Sameh Refaat v Michael Barry
[2015] VSCA 268
•29 September 2015
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2014 0066
| SAMEH REFAAT | Appellant |
| v | |
| MICHAEL BARRY | Respondent |
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| JUDGES: | WARREN CJ, ASHLEY and TATE JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | On the papers |
| DATE OF JUDGMENT: | 29 September 2015 |
| MEDIUM NEUTRAL CITATION: | [2015] VSCA 268 |
| JUDGMENT MAY BE CITED AS: | Refaat v Barry (No 2) [2015] VSCA 268 |
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COSTS — Self-represented litigants — Overarching obligations of parties under the Civil Procedure Act 2010 — Relevance of security for costs order — No point of principle.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Dr S Refaat (in person) | --- |
| For the Respondent | Mr M Barry (in person) | --- |
WARREN CJ
ASHLEY JA
TATE JA:
On 20 August 2015, the Court made orders disposing of the substantive appeal in this proceeding and providing for the filing of written submissions by the parties on the question of the costs of the appeal.[1] The ultimate outcome of the appeal was that the appellant was unsuccessful, save that the trial judge’s costs order was set aside. The facts giving rise to the dispute are set out in the Court’s substantive reasons and need not be restated here.
[1]Refaat v Barry [2015] VSCA 218.
It is relevant to note that following the initiation of the appeal, on 1 August 2014 the Court ordered Dr Refaat to pay security for Mr Barry’s costs of the appeal in the sum of $15,000.[2] That amount was paid into Court as required by the Court’s orders.
[2]Orders of Hansen and Beach JJA dated 1 August 2014. Mr Barry’s summons filed 11 July 2014 had also sought an order restraining Dr Refaat from disposing of the stone cutting machine the subject of the dispute, but no such order was made.
Written submissions were filed by both the appellant and the respondent.[3]
[3]Regrettably, it would appear that neither party prepared his submissions with the assistance of a lawyer. Given that Dr Refaat represented himself at the hearing of the substantive appeal, this might have been expected so far as he was concerned. However, Mr Barry was represented at the hearing by counsel, and there remain solicitors on the record of the Court who ostensibly act for him. They have advised that they no longer have instructions to act and have sought leave to file a notice of ceasing to act. The Court has dealt with that application separately.
Mr Barry’s submissions purport to set out by way of background a range of delays and frustrations that attended the conduct of the trial. Reference is made to matters that ought not to be before the Court, including details of strategic discussions between Mr Barry and his counsel that occurred in the course of the trial. In the circumstances, we would not have regard to those matters beyond recognising that Mr Barry asserts he faced added difficulty and expense because of Dr Refaat’s approach to the litigation. In relation to the appeal costs, Mr Barry seeks his costs of the appeal on an indemnity basis, fixed in the sum of $113,574. He seeks that the security for costs paid by Dr Refaat be released to him forthwith, and requests the grant of an indemnity certificate under s 4 of the Appeal Costs Act 1998. Implicit in Mr Barry’s submission is the proposition that he was substantially successful on the appeal, stating as he does that ‘the [a]ppeal seemed to be another run of the trial’.
Dr Refaat’s submissions sought four categories of relief:
(a) the fixing of the costs of the appeal in the sum of $10,000;
(b) a stay of execution of the judgment pending the institution and determination of a proceeding to be brought by Simplex;
(c) an order that the respondent have only 50 per cent of his costs of the trial below;
(d) amendment of the Court’s reasons for judgment to correct, by use of the slip rule, a supposed error in the description of Dr Refaat’s reliance on an authority.
In relation to item (a), Dr Refaat submitted that Mr Barry’s notice of contention was in reality a cross-appeal that consumed time unnecessarily. He asserted that Mr Barry’s costs had been ‘exaggerated’, and contended that as he, Dr Refaat, had only been ordered to pay security for costs in the sum of $15,000, Mr Barry’s costs ought not to exceed that amount. He further submitted that as Mr Barry had failed in a bid to take the stone cutting machine the subject of the dispute as security or to otherwise freeze Dr Refaat’s assets, the appropriate order was to fix the appeal costs at $10,000 and to release the balance of the security to Dr Refaat.
In relation to items (b) to (d), we observe that they are not matters presently before the Court, not being matters concerning the costs of the appeal. Mr Barry was not on notice of Dr Refaat’s intention to seek those forms of relief and, understandably, he has not made submissions on those matters. Any application for a stay of execution of the judgment would require Dr Refaat to file an application in the usual way, with an affidavit in support.
As for the costs of the trial, Dr Refaat raised costs issues as part of his appeal grounds and the Court has determined those matters.[4] In summary, the Court held that the trial judge erred in awarding indemnity costs for the full period of the trial and set aside the trial judge’s costs order.[5] The Court rejected Dr Refaat’s contention that each party ought to bear his own costs for the trial and found instead that the appropriate order in all of the circumstances was that Dr Refaat should pay the costs of the trial on the standard basis for its full duration.[6] It is not now open to Dr Refaat to seek further trial costs.
[4]Refaat v Barry [2015] VSCA 218, [198] ff.
[5]Ibid [209]–[211], [213].
[6]Ibid [212].
Finally, though it is an incidental matter, we would reject Dr Refaat’s submission that the appeal judgment ought to be corrected. His written submissions handed up at the hearing of the appeal reveal that he in fact relied upon the case of Eastern Pearl Corporation v Groundhog Sales and Rentals Pty Ltd[7] in support of his submissions on the cutting room costs. Hence, his assertion to the contrary in his latest submissions is wrong.
[7][2012] FCA 406.
Before we turn to the question to be determined, we would observe that the Court’s order provided for the filing of submissions, after the parties considered the judgment, of no more than two pages on the question of the costs of the appeal. It was not an invitation to raise other issues or to seek to re-agitate matters that have already been determined. Of Dr Refaat’s six pages of submissions, barely more than half a page concerns the issue presently before the Court. This is not the first occasion upon which Dr Refaat has caused the Court to spend time on peripheral or trivial issues in the course of this appeal. It must be recalled that all parties to civil proceedings, including self-represented parties, have overarching obligations under the Civil Procedure Act 2010,[8] including an obligation to cooperate with other parties and the court in connection with the conduct of the proceeding.[9] In Yara Australia Pty Ltd v Oswal,[10] the Court stated:
The [Civil Procedure] Act prescribes that parties to a civil proceeding are under a strict, positive duty to ensure that they comply with each of the overarching obligations and the court is obliged to enforce these duties. The statutory sanctions provide a valuable tool for improving case management, reducing waste and delay and enhancing the accessibility and proportionality of civil litigation. Judicial officers must actively hold the parties to account.[11]
The Court may take into account any contravention of the overarching obligations in exercising its powers, including in exercising its discretion as to costs.[12] This is a matter to which we will return.
[8]Sections 10(1)(a), 11.
[9]Ibid s 20.
[10][2013] VSCA 337.
[11]Ibid [26] (Redlich and Priest JJA and Macaulay AJA).
[12]Civil Procedure Act 2010, s 28.
Rule 64.38(1) of the Supreme Court Rules provides that the Court may make any order for the whole or any part of the costs of an application or appeal as it thinks fit. The Court’s discretion to award costs is a wide one, even if, in general, costs follow the event: in the absence of special circumstances, a successful litigant will usually receive his or her costs,[13] even if he or she does not succeed on all heads of claim.[14]
[13]Donald Campbell & Co Ltd v Pollak [1927] AC 732, 809, 811 (Viscount Cave LC).
[14]Ritter v Godfrey [1920] 2 KB 47; Oshlack v Richmond River Council (1998) 193 CLR 72, 97–8 (McHugh J); 124 (Kirby J).
In the exercise of its discretion, the Court is entitled to look to the realities of the litigation and will attempt to do ‘substantial justice’ between the parties on matters of costs.[15]
[15]Chan v Chen [2009] VSCA 233, [10] (J Forrest AJA, with whom Maxwell P and Redlich JA agreed).
Dr Refaat’s appeal challenged the decision of the judge below on no fewer than 14 grounds.[16] Ultimately, it was successful only in overturning the trial judge’s costs order,[17] on a ground which occupied comparatively little time at the hearing of the appeal and in the parties’ written submissions. There can be no doubt that in practical terms, Dr Refaat enjoyed very little success on the appeal. Indeed, as the Court’s judgment shows, in many cases his appeal grounds were misguided or lacked an evidentiary foundation.[18]
[16]Refaat v Barry [2015] VSCA 218, [73].
[17]Ibid [215].
[18]See, eg, ibid [96], [110]–[114], [124]–[125], [130], [135], [145], [195].
The question then arises whether there are any special circumstances relevant to the exercise of the Court’s discretion as to costs. One such matter is Dr Refaat’s lack of legal representation on the appeal. While this is not a matter capable of exempting him from liability for costs or from his overarching obligations under the Civil Procedure Act, it remains relevant in considering how he conducted his case. In that regard, his lack of representation provides some explanation of his pursuit on the appeal of remedies to which only Simplex could be entitled. It would also have made it more difficult for him to prepare clear submissions. Thus, while Mr Barry may well have incurred additional costs because of the way Dr Refaat conducted his appeal, some latitude may be afforded to Dr Refaat as a self-represented litigant.
Such latitude is not, however, without its limits. In circumstances where Dr Refaat has pressed and sought to re-agitate so many trivial arguments on the appeal, in addition to those of greater substance, it is appropriate given his very limited success that he pay a proportion of Mr Barry’s costs of the appeal. Many of Dr Refaat’s appeal grounds lacked a proper basis, occupied disproportionate time, and did not go to the real issues in dispute between the parties. To limit his liability to the $15,000 already paid as security would be to ignore the Court’s obligation to hold parties to account for their conduct of litigation. Just as Mr Barry could not accrue exorbitant costs in the expectation Dr Refaat would have to pay them, Dr Refaat could not cause Mr Barry to accrue such costs in the expectation his own liability would be limited.
A matter which suggests that Mr Barry should nevertheless bear some of his own costs of the appeal is the fact that, as Dr Refaat has submitted on numerous occasions, some of the grounds in Mr Barry’s notice of contention were in effect cross-appeal points, a matter which was acknowledged by counsel for Mr Barry at least in respect of one ground at the hearing of the appeal. Although it was ultimately unnecessary to consider the notice of contention, given the Court’s conclusions on the appeal grounds, it may be accepted that some of Mr Barry’s costs were incurred in preparing a notice of contention which in substantial part sought to contest the conclusions of the trial judge rather than to uphold them on different grounds. Those were wasted costs inasmuch as such arguments could not have been made in that way, however valid they may have been.
In addition, and significantly, the Court observed in its substantive reasons that a key reason why the real dispute between Simplex and Mr Barry could not be resolved in this proceeding was that the conduct of Mr Barry’s case at trial had, in substance, frustrated the joinder of Simplex to the proceeding.[19] This was a matter which has already prompted the Court to vary the order as to the costs of the trial,[20] but it is also relevant to the costs of the appeal. Both parties sought to make substantial submissions on the appeal on questions that, properly, were matters between Simplex and Mr Barry. Insofar as the appeal was unable to fully determine those issues in the absence of the proper plaintiff, and some of Dr Refaat’s appeal grounds provided no basis for ordering the relief he sought, part of the responsibility must lie with Mr Barry.
[19]Ibid [98].
[20]Ibid [210]–[211].
In all of the circumstances, we consider that the appropriate order is that Dr Refaat pay 60 per cent of Mr Barry’s costs of the appeal, to be taxed on the standard basis. We would not fix those costs, given the vast disparity between the sums at which the parties contend they should be fixed. The proper avenue for determining Mr Barry’s costs of the appeal, in the absence of agreement, is at a taxation.
Since it appears likely that Dr Refaat’s liability will exceed the $15,000 sum already paid into court, it is appropriate for that sum to remain in court pending a taxation of costs or agreement between the parties as to the amount of the costs.
In reaching our conclusion, we have taken into account the interlocutory disputes heard during the course of the appeal. In some measure, as in obtaining security for costs in the sum of $15,000, Mr Barry was successful. Inasmuch as Mr Barry had sought greater security, or alternatively to restrain Dr Refaat from disposing of the stone cutting machine, Dr Refaat succeeded in resisting those outcomes. Likewise, Mr Barry successfully resisted Dr Refaat’s application to adduce fresh evidence. It was not ultimately necessary to determine Mr Barry’s similar application. In all the circumstances of this proceeding, it is both convenient and appropriate that the costs of those applications be treated as costs in the appeal.
The final matter is Mr Barry’s request for an indemnity certificate under s 4(1) of the Appeal Costs Act 1998. That section provides that if an appeal against a decision of a court in a civil proceeding succeeds, the Court may grant a respondent an indemnity certificate in respect of costs. In this case, the appeal succeeded only in that the trial judge’s costs order was set aside. In circumstances where the relevant submissions occupied very little time on the appeal, it would be inappropriate to exercise the discretion to grant the indemnity certificate sought, and we would not do so.
Orders
For the reasons we have given, we would order that the appellant pay 60 per cent of the respondent’s costs of the appeal, to be taxed on the standard basis.
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