. The only reason why the directions hearing went ahead that day was to hear Mr Michos’ application to adjourn the trial. The parties were ready for trial. There was no need to hold a directions hearing in order for Mr Michos to inform the Court that he intended to appeal the refusal of his protective costs application. That intention could have been communicated by email, or simply by filing the notice of appeal – as Mr Michos in fact did on 12 February 2019. As her Honour said, the usual rule is that costs follow the event. Mr Michos’ adjournment application was refused, for reasons that I adopted in refusing his further adjournment application on the morning of the trial. In those circumstances, it was unremarkable that Mr Michos was ordered to pay the Clinic’s costs of the hearing.
As to whether leave to appeal is required, I note that Mr Michos appealed against the whole of the orders made on 12 February 2019 and not only the costs order. In those circumstances, it is arguable that leave is not necessary. I need not determine that question, however, because I am positively satisfied that the adjournment costs order was a proper exercise of the associate judge’s discretion as to costs.
The appeal against the orders of Ierodiaconou AsJ made on 12 February 2019 is dismissed.
Extension of time
On 13 March 2019, Mr Michos filed a third notice of appeal, against the part of the decision of Ierodiaconou AsJ made on 6 September 2018 refusing leave to appeal on a number of grounds. This notice of appeal was filed long after the expiry of the 14 day time limit prescribed in r 77.06.2(1) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), and so Mr Michos seeks an extension of time under r 77.06.2(6).
The Clinic submits that it has a vested interest in the decision of the associate judge that should not be disturbed without good reason.[46] Put another way, limitation periods are imposed because there is a public interest in certainty, finality and the speedy resolution of disputes.[47] There must therefore be good reason to allow an appeal outside the 14 day time limit.
[46]Feiglin v Ainsworth [2014] VSC 233 (Feiglin), [20]; Hughes v National Trustees [1978] VR 257, 263.
[47]Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 552–3 (McHugh J). I discussed the public interest in the finality of litigation in more detail in Naik v Monash University [2018] VSC 605, [60]-62].
The factors that bear on whether time to appeal should be extended include the length and reasons for the delay, whether there would be any prejudice to the respondent if time were extended, and whether the appeal so lacks merit as to be futile.[48] No one factor is necessarily determinative of whether it is just to extend time to appeal in a given case.
[48]Muto v Secretary to the Department of Planning and Community Development (2013) 38 VR 293, [13]; Feiglin [20]-[22].
The limitation period here is short – only 14 days. This evinces a clear intention that appeals against a decision of an associate judge should be brought promptly. In that context, the length of the delay – more than seven months – is significant. During that time, the appeal on the grounds for which leave was granted had been heard and determined.
Mr Michos said that he did not appeal the associate judge’s decision within the 14 day time limit because he was preparing his written submissions in support of his protective costs application. The associate judge directed Mr Michos to file and serve those written submissions by 20 September 2018 – 14 days after her Honour’s decision on leave to appeal. Once his submissions were done, he looked into appealing the refusal of leave to appeal and found that he was out of time. He said that he did not find out that he could seek an extension of time until March 2019, when the Court of Appeal registry explained that an appeal can be brought out of time with leave of the Court.
I do not find this explanation compelling. While Mr Michos is not a lawyer, during this litigation he has proved himself able to understand and apply the procedural rules of the Court. He does not appear to have taken any steps to inform himself about whether an appeal could be brought after the 14 day time limit had expired. I infer that his interest in appealing the associate judge’s refusal of leave to appeal was revived by the fact that the substantive appeal had recently been determined against him.
The Clinic submitted, and I accept, that it would be prejudiced if an extension of time were granted. It prepared for and appeared at the hearing of Mr Michos’ appeal, which was determined in its favour. It did so on the basis that Mr Michos had been granted leave to appeal on only two grounds. It would be oppressive to the Clinic to permit Mr Michos to reagitate, at this late stage, the grounds on which leave to appeal was refused.
Mr Michos said very little about the merits of the proposed appeal. His notice of appeal set out only generic grounds of appeal, and did not identify any specific error in the associate judge’s decision. His most recent written submissions addressed only the associate judge’s conclusion that, while there was a real or significant argument as to whether it was open to the Tribunal to find that the appointment for 15 November 2016 was cancelled on 4 November 2016, that finding was not critical to the Tribunal’s decision. Mr Michos contends that this was wrong, because the finding was critical to the Tribunal’s conclusion that he had withdrawn his request for access.
I do not accept that contention. The relevant paragraphs of the Tribunal’s reasons were:[49]
Relevant here, section 34(2)(c) of the HR Act provides that an organisation must provide access as soon as reasonably practicable but after no more than 45 days of receipt of the request.
As a consequence, the Clinic was not required to hand over a copy of the report to Mr Michos as soon as he arrived at the Clinic or even later on that day. The Clinic was entitled to require him to wait until a doctor had an opportunity to review the document and consider whether access should be granted at all.
Because Mr Michos obtained a copy of the report elsewhere within hours, there was no opportunity or need for the Clinic to undertake that review and assessment process. I am satisfied that, once he communicated the fact he had obtained the report elsewhere and the 15 November 2016 appointment was cancelled, the request for access effectively lapsed. In these circumstances there was no breach of section 34(2)(c).
It is clear from the Tribunal’s reasons that it did not matter whether the appointment for 15 November 2016 was cancelled on 4 November or on a later day. That is because s 34(2)(c) of the Health Records Act allowed the Clinic up to 45 days from receipt of the request to provide access – i.e. until 19 December 2016. His request for access effectively lapsed well within that period – after he told the Clinic he had obtained the report elsewhere and the 15 November appointment was cancelled. The associate judge was right to conclude that it was not material when the appointment was cancelled, and was right to refuse leave to appeal on that ground.
[49]Michos v Eastbrooke Medical Centre Pty Ltd [2018] VCAT 119, [66]-[68].
Mr Michos has not identified any arguable ground of appeal against the refusal of leave to appeal.
Overall, I am firmly of the view that it would not be just to grant the extension of time that Mr Michos seeks. The delay was long, the explanation for it was unpersuasive, and it would be oppressive to the Clinic to reopen the question of leave to appeal. There is no demonstrated merit in the proposed appeal. To the contrary, the proposed appeal concerns a minor disagreement that caused Mr Michos only temporary inconvenience and frustration, to which very significant judicial and administrative resources have already been devoted.[50]
[50]Michos v Eastbrooke Medical Centre Pty Ltd [2019] VSCA 140, [58].
The application for an extension of time to appeal part of Ierodiaconou AsJ’s decision of 6 September 2018, refusing leaving to appeal, is dismissed.
Costs of the proceeding
The Clinic seeks an order that Mr Michos pay its costs of the proceeding. There are two issues for determination:
(a) whether a costs order should be made in the Clinic’s favour; and
(b) if so, on what basis.
Should Mr Michos be ordered to pay the Clinic’s costs of the proceeding?
The Clinic was the successful party on the substantive appeal. As a result of this decision, it is also the successful party on each of Mr Michos’ three appeals against decisions of Ierodiaconou AsJ. The usual rule is that costs follow the event. A successful party can reasonably expect that the court will order the unsuccessful party to pay its costs, in the absence of special circumstances. I understand Mr Michos to contend that no costs order should be made against him in the circumstances of this case because:
(a) his appeal was in the public interest; and
(b) the Clinic contravened its overarching obligations under the Civil Procedure Act.
Mr Michos relied on the High Court’s decision in Oshlack v Richmond River Council[51] in support of his argument that there should be no order as to costs. Oshlack stands for the propositions that:
(a) there is no absolute rule that a successful party is entitled to be compensated for its legal costs by an unsuccessful party; and
(b) in considering whether there are special circumstances that justify departure from the usual rule, a judge may take into account that the prime motivation of the unsuccessful applicant was to uphold the public interest and the rule of law, that the applicant had nothing to gain from the litigation, and that there was a real public interest in the outcome.
[51](1998) 193 CLR 72.
Mr Michos argued that his appeal was brought in the public interest, to clarify the interpretation of the Health Records Act and to obtain findings that the Clinic had breached its obligations under that Act. He did not seek compensation on appeal and argued that he had no private interest in the outcome of the case. On that basis, he sought to distinguish this case from cases such as Hollier v Australian Maritime Safety Authority (No 2)[52] and Weinstein v Medical Practitioners Board.[53] In both of those cases, the fact that the litigation had clarified the law was not a sufficient reason to depart from the usual rule that costs follow the event.
[52][1998] FCA 975 (Hollier).
[53](2008) 21 VR 29 (Weinstein).
For the reasons given earlier,[54] I do not think that this proceeding can be characterised as public interest litigation. Mr Michos has pursued the Clinic since November 2016 over a private grievance that caused him some temporary inconvenience and frustration. Once the Clinic had agreed to amend its policy, at the suggestion of the Health Complaints Commissioner, there was no public interest served by litigating the complaint further.
[54]See [23] above.
The appeal did achieve some clarification in the law, although it did not change the outcome. I found that the Tribunal had misconstrued s 25 of the Health Records Act, by reading down the word ‘collected’ in s 25(2) by reference to the phrase ‘necessary for one or more of its functions or activities’ in Health Privacy Principle 1.1.[55] I have taken into account that this might have some wider benefit, but I am not persuaded that it is sufficient reason to depart from the usual rule that costs follow the event.[56]
[55]Michos v Eastbrooke Medical Centre Pty Ltd [2019] VSC 131, [28]-[41].
[56]Hollier, 4-5; Weinstein, 41 [8]; Noone v Mericka (No 2) [2012] VSC 2, [28]-[34]; Spear v Hallenstein (No 2) [2018] VSC 207, [10]-[12].
In the course of the hearing on 10 May 2019, Mr Michos sought an order under s 29 of the Civil Procedure Act to deal with alleged contraventions by the Clinic of its overarching obligations under the Civil Procedure Act. He had difficulty articulating the orders that he sought, or how he said that the Clinic was in breach of its overarching obligations. In his replacement reply submissions, he identified a number of matters that he said amounted to ‘misconduct’ on the part of the Clinic in its conduct of the litigation, and asked the Court to make an (unspecified) order of its own motion.[57] It seems to me that these matters are best dealt with in determining whether I should make a costs order in the Clinic’s favour.
[57]Civil Procedure Act, s 29(2)(b).
Mr Michos made the following complaints about the Clinic’s conduct in the litigation:
(a) He said that the Clinic has constantly changed its position in response to his complaint, raising different and sometimes conflicting arguments at different stages of the litigation. He said that the fact that the Clinic kept ‘moving the goalposts’ prejudiced him because he did not know the case he had to meet.
(b) He took exception to suggestions by the Clinic that he had not been frank with the Court about his financial situation.
(c) He said that the Clinic had misquoted Corcoran in submissions filed in opposition to his protective costs application. He pointed out that part of a sentence in [41] of the judgment had been omitted, altering its meaning.
I have carefully considered whether any of these matters might amount to a contravention of the Clinic’s overarching obligations under the Civil Procedure Act, and have concluded that they do not. For that reason, I did not ask the Clinic to respond to Mr Michos’ complaints. My views in relation to each of the matters he raised are:
(a) It is true that the Clinic has relied on a number of different arguments in defending Mr Michos’ complaint, and that its defence evolved as the complaint moved from the Health Complaints Commissioner to the Tribunal and then to this Court. There was nothing wrong or unusual about that. While it may have been confusing and frustrating for Mr Michos, I cannot see that it prejudiced him in pursuing his complaint. He was making a complaint, not responding to one, and he always bore the burden of establishing that he had a right of access under the Health Records Act, and that the Clinic had breached his right of access. Before the Tribunal, he failed on both points. On appeal to this Court, he succeeded on the first point, but failed on the second.
(b) Mr Michos put his financial circumstances in issue by making the protective costs application. The Clinic was entitled to test his assertion that he was impecunious, when there was evidence that suggested otherwise. Ierodiaconou AsJ rightly described the evidence about Mr Michos’ financial resources as ‘somewhat opaque’,[58] and the Clinic could properly make submissions on that basis. I do not consider that the Clinic accused Mr Michos of fraud; rather, it queried whether he had made full disclosure of his finances.
(c) In its written submissions in opposition to the protective costs application, the Clinic submitted that there was no basis to conclude that Mr Michos would be ‘forced’ to abandon his appeal if a protective costs order was not made. In a footnote, it set out an extract from [41] of Corcoran. That extract omitted the qualifying words ‘While it may not be necessary to establish that the party was forced to abandon litigation for fear of costs …’ The omission was significant in the context, and there was nothing to indicate that words had been omitted from the extract. If I thought the omission might have had any impact at all on the conduct or the outcome of the substantive appeal, I would have asked the Clinic for its response to the allegation that the omission was misleading. However, the relevance of the extract was confined to the protective costs application, and it had no bearing on the substantive appeal. In addition, the extract was of little importance, given that the relevant criteria were set out in s 65C(2A) of the Civil Procedure Act.
[58]Reasons, [47].
For completeness, I accept the Clinic’s submission that Mr Michos’ financial circumstances are not relevant to the exercise of my discretion as to costs.[59]
[59]Board of Examiners v XY, [31]-[36] (Chernov JA, Neave JA agreeing), [40]-[43] (Nettle JA). See also GE Dal Pont, Law of Costs (4th ed, 2018), [8.30].
The appropriate order as to costs is that Mr Michos should pay the Clinic’s costs of the proceeding, including the reserved costs of the application for leave to appeal, any other reserved costs, and the costs of Mr Michos’ three appeals against decisions of the associate judge.
Costs on a standard basis or an indemnity basis?
The Clinic submitted that Mr Michos should pay its costs on an indemnity basis from 26 September 2018. On that date it wrote a letter to Mr Michos, offering to settle the proceeding for a payment of $5,000 and proposed consent orders that the proceeding be dismissed with no order as to costs. The offer was made without prejudice save as to costs, in accordance with the principles set out in Calderbank v Calderbank.[60]
[60][1975] 3 All ER 333.
In assessing whether costs should be ordered on a standard or an indemnity basis, the critical question is whether it was unreasonable in all of the circumstances for Mr Michos not to accept the Clinic’s offer.[61] Among the factors to be considered in assessing reasonableness are:[62]
[61]Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435 (Hazeldene), [23].
[62]Hazeldene, [25].
(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d) the offeree’s prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed;
(f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree’s rejecting it.
Some, but not all, of those factors are in the Clinic’s favour:
(a) The offer was made well before trial, but not until after the leave to appeal hearing. As a result of that hearing, Mr Michos had leave to appeal on two grounds and knew that the associate judge considered that he had a real argument to put on both grounds.
(b) The offer was open for acceptance until 22 October 2018, giving Mr Michos nearly 4 weeks to consider the offer. I consider this to be a reasonable time.
(c) The offer was to forego any claim the Clinic had for its costs of the proceeding, and to pay Mr Michos $5,000. This no doubt seemed like a significant compromise from the Clinic’s point of view. However, it looked very different from Mr Michos’ point of view. He told me that he did not accept the offer because it was ‘nonsensical’ when he was not looking for any monetary benefit.[63] He sought clarification of the interpretation of ss 25 and 34 of the Health Records Act, and vindication of his right of access to his health records. He submitted that it was also of public importance for the statutory interpretation questions to be judicially determined.
[63]Mr Michos sought modest compensation before the Tribunal, but did not challenge the Tribunal’s finding that it would not have awarded compensation if it had found that the Clinic breached his right of access.
(d) As to prospects of success, at the time the offer was made Mr Michos had just been granted leave to appeal on two grounds. After a contested hearing, the associate judge had concluded that, on those two grounds, Mr Michos had a real or significant argument that the Tribunal had erred. Her Honour also considered that his arguments raised questions of public importance, so that it was just to grant leave to appeal.
(e) The terms of the offer were expressed clearly.
(f) The letter foreshadowed an application for indemnity costs.
Having considered all of these matters, I have come to the view that it was not unreasonable for Mr Michos not to accept the offer in the circumstances of this case. When the offer was made, he had been granted leave to appeal on two grounds that raised questions of some public importance, on which he had real or significant arguments to put. The letter did not offer to compromise on matters of importance to Mr Michos.
I will order that Mr Michos pay the Clinic’s costs of the proceeding on a standard basis.
Disposition
I make the following orders:
(a) The notice of appeal dated 12 February 2019, against the orders of Ierodiaconou AsJ made on 30 January 2019, is dismissed.
(b) The notice of appeal dated 17 February 2019, against the orders of Ierodiaconou AsJ made on 12 February 2019, is dismissed.
(c) The application dated 18 March 2019, for an extension of time to appeal part of the decision of Ierodiaconou AsJ made on 6 September 2018, is dismissed.
(d) The appellant is to pay the respondent’s costs of the proceeding on a standard basis, to be assessed by the Costs Court if not agreed. The costs of the proceeding include the reserved costs of the application for leave to appeal, any other reserved costs and the costs of the appellant’s notices of appeal dated 12 February 2019, 17 February 2019 and 18 March 2019.
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