Owners Corporation No. 1579 v Ermanno Giurina
[2014] VSC 63
•27 February 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COSTS COURT
S CI 2013 01235
S CI 2012 06298
BETWEEN:
| OWNERS CORPORATION NO. 1579 MARIA RICOTTA MARIA PICONE GABRIELLE NEW | Applicants | |
| v | ||
| ERMANNO GIURINA | Respondent | |
JUDGE: | Wood AsJ | |
WHERE HELD: | Melbourne | |
DATES OF HEARING: | 20 February 2014 | |
DATE OF JUDGMENT: | 27 February 2014 | |
CASE MAY BE CITED AS: | Owners Corporation No. 1579 & Ors v Ermanno Giurina | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 63 | |
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COSTS — Application to extend time within which to review a decision of a Costs Registrar pursuant to Rule 63.56.2(5) Supreme Court (General Civil Procedure) Rules 2005.
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| APPEARANCES: | Counsel | Solicitors |
For the Applicants | Mr J McGirr | Wisewould Mahony |
| For the Respondent | In person |
HIS HONOUR:
On 14 November 2013 the respondent filed a “Notice of Application to Seek Extension of Time to Review Order of Costs Registrar”. On 20 February 2014 I heard this application. The original order of the Costs Registrar was made on 19 June 2013 in two proceedings. The 14 day time limit for a review expired on 3 July 2013 (see Rule 63.56.2(2),(4)&(5) Supreme Court(General Civil Procedure) Rules 2005). I reserved my decision and now publish my decision and reasons.
This matter has a long and unfortunate history. Proceedings were initiated in the Victorian Civil and Administrative Tribunal (“VCAT”) against the respondent on 17 February 2012. The first applicant was the sole named applicant at that time. The second to fourth applicants were joined as parties to that application at a later date on 4 April 2012. The applicants were successful in obtaining relief against the respondent on 1 May 2012 when the Tribunal made findings adverse to the conduct of the respondent. The effect of the decision was that the respondent’s position as Manager of the first applicant was terminated on 24 July 2011.
Mr Charles New was given leave to represent the applicants in the VCAT proceedings. He is the father of the fourth applicant and a retired solicitor. The first applicant is obviously an Owners Corporation and he was given leave to represent that applicant pursuant to the VCAT Act. The others are individual lot holders so they have standing to participate in their own right. This is an important point and will be discussed further.
The respondent sought leave in the Supreme Court to appeal the VCAT decision. That application was brought out of time. Leave was granted to seek leave out of time but then leave to appeal was refused by Lansdowne AsJ on 10 October 2012.
Two orders were made by Her Honour on 12 October 2012 in relation to costs. Paragraph 5 of the order states: “Subject to the following order, the applicant pay the respondents’ costs of the proceeding as taxed or agreed, including reserved costs”.
The respondents in that order are the named applicants before the Court in these current proceedings as they are seeking to tax their costs. The current respondent is the applicant in that order. The second order is contained in paragraph 6 of the order and states :
The applicant has liberty to apply to seek a different costs order in relation to any costs incurred by a step taken for the Owners Corporation alone, and not for all respondents collectively.
It is apparent from the wording of that order that the respondent had concerns about the recoverability of costs incurred by the first applicant in that proceeding. He clearly held concerns as early July 2012 about the authorisation of the solicitors to act for the first applicant. This is evidenced in the respondent’s own affidavit sworn 25 July 2013.[1] No application pursuant to the liberty to apply has been made by the respondent since then and his inaction prior to the quantification of the costs provided for in paragraph 5 of the order means he has sat on his rights and lost the opportunity to avail himself of that option.
[1]Paragraphs 26 to 32 in that affidavit.
Paragraph 5 of the order of Lansdowne AsJ was then the subject of an unsuccessful application by the respondent to extend time within which appeal that order. The respondent’s application failed before McMillan J on 18 February 2013.[2] A consequential order for costs in favour of the applicants was made on an indemnity basis and a stay application in relation to the order refused.
[2]Giurina v Owners Corporation No.1579 & Ors [2013] VSC 39.
The applicants filed their summonses to tax their costs on 9 November 2012 in relation to the order of Lansdowne AsJ and on and 13 March 2013 in relation to the order of McMillan J. It would have been apparent to the respondent on 9 November 2012 from the Summons and bill in the first matter that the applicants were progressing the quantification of the costs outlined in paragraph 5 of the order of Lansdowne AsJ. The respondent did not trigger the liberty to apply provided in paragraph 6 in that order.
Taxation of these costs occurred via separate proceedings in the Costs Court, namely S CI 2012 6298 and S CI 2013 1235, but they were dealt with on the same day by Costs Registrar Conidi on 19 June 2013. The costs arising from the order of Lansdowne As J were quantified at $12,205.30 in proceeding S CI 2012 6298. The costs arising from the order of McMillan J were quantified at $ 5,988.80 in proceeding S CI 2013 1235. The respondent participated in the taxation and in his Amended Notice of Objection dated 5 June 2013 in S CI 2013 12235 objected to every item on the basis that the costs were not “incurred for and on behalf of the applicants and are an abuse of process”. The Notice of Objection in S CI 2012 6298 was in similar terms and objected to every item on the same basis.
Implicit in all these decisions is the premise that the applicants had standing in VCAT and authority to bring the proceedings. That being so they are entitled to engage legal representation and receive the benefit of costs orders in the Supreme Court proceedings when defending applications brought by the respondent.
The applicants rely on an affidavit of John Louis McGirr sworn 22 October 2013 where he deposes that the first respondent “provided instructions to this firm through its current manager Mari Deak from Strata Connect”.[3] It is apparent from the bill of costs filed in proceedings S CI 2013 1235 (at item 27) that the solicitors acting consulted with Mr New to obtain instructions. On its face there would appear to be nothing sinister about this as he is a retired solicitor who is also the father of one of the respondents and had leave in to represent all the applicants in VCAT.
[3]Paragraph 18 of the affidavit.
The respondent applications to seek an extension of time within which to review the orders made by Costs Registrar Conidi are in relation to all items in the bills (even some items taxed off in his favour). His principal arguments relate to an assertion that the legal costs were improper as they were incurred on instructions given by Mr New who was not authorized to give those instructions and there was no valid retainer. This is, in part at least, relevant to the point identified in paragraph 6 of the order of Lansdowne AsJ. In the event that time is extended and the review is allowed to proceed further, an argument is foreshadowed by the respondent that he will seek costs against the solicitors for the applicants pursuant to rule 63.23(1)(c) and the Court’s inherent jurisdiction.
The respondent states this argument was put at the taxation but the Costs Registrar stated that it was an application that might be more appropriate for a Judge or Associate Judge.
There have been two more unsuccessful applications initiated by the respondent since the taxation concluded on 19 June 2013.
On 10 July 2013 the respondent attempted to file a Summons. This was the first unsuccessful application since the taxation on 19 June 2013. The Prothonotary declined to accept it. Consequent upon a referral to a judge, on 6 August 2013 Garde J declined to order that it be sealed and accepted on the basis that it was “irregular and an abuse of process”.
In that Summons the respondent was attempting to agitate inter alia the same issues he is currently raising before me, namely pursuant to the inherent jurisdiction and rule 23.01 the proceedings be dismissed because the costs “were not authorized to be incurred by the Applicants and were not properly incurred for and on behalf of the Applicants and therefore do not represent the costs payable…”[4] and that the applicants solicitors “pay all the costs payable by the respondent pursuant to r 63.23(1)(c)”.[5] The accompanying four page submission dated 26 July 2013, referable to both matters, and considered by Garde J, makes it clear that the respondent was seeking to challenge the authority of Mr New to instruct solicitors on behalf of the applicants. Reliance was made upon Sitzler Savage vNorthern Mining Holdings[6] in relation to challenging a solicitor’s retainer. There was also reference to a number of authorities in the written submissions[7] which did not persuade Garde J that this was anything other than an abuse of process.[8] These same authorities and similar overlapping arguments were part of the respondent’s written submission filed in support of the extension of time application being considered in these reasons. They all go to alleged misconduct on behalf of Mr New and the solicitors and the absence of a valid authority and retainer.
[4]Paragraph 1(a) of the proposed summons.
[5]Paragraph 3 of the proposed summons.
[6][2012] VSC 104.
[7]Exhibited at “EG 8” to the respondent’s affidavit 25 July 2013.
[8]eg Cornall v Nagle [1995] 2 VR 188, In re Coyle and TAC [2001] 18 VAR 251, Tamas v VCAT [2003] 9 VR 154, Michael v Freehill Hollingdale & Page (1990) 2 WAR 223, Myer v Elman (1940) AC 282, Legal Services Commissioner v Owens (2010) VCAT 1686, Matthews v SPI Electricity Pty Ltd (No 1) [2011] VSC 167, Williams v Spautz (1992) 174 CLR 509, Walton v Gardiner (1993) 177 CLR 378, Jago v District Courtof Appeal (1989) 168 CLR 23, Johnson Tiles Pty Ltd v Esso Australia (1999) FCA 1363.
Because a proposed application based on these points has already been characterised by Garde J as an abuse of process there is a strong argument to not permit this matter to proceed any further on that ground alone.
On 26 August 2013 the respondent filed the second unsuccessful application since the taxation on 19 June 2013. It was a Review of the Costs Registrar’s taxation based on the same grounds, namely that instructions were given by someone not authorized by the first applicant and therefore the solicitors had no authority to act. This Review was dismissed by Judicial Registrar Gourlay on 23 October 2013, inter alia, on the basis that the Review was out of time and no extension of time had been sought. Time expired under the Rules on 3 July 2013 (see Rule 63.56.2(5) Supreme Court (General Civil Procedure)Rules 2005.
The current application before the Court for consideration was filed by the respondent in the form of a Summons on 14 November 2013 in both taxation matters seeking an extension of time within which to review the original taxation before the Costs Registrar on 19 June 2013. There was no affidavit in support filed until 18 December 2013. The matter came on for hearing on 20 December 2013 but was adjourned with an order being made to give the applicants an opportunity to respond.
The respondent also relies on a fourteen page written submission, together with a draft written submission (comprising 148 paragraphs). The draft document was said to be to “assist the Court”. This document would not satisfy the requirements of the Notice (“Notice of Review”) permitted under Rule 63.56.2(4). The Rule requires the Notice of Review to “...state by a list each item in the bill in respect of which the party objects...”[9] and also to “...state specifically and concisely the grounds of objection...”.[10]
[9]Rule 63.56.2(4)(a).
[10]Rule 63.56.2(4)(b).
There is therefore no draft or proposed Notice of Review before the Court which is said by the respondent to be the document that the extension of time is sought in relation to. Assessing the merits of any proposed Notice of Review is one matter to be taken into account. Without such a document it is difficult to undertake this task. However, the grounds of any prospective Notice of Review can be gleaned from the written submissions as discussed above.
The principles to be applied on an application to extend time were outlined by McMillan J in this matter as follows:
15.The grant of an extension of time under the Supreme Court (General Civil Procedure) Rules 2005 (‘the Rules’) is not automatic. The object of the Court in exercising its discretion to grant extensions of time is to ensure that the Rules, which fix the time for the doing of acts, do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the Court to do justice between the parties.
16. In order to justify an extension of time, a number of considerations generally come into play, being:
(a) the length of the delay;
(b) the reasons for the delay;
(c)whether there is an arguable case, or, the prospects of the applicant succeeding in the appeal; and
(d)the extent of any prejudice to the respondent.
17. Other factors which the Court may take into account include the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application for an extension of time. These factors assist in determining whether the Rules will work an injustice.[11]
[11]Footnotes omitted.
The Respondent is a qualified solicitor who currently does not hold a practising certificate. He is in a unique position to access information in relation to how to exercise his rights in a timely fashion. The fact that he has embarked on two unsuccessful applications since the taxation partly explains the delay in bringing an application to extend time. He also relies on personal matters in his affidavit material as an excuse. It does not explain why he failed to apply to review the taxation result within time at the outset. On his own affidavit (sworn 17 December 2013) he did not approach the Registry until 2 days before the expiration of the time, and did not contact them further until 7 days after the deadline.
Further, he deposes that he was advised to seek a review, but he elected to pursue the summons that was rejected by Garde J.[12]
[12]Paragraphs 11 to 13 of his affidavit 17 December 2013.
He has previously fallen foul of the time limits in which to seek leave to appeal from the VCAT decision and the decision of Lansdowne AsJ. There is also no explanation as to why the liberty to apply granted has not been not triggered since 12 October 2012.
From the affidavits filed it is apparent the respondent is seeking to agitate the same issue with the same arguments previously advanced in previous stages of this matter or ones that he could have raised previously.
The respondent advances a number of other arguments. The costs were improperly incurred by the applicants’ solicitors as they were not authorised to act, they did not have a retainer to act, and failed to comply with disclosure obligations under the Legal Profession Act2004 and acted improperly. There is no direct evidence in support of these propositions. On the contrary there is evidence that Strata Connect were appointed managers by the first applicant on 10 February 2012.[13] Any complaint in relation to nondisclosure by the solicitors ought to come from them. The respondent was removed as manager of the first applicant by VCAT. Exhibit “LJM 7”[14] is an email from the Director of Strata Connect dated 30 July 2012 on behalf of the first applicant appointing the solicitors to act on behalf of the first applicant in the appeal lodged by the respondent. This refers to the original Supreme Court proceedings filed on 16 July 2012 by the respondent. The respondent argues that Strata Connect were not validly appointed as manager of the first applicant[15]. However, prima facie there is no reason why the solicitors should not take instructions and act on the basis of the e mail or instructions from Mr New who appeared for all the applicants at VCAT.
[13]Exhibit “JLM 10” to the affidavit of John Louis McGirr sworn 6 February 2014.
[14]Affidavit of John Louis McGirr sworn 22 October 2013.
[15]Paragraphs 63 and 64 of “Respondent’s Submission Draft”.
The legal costs in the bills of costs taxed largely represent work performed for all the applicants. There is no valid basis to challenge the authority of the solicitors acting for the second to fourth applicants. The number of items that could be construed as solely relating to work referable to just the first applicant would be minimal even if that excision exercise was warranted.
There is a presumption in the absence of proof of an express agreement to the contrary, that a solicitor who acts on instructions for a party on the record in litigation is entitled to look to that party even if instructions have come from someone else.[16] Clearly Mr New can give instructions on behalf of the second to fourth applicants. Even if Mr New did give instructions on behalf of the first applicant there is no evidence this was not authorised by the Manager. A valid retainer can be deemed and assumed in all these circumstances.
[16]Hudgson v Endrust (Australia) Pty Ltd [1986] 11 FCR 152 at 154 per Pincus J.
Taking into account all the relevant matters identified by McMillan J it is clear that an extension should not be granted. There is no satisfactory reason as to why the Review could not have been initiated within the initial time limit of 14 days. The liberty to apply has been available since October 2012 and the respondent has sat on any rights he has to agitate the status of the first applicant in relation to any entitlement to costs under paragraph 5 of the order of Lansdowne AsJ made 12 October 2012. Garde J has already characterised the main relief sought as an abuse of process. The Respondent elected to bring two other unsuccessful applications based on similar arguments instead of an application to extend time to review currently being considered.
The applicants made the submission that a review of a taxation is not the appropriate avenue to “go behind” the orders of McMillan J and Lansdowne AsJ and consider their legality.[17] The applicants have been found to be legitimate parties by VCAT and this Court, have clearly engaged solicitors on record in the proceedings and have been favoured by costs orders. The solicitors have been instructed by individuals who have apparent and ostensible authority to instruct them. The function of the Costs Court is to perfect those orders by quantifying the dollar amounts. That is the end of the matter so far as the taxation process is concerned. There is therefore no arguable case identified by the respondent which is capable of being determined in the Costs Court.
[17]Jury v Tebbs Canas Products Pty Ltd & Anor [2010] VSC 533, at [26].
As to the question of prejudice, it is clear that the fruitless court actions initiated by the respondent have caused additional delay and expense in the finalisation of the dispute. As a matter of practicality it is a reasonable assumption to make that there will be some gap between actual and recoverable costs for the applicants. With every unsuccessful step initiated by the respondent that gap potentially widens even if most of these costs are actually recovered. As observed by Kyrou J in Kuek v Devflan Pty Ltd.[18]
45.In Aon Risk Services Australia Ltd v Australian National University ([(2009] 239 CLR 175) the High Court recognised that an order for costs may not always overcome injustice to a party occasioned by the grant of an extension of time to an opposing party, and that a court is entitled to weigh in the balance the strain and uncertainty that litigation imposes upon litigants, including corporate litigants.
[18][2012] VSC 571.
There is justification to assume that the respondent might be impecunious on the basis of assertions previously made by him to the Court.[19] If that is a correct assertion, (and it must be assumed the respondent was not misrepresenting his financial position to the Court), then there is greater prejudice if there are poor prospects of recovery of any of the costs orders. The respondent also obtained a waiver of a Court fee of $350.50 on 14 November 2013 on the grounds that payment would cause financial hardship. Again it must be assumed the respondent did not mislead the Prothonotary when he filed material in support of the waiver application. McMillan J found on 18 February 2013[20] that the applicants had suffered prejudice as a result of the appeal by the respondent and his delays. The events since that time can only have increased that established prejudice.
[19]See Giurina v Owners Corporation No 1579 & Ors [2013] VSC 39, at [32].
[20]Ibid, at [43].
Granting an extension of time to pursue a Review that has no or little prospect of success will cause further prejudice.
Further, the Civil Procedure Act2010 imposes obligations on litigants. The Respondent has already breached s 18 by attempting to advance arguments in an application that were deemed by Garde J to constitute an abuse of process, and s 25 by not acting promptly and minimising delay. As stated by Kyrou J in Kuek:
79.The Act must be taken seriously by litigants and their lawyers. In an appropriate case, the Court is entitled to – and will – say to a party seeking to enforce its rights in a manner that is antithetical to the overarching purpose and to that party’s overarching obligations that ‘enough is enough’, and will act to curtail those rights in the interests of the administration of justice.”
Pursuant to s 28(1) of that Act breaches can be taken into account in a civil proceeding when exercising any power - not just in relation to costs.
There are sound reasons not to extend time. The respondent’s summonses filed in both matters are dismissed.
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