Quach v MLC Limited

Case [2022] FCA 586

FEDERAL COURT OF AUSTRALIA

Quach v MLC Limited [2022] FCA 586

File number: ACD 19 of 2021
Judgment of: CHEESEMAN J
Date of judgment: 20 May 2022
Catchwords:

PRACTICE AND PROCEDURE – referee appointed pursuant to s 54A(1) of the Federal Court of Australia Act 1976 (Cth) and Division 28.6 of the Federal Court Rules 2011 (Cth) to prepare a report for the Court in respect of the respondent’s application for security for its costs of the appeal – where the appellant moves the Court to reject the referee’s report – where the respondent opposes the relief sought by the appellant and contends that the referee’s report should be adopted in the whole – whether the report should be adopted, varied or rejected – Held: referee’s report adopted in the whole.

PRACTICE AND PROCEDURE – security for costs – where in addition to an order that the appellant pay security for its costs, the respondent seeks ancillary orders including: (1) a stay of the appeal pending payment of security for its costs; and (2) in the event of non-payment of security within the specified time, dismissal of the appeal – Held: ancillary orders made.

Legislation:

Federal Court of Australia Act 1976 (Cth), ss 54A, 56

Insurance Contracts Act 1984 (Cth), s 13

Federal Court Rules 2011 (Cth), rr 28.67, 36.09(1)(a), 36.09(1)(b), 36.09(1)(c)
Cases cited:

All Class Insurance Brokers Pty Ltd (in liq) v Chubb Insurance Australia Ltd [2020] FCA 840

Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16

Dye v Commonwealth Securities Ltd [2012] FCA 992

Equity Access Ltd v Westpac Banking Corporation [1989] FCA 361; ATPR 40-972

Frigger, in the matter of Computer Accounting and Tax Pty Ltd (in liq) (No 2) [2018] FCA 612

Frigger v Kitay [2019] FCA 624

Gulf Conveyor Systems Pty Ltd v Gulf Integrated Systems Solutions Pty Ltd [2020] FCA 1245

Hardingham v RP Data Pty Ltd [2020] FCA 1062

KP Cable Investments Pty Ltd v Meltglow Pty & Ors [1995] FCA 76; 56 FCR 189

Lim v Comcare [2016] FCA 1346

Pateras v State of Victoria [2022] FCA 238

Re Culleton [2017] HCA 3; 340 ALR 550
Division: General Division
Registry: Australian Capital Territory
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 48
Date of hearing: 17 May 2022
Counsel for the Appellant: The appellant appeared in person.
Counsel for the Respondent:  Mr N A Olson
Solicitor for the Respondent:  Turks Legal

ORDERS

ACD 19 of 2021
BETWEEN:

MICHAEL VAN THAN QUACH

Appellant
AND:

MLC LIMITED

Respondent

ORDER MADE BY:

CHEESEMAN J

DATE OF ORDER:

20 MAY 2022

THE COURT ORDERS THAT:

1.Pursuant to s 54A(3) of the Federal Court of Australia Act 1976 (Cth) (Act), the Report of the Referee, National Judicial Registrar Colbran, dated 26 April 2022, be adopted in the whole.

2.Pursuant to s 56 of the Act and r 36.09(1)(a) of the Federal Court Rules2011 (Cth), the appellant provide security for the respondent’s costs…

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AGLC
Quach v MLC Limited [2022] FCA 586
Case
[2022] FCA 586
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Dr Quach, the appellant, sought to appeal against a decision made by MLC Limited, the respondent, in the primary proceedings. Dr Quach filed an application for leave to appeal and subsequently filed an interlocutory application for security for costs in the event leave to appeal was granted. MLC filed an application for security for costs. A referee was appointed to prepare a report for the Court. The parties filed written submissions and Dr Quach appeared via Microsoft Teams to make oral submissions. Dr Quach sought an order that the Court reject the report in the whole. MLC opposed the application and submitted that the report should be adopted in the whole. The Court was required to decide whether the report should be adopted, varied or rejected. The Court also needed to consider the ancillary orders MLC sought in its interlocutory application.

The Court adopted the report of the referee in its entirety. The Court noted that the report identified and summarised the principles applicable to the exercise of the Court’s discretion in the context of an application under r 28.67 of the Rules. The Court concluded that the report was correct in its analysis of Dr Quach’s submissions and its findings. The Court found that Dr Quach's submissions in support of his contention that the report should be rejected in whole were primarily directed to challenging factual findings made by the referee and by the primary judge in the decision the subject of appeal. The Court found that it was not an appropriate exercise of the Court’s discretion to allow matters agitated before the referee to be re-explored so as to lead to qualification or rejection of the report. The Court further found that the report was based on sufficient factual material to entitle the referee to reach the conclusions she did. The Court concluded that the report should be adopted in the whole and that the appeal should be stayed until security has been provided, or dismissed, if security is not provided within 21 days of entry of the orders.

The Court made the following orders: (1) the report of the referee be adopted in the whole; (2) the appellant provide security for the respondent’s costs in the sum of $39,395, such security to be provided either by way of payment into Court or by provision of an unconditional bank guarantee; (3) the appeal be stayed until the security for costs has been given by the appellant; (4) the appeal be dismissed if security for costs has not been provided by the appellant by 4:00 pm on 10 June 2022; (5) the appellant pay the respondent’s costs in respect of the interlocutory application filed by the appellant on, and dated, 2 May 2022 and the interlocutory application filed by the respondent on 13 September 2021 and dated 8 September 2021; and (6) the Registrar refuse to accept for filing the notice of a constitutional matter under s 78B of the Judiciary Act 1903 (Cth), lodged by the appellant on 16 May 2022.

Orders

Orders of the court

1. Pursuant to s 54A(3) of the Federal Court of Australia Act 1976 (Cth) (Act), the Report of the Referee, National Judicial Registrar Colbran, dated 26 April 2022, be adopted in the whole.

2. Pursuant to s 56 of the Act and r 36.09(1)(a) of the Federal Court Rules 2011 (Cth), the appellant provide security for the respondent’s costs in the sum of $39,395, such security to be provided either by way of payment into Court or by provision of an unconditional bank guarantee.

3. Pursuant to r 36.09(1)(b) of the Rules, the appeal be stayed until the security for costs has been given by the appellant pursuant to Order 2.

4. Pursuant to s 56 of the Act and r 36.09(1)(c) of the Rules, the appeal be dismissed if security for costs has not been provided by the appellant pursuant to Order 2 by 4:00 pm on 10 June 2022.

5. The appellant pay the respondent’s costs in respect of:

(a) the interlocutory application filed by the appellant on, and dated, 2 May 2022; and

(b) the interlocutory application filed by the respondent on 13 September 2021 and dated 8 September 2021.

6. The Registrar refuse to accept for filing the notice of a constitutional matter under s 78B of the Judiciary Act 1903 (Cth), lodged by the appellant on 16 May 2022.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Ground 1 appears to be directed to a denial of procedural fairness in the way in which the primary proceedings were managed. The Referee noted that there was nothing on the face of the orders of the primary judge that indicated that Dr Quach was not afforded a fair hearing in the way that the case was managed. The Referee understood that by Ground 2 of the appeal, Dr Quach contends that the primary judge was not bound to apply the Evidence Act 1995 (Cth), and in particular s 91 of the Evidence Act, in the proceedings at first instance in relation to what factual findings may be drawn from two decisions of NCAT and a “medical report” (which Dr Quach did not tender in any event). Noting that the Referee was necessarily considering the notice of appeal at a high level, her conclusion that if her understanding of Ground 2 was correct, the ground appears to be untenable, is correct. The Referee frankly acknowledges that it is difficult to follow what is meant by Ground 3. Ground 4 was similarly incoherent and not tenable as a matter of law. Based on her analysis, the Referee found that prima facie the likelihood of success of the appeal was low. In doing so, the Referee noted that “the judge at first instance dismissed [Dr Quach]’s application in a most definitive manner”: RR[28]. I interpolate to note that the Referee’s description of the primary judge’s reasons was apt: see, for example, PJ[51], PJ[57], PJ[59], PJ[61], PJ[63], PJ[73], PJ[75] and PJ[76]. The Referee’s conclusion as to the prima facie likelihood of success of the appeal being low was supported by the material before her and was a relevant matter to consider for the purpose of the security for costs application.Other factors relevant to the exercise of discretion The Referee considered that the following factors weighed in favour of making an order in favour of MLC for security for costs. First, the application for security was brought promptly: RR[34]. Second, any impecuniosity of Dr Quach was not brought about by MLC: RR[35]. Finally, the Referee had regard to Dr Quach’s litigious history including that a vexatious litigant order has been made against him under the Vexatious Proceeding Act 2008 (NSW) in Quach v New South Wales Health Care Complaints Commission [2017] NSWCA 267 as another factor that was in favour of MLC being afforded some costs protection: Frigger v Kitay [2019] FCA 624: RR[38]. Quantum of Security Having regard to the established principles summarised in the Report at [46] – [48], and applying discounts to categories of work for which costs were claimed variably from 5% to 50%, the Referee concluded that $39,395.00 should be paid in security for MLC’s costs. The security sought by MLC in its interlocutory application was in the sum of $67,000. SUBMISSIONS Dr Quach is self-represented. He relies on his written submissions and two affidavits affirmed by him on 9 May 2022 and 16 May 2022. The affidavits were filed without leave and were the subject of objection. The objection was withdrawn on the basis that the affidavits would be treated as a submission. Dr Quach also relied upon the material that he put forward before the Referee and which is recited at [10] and [11] of the Report. He appeared via Microsoft Teams (at his request) to make oral submissions at the hearing of this application.

Decision

Reasons for decision

The Report was sent to the parties on 3 May 2022 with a preliminary indication that the Court intended to adopt the findings in the Report subject to any application under r 28.67 of the Rules. That same day Dr Quach filed an application seeking an order that the Court reject the Report in the whole. The parties filed and served written submissions ahead of an oral hearing. MLC opposes the application and submits that the Report should be adopted in the whole. MLC otherwise seeks the orders in its interlocutory application to the effect that the appeal be stayed until security has been provided, or dismissed, if security is not provided within 21 days of entry of the orders.CONCLUSION IN SUMMARY FORM For the reasons which follow, I am satisfied that the Court should adopt the Report of the Referee in the whole and make orders in accordance with the opinions contained therein and with prayers 2, 3 and 4 of the interlocutory application filed by MLC on 13 September 2021.LEGAL PRINCIPLESAdoption of Referee’s Report Rule 28.67(1) relevantly provides that after a referee’s report has been given to the Court, a party may, on application, ask the Court to adopt, vary or reject the report, in the whole or in part. The principles applicable to the exercise of the Court’s discretion in the context of an application under r 28.67 of the Rules are well established. For a recent statement of the applicable principles see: Pateras v State of Victoria [2022] FCA 238 at [22] – [23] (Anderson J) and the authorities cited therein. In summary: (1)The application is not an appeal. The Court does not conduct a hearing de novo or a rehearing. A party who is dissatisfied with a referee’s report is not entitled to require the Court to reconsider and re-determine afresh matters, whether of fact or law, which the party wants to contest. (2)The discretion to adopt, vary or reject a referee’s report is to be exercised in a manner consistent with the context and purpose of the relevant rules. The purpose of the Rules is to provide, where the interests of justice so require, a form of partial resolution of disputes alternative to orthodox litigation, and it would frustrate that purpose to allow the reference to be treated as a rehearsal for the real contest.(3)If the source of a party’s dissatisfaction with a report is a question of law, or the application of legal standards to established facts, a proper exercise of discretion requires the judge to consider and determine that matter afresh.(4)If the referee’s report reveals some error of principle, absence or excessive jurisdiction, patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding, that would ordinarily be a reason for rejection. In this context, “patent misapprehension of the evidence” means a lack of understanding of the evidence and not the weight attributed to it; and “perversity or manifest unreasonableness” means a conclusion that no reasonable tribunal of fact could have reached.(5)In general, the referee’s findings of fact should not be re-agitated before the Court. The Court will not reconsider disputed questions of fact where there is factual material sufficient to entitle the referee to reach the conclusions he or she did, particularly where the disputed questions are in a technical area in which the referee has expertise. It is not enough for an aggrieved party to point to errors of fact which would be amenable to correction by an appellate court.(6)Even if it were to be shown that the Court might have come to a different conclusion in some respect from that reached by the referee, absent any error of the kind referred to above, it would not be a proper exercise of the discretion conferred by r 28.67 of the Rules, to allow matters agitated before the referee to be re-explored so as to lead to qualification or rejection of the report.(7)The Court is entitled to consider the futility and cost of re-litigating an issue determined by the referee where the parties have had ample opportunity to place before the referee the evidence and submissions upon which they wish to rely.(8)Although the reasons given by the referee may appear to be adequate, where the party challenging the report contends that they are not because the referee did not deal with “very significant evidence”, the Court may examine the evidence to see whether the reasons were in fact inadequate because they omitted to refer to such evidence.The above summary of principles is taken from Gulf Conveyor Systems Pty Ltd v Gulf Integrated Systems Solutions Pty Ltd [2020] FCA 1245 at [13] – [21] (Katzmann J) and omits the authorities cited therein. Security for Costs

Ratio Decidendi

Legal Principle Established

Rule 36.09(1) of the Rules provides:(1) A party may apply to the Court for an order that:(a)the appellant give security for the costs of the appeal, and for the manner, time and terms for giving the security; and(b)the appeal be stayed until security is given; and(c)if the appellant fails to comply with the order to provide security within the time specified in the order—the appeal be stayed or dismissed.CONSIDERATION OF THE REFEREE’S REASONS Dr Quach’s submissions in support of his contention that the Report should be rejected in whole are primarily directed to challenging factual findings made by the Referee and by the primary judge in the decision the subject of appeal. For that reason, it is helpful to begin by reviewing the Referee’s reasons for forming her opinion in respect of each of the questions. In preparing the Report the Referee had regard to the material identified in the Referee’s Report (RR) [10] and [11] which included written submissions prepared by or on behalf of each of the parties and to affidavits filed for each of the parties. The Referee had regard to: (1) an affidavit of Alphonse Luke Edwards dated 8 September 2021, sworn 26 April 2022, filed by MLC in support of the application for security for costs; and (2) five affidavits of Dr Quach affirmed 22 March 2021, 25 August 2021, 24 November 2021, 6 December 2021 and 19 April 2022 opposing the application. I interpolate to note that the parties had ample opportunity to prepare evidence in respect of the security for costs application and to put that evidence before the Referee. The parties also made written submissions to the Referee in advance of a hearing before the Referee at which Dr Quach and MLC’s Counsel made oral submissions. The Referee summarised the general principles applicable to exercising the discretion to grant security for costs: RR[13] – [16]. The Referee correctly summarised the general principles with an appropriate focus on the grant of security in the particular context of appeal proceedings. Before turning to the application of the general principles to the particular facts, the Referee addressed three broad submissions on the relevant principles advanced by Dr Quach. First, the Referee addressed Dr Quach’s submission that the Court did not have jurisdiction on the basis that there was no power to order security for costs in the ICA. The Referee considered that this submission was misconceived. The Referee noted that s 56 of the FCA Act empowers the Court to order an appellant in an appeal under Division 2 of Part III to give security for the payment of costs that may be awarded against him or her. The Referee further noted that the power conferred by s 56 is not subject to, or conditional upon, the ICA. The Referee’s observation, and her conclusion, in respect of Dr Quach’s first submission was correct. The second of Dr Quach’s submissions, which the Referee considered, was based on a cost order made by Justice Rares on 3 February 2020 in separate proceedings (ACD61/2019, being proceedings instituted by Dr Quach for leave to appeal from a decision in respect of a claim for legal professional privilege made by MLC): RR[19]. The 3 February 2020 cost order required “[MLC] pay [Dr Quach’s] costs of the appeal as a litigant in person”. Dr Quach submitted that the Referee was bound by that order so that “[MLC] [must] pay [Dr Quach’s] costs of the [MLC’s application for security for costs] as a litigant in person”. The Referee noted that the present appeal proceedings (ACD19/2021) are different proceedings to ACD61/2019. That is correct. The appeal proceedings do not concern an appeal from ACD61/2019 but, rather, arise from ACD18/2019. The Referee concluded that the costs order in ACD61/2019 was not relevant to the appeal proceedings and that she was also not bound to apply those orders on a “like for like” basis and order that MLC pay Dr Quach’s costs on the security application as a “litigant in person”: RR[19]. The Referee’s conclusion was correct.