Shaw v Rigby Cooke Lawyers
[2011] VSC 214
•20 May 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 8720 of 2009 and 839 of 2010
| JOHN RASHLEIGH SHAW | Appellant |
| v | |
| RIGBY COOKE LAWYERS | Respondent |
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JUDGE: | SIFRIS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 and 15 April 2011 | |
DATE OF JUDGMENT: | 20 May 2011 | |
CASE MAY BE CITED AS: | Shaw v Rigby Cooke Lawyers | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 214 | |
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ADMINISTRATIVE LAW – Victorian Civil and Administrative Tribunal - Appeal from decision of an Associate Judge refusing leave – Error of law – Relevant consideration – Whether tribunal erred in rejecting appellant’s claims that solicitor acted negligently, in breach of contract and in breach of the Fair Trading Act 1999 – Whether tribunal erred in assessment of loss - Multiple overlapping grounds of appeal - Victorian Civil and Administrative Tribunal Act 1988 s 148 –Legal Profession Act 2004.
ADMINISTRATIVE LAW – Victorian Civil and Administrative Tribunal - Appeal from decision of an Associate Judge refusing leave – Procedural Fairness – Appellant a litigant in person – Whether Tribunal erred in suggesting that respondent bring a new claim under the Fair Trading Act 1999 and permitting new claim to be heard concurrently with proceedings already on foot –Whether other alleged miscellaneous procedural irregularities amounted to error of law.
ADMINISTRATIVE LAW – Victorian Civil and Administrative Tribunal - Appeal and cross appeal against decision granting leave – Costs – Indemnity costs – Whether offer of compromise capable of acceptance – Discretion to order costs where conduct vexatious and untenable claims pursued - Victorian Civil and Administrative Tribunal Act 1988 ss 109 and 112.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr J R Shaw | In person |
| For the Respondent | Mr S Tatarka | Rigby Cooke Lawyers |
HIS HONOUR:
A. Introduction
In February and March 2009, Senior Member Howell of the Victorian Civil and Administrative Tribunal (“Tribunal”) heard three matters in the Legal Practice List between the appellant, John Rashleigh Shaw, and the respondent, Rigby Cooke Lawyers (“Rigby Cooke”).
Before the Tribunal, Mr Shaw made numerous claims against Rigby Cooke, his former solicitors, relating to their management and conduct of a case in this Court (“Yarranova Proceeding”) against property developers, Yarranova Pty Ltd (“Yarranova”) and Newquay (Stage 2) Pty Ltd (“Newquay”). Mr Shaw also disputed the fees charged by Rigby Cooke for work done in relation to the Yarranova Proceeding. In response, Rigby Cooke brought a claim against Mr Shaw for unpaid legal fees.[1]
[1]Rigby Cooke’s claim was initially brought as a counterclaim to Mr Shaw’s action under the Legal Profession Act2004 (Vic), but at the Senior Member’s suggestion it issued a new application under the Fair Trading Act 1999 (Vic). This is one of the matters in respect of which Mr Shaw now complains.
On 5 August 2009, Senior Member Howell dismissed all but two of Mr Shaw’s compensation claims and ordered that Rigby Cooke pay Mr Shaw $6,240.00 in compensation. However, he also ordered that Mr Shaw pay the fees owed to Rigby Cooke and interest thereon, which totalled $38,926.90. After setting off the amount awarded to Mr Shaw, the net amount owing to Rigby Cooke was $32,686.90.
On 6 January 2010, after a further hearing, Senior Member Howell made costs orders against Mr Shaw pursuant to ss 109 and 112 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (“VCAT Act”). He ordered that Mr Shaw pay 55% of Rigby Cooke’s costs of and incidental to the hearing up to 17 December 2008 and 100% of the costs it incurred after 17 December 2008, both calculated on a solicitor and client basis on County Court scale “D”. Senior Member Howell also directed that it was reasonable for Rigby Cooke to engage counsel for the hearing and certified counsel’s fees in the sum of $4,300 per day including GST.
Mr Shaw was dissatisfied with the orders made by Senior Member Howell and sought leave to appeal pursuant to s 148 of the VCAT Act. Daly AsJ refused leave in respect of all grounds of appeal directed to the orders made by the Senior Member on 5 August 2009, but granted leave in respect of a question concerning the costs order made on 6 January 2010. Her Honour delivered extensive reasons for her decision.[2]
[2]John Rashleigh Shaw v Rigby Cooke Lawyers (Unreported, Supreme Court of Victoria, Daly AsJ, 28 October 2010).
Mr Shaw now appeals from the orders of Daly AsJ refusing leave to appeal against the orders made by Senior Member Howell on 5 August 2010. Rigby Cooke cross-appeals against the order of Daly AsJ granting leave on a question of law in respect of the costs orders. Pursuant to rule 77.05 of the Supreme Court (General Civil Procedure) Rules 2005, this is a hearing de novo in respect of both appeals. It is also the hearing of the appeal of the Tribunal’s costs order on the question of law identified by Daly AsJ.
B. Background
The background events giving rise to the present appeal are set out in detail in numerous decisions of the Tribunal and this Court.[3] The following extract from the decision of Williams J in Shaw v Gadens [2010] VSC 7 provides a useful summary of the factual background:
[3]Shaw v Yarranova Pty Ltd [2005] VSC 94, Shaw v Yarranova Pty Ltd [2006] VSC 45, Shaw v Yarranova Pty Ltd (2006) 15 VR 289, Shaw v Yarranova Pty Ltd (No 2) [2007] VSCA 48, Shaw v Rigby Cooke Lawyers (Legal Practice) [2009] VCAT 1604, Shaw v Yarranova Pty Ltd [2009] VSC 380, Shaw v Yarranova Pty Ltd [2009] VSC 490, Shaw v Rigby Cooke Lawyers (Legal Practice) [2010] VCAT 25, Shaw v Gadens Lawyers [2010] VSC 7, Shaw v Yarranova (No. 2) [2010] VSC 125, Shaw v Yarranova Pty Ltd [2010] VSC 567, Shaw v Yarranova Pty Ltd [2011] VSCA 55.
“10On about 12 March 2000, Mr Shaw entered into a contract with a developer, Yarranova Pty Ltd (‘Yarranova’) for the purchase of a unit at Docklands ‘off the plan’ for $665,000. It was anticipated that Yarranova would contract with a builder for the construction of the units.
11On about 13 December 2000, Yarranova appears to have purported to assign the benefit of the contract to Newquay (Stage 2) Pty Ltd (‘Newquay’). Nothing turns on the identity of the vendor of the unit for present purposes.
12Mr Shaw is an engineer and he had certain requirements with regards to the unit’s windows. When the windows did not open, he refused to settle and was served with a rescission notice. Negotiations followed but Mr Shaw was not satisfied that the windows met relevant building code requirements. He again refused to complete the purchase and a second rescission notice was served on 29 September 2003. (There was no issue about the validity or operation of the second notice.)
13Mr Shaw had been represented by a firm of solicitors. Nevertheless, on 2 October 2003, he engaged Gadens to act for him in the dispute with the vendors. The 14 day period under the second rescission notice was due to expire on 14 October 2003.
14A Gadens partner, Mr Lionel Appelboom, wrote a detailed letter of advice to Mr Shaw, dated 8 October 2003. The letter described the legal consequences of rescission and went on to say that:
•the vendor would not be entitled to rescind the contract if the windows did not accord with the relevant building code;
•if the vendor did purport to rescind, Mr Shaw could either accept the termination and seek damages for breach of contract or seek specific performance and damages;
•‘the safest legal option’ would be for Mr Shaw to pay the balance of purchase monies, reserving his rights to claim compensation for breach;
•an injunction would not stop time running under the rescission notice; and
•specific performance should be sought in the Supreme Court because Mr Shaw did not want to settle before the windows complied with the code.
15Mr Appelboom’s letter advised Mr Shaw that he should lodge a caveat to prevent a re-sale and to protect his interest in the property…
16Mr Shaw instructed Gadens to lodge a caveat claiming that he held an interest in the property as purchaser under the contract of sale. The caveat was lodged on 10 October 2003. Meanwhile, Mr Shaw continued to negotiate with the vendor.
17Time under the rescission notice expired on 14 October 2003. Mr Shaw did not pay the balance of purchase monies.
…
18On 28 October 2003, the Registrar of Titles served a notice under s 89A of the Transfer of Land Act 1958, requiring Mr Shaw to commence proceedings within 35 days to justify his caveat in a court of competent jurisdiction. (I note at this point that it is common ground that VCAT is not a ‘court of competent jurisdiction’ under the definition in s4(1) of the Transfer of Law Act 1958.)
19On 1 December 2003, Mr Shaw commenced proceedings in the Court against Yarranova and Newquay…. He sought declarations that the contract of sale gave him the interest claimed in the caveat and that the vendor was not entitled to rescind the contract because the unit had not been completed. After negotiations failed, the defendants issued what was treated by Hollingworth J as an application for summary judgment on their counter-claim. The application was dismissed on 5 April 2005 and the defendants were ordered to pay Mr Shaw’s costs.
20In the meantime, Gadens had ceased to act for Mr Shaw on 4 January 2005. He retained the firm Rigby Cooke in the proceeding some months later [in or around April 2005].
21There was a trial on a preliminary question as to whether the Domestic Building Contracts Act 1995 applied to ‘off the plan’ contracts of sale. On 23 February 2006, Bell J found that the contract of sale was not a ‘domestic building contract’ under the Domestic Building Contracts Act 1995, notwithstanding the application of the legislation to other contracts by VCAT in Bessant v Metro Pacific Pty Ltd and Philp v Mirvac (Docklands) Pty Ltd and by the Court in Mirvac Docklands Pty Ltd v Philp. This meant that the contract had been validly rescinded and that Mr Shaw forfeited his deposit.
22Mr Shaw made an unsuccessful appeal against the decision.” (citations omitted).
In addition to the facts described by Williams J, it is important for present purposes to note that Rigby Cooke ceased acting for Mr Shaw on 15 August 2006, approximately 2 weeks prior to the hearing of the appeal from the decision of Bell J. Mr Shaw retained Coadys to act for him in respect of the appeal. Coadys briefed Mr J D Merralls QC and Mr J A F Twigg of counsel to appear in the Court of Appeal. Mr Merralls QC had been briefed in the matter while Rigby Cooke were retained and had drafted the original Notice of Appeal. As Williams J notes, the appeal was unsuccessful by a decision of 2:1.
In the context of these events, Mr Shaw complained to the Legal Ombudsman about Gadens’ conduct of the Yarranova Proceeding and the matter was referred to the Tribunal. The Tribunal dismissed Mr Shaw’s application and Williams J refused leave to appeal. A further application to the Court of Appeal for leave to appeal against the decision of Williams J was refused.[4] The High Court also refused special leave.[5]
[4]Shaw v Gadens (Unreported, Supreme Court of Victoria Court of Appeal, Ashley JA and Beach AJA, 3 August 2010).
[5]Shaw v Gadens Lawyers [2010] HCASL 281.
In the meantime, Mr Shaw had instituted the claim for compensation and other relief against Rigby Cooke in the Tribunal. The matter was heard by Senior Member Howell.
C. Orders
As noted above, Mr Shaw appeals from the orders made by the Tribunal on 5 August 2009 and 6 January 2010. The 5 August 2009 orders provide that:
“1.This order relates to applications J102 of 2007, C1507 of 2009 and C3826 of 2009.
2.As to application J102 of 2007:
(a)Rigby Cooke is to pay $6,240.00 to Mr. Shaw as compensation;
(b)In all other respects, the application is dismissed.
3.As to application C1507 of 2009:
(a)Mr. Shaw is to pay $38,926.90 to Rigby Cooke, being $29,780.05 for the provision of legal services plus interest thereon of $9,146.85 calculated up to 5 August 2009;
(b)The compensation of $6,240.00 awarded to Mr. Shaw under the previous order is to be offset, thus reducing the amount payable by Mr. Shaw to $32,686.90.
4.As to application C3826 of 2009, the application is dismissed.”
The Tribunal’s order of 6 January 2010 is directed to costs of the proceeding and provides:
“1.The applicant is to pay to the respondent 55% of its costs of and incidental to the final hearing incurred up to and including 17 December 2008, plus 100% of its costs of the proceedings incurred after 17 December 2008, both calculated on a solicitor/client basis on County Court scale “D” with any necessary adaptations. The respondent is to prepare a bill of costs in taxable form. In the absence of agreement as to the amount of the costs, the costs are to be assessed by the Costs Court.
2.The Tribunal certifies that it was reasonable for the respondent to engage counsel. The Tribunal further certifies that the fees of counsel for the respondent incurred in respect of the final hearing, and incurred in respect of this costs application, are to be allowed at $4,300.00 per day inclusive of GST, even if that amount would not be payable if assessed on a solicitor/client basis.”
As already noted, the application for leave from the above orders was heard by Daly AsJ. Her Honour dismissed the application for leave to appeal from the orders made in VCAT proceeding numbers J102/2007, C1507/2009 and C3826/2009 and ordered Mr Shaw to pay costs of the application. Relevantly, her Honour also ordered in S CI 839 of 2010 that:
“1.The Applicant [Mr Shaw] have leave to appeal paragraph 1 of the orders made on 6 January 2010 insofar as the order provides that the Applicant pay more than 55% of the respondent’s costs of and incidental to the final hearing on a solicitor client basis incurred after 17 December 2008 on the following question of law:
‘Whether the jurisdiction of the Tribunal to make orders under section 112(2) of the VCAT Act is enlivened in circumstances where the offer purported to be made under section 112(1)(a) was made in a proceeding where the counterclaim that was extant in the proceeding at the time the offer was made was subsequently dismissed and replaced by an identical claim made in a separate proceeding heard and determined at the same time as the first proceeding’.”
D. Applicable principles
Section 148 of the VCAT Act provides that a party to a proceeding in the Tribunal may appeal to this Court on a “question of law” provided that leave is granted.
The decision to grant leave pursuant to s 148 is discretionary.[6] However, in Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 (“Hulls”) Phillips JA articulated a number of useful guidelines relevant to the decision. His Honour stated:
“When leave is sought to appeal under s 148, it will be necessary for the applicant to identify a question of law which is relevant to the granting of the relief sought on appeal. The importance of the question, either generally or to the would-be appellant in the particular case, will probably be relevant. The applicant must show that there is a real or significant argument to be put on that question of law at least to this extent: that there is sufficient doubt about it to justify the grant of leave. Moreover, it may have to be shown that to allow the error to go uncorrected would impose substantial injustice, although, where the order below is final, that injustice will often be more readily discernible.”[7]
[6]Myers v Medical Practitioners’ Board of Victoria (2007) 18 VR 48 at [30].
[7]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 337.
A number of other guidelines can be discerned from the judgment of Phillips JA and were summarised by Warren CJ (with whom Chernov JA and Bell AJA agreed) in Myers v Medical Practitioners’ Board of Victoria (2007) 18 VR 48 (“Myers”). Her Honour stated:
“•whether leave is granted or not must always depend upon the justice of the particular case;
•if leave is to be granted, the applicant must at least identify a question of law (as distinct from a question of fact) which is important to the substantive appeal’s succeeding or failing;
•the applicant need not establish an error below - that is for the appeal itself. Rather, the applicant will be required to show that there is a real or significant argument to be put that error exists;
•although not essential, the applicant may identify a question of law that is of general or public importance. This will weigh in favour of granting leave;
•once a question of law has been identified which bears directly upon the relief which will be sought in the appeal, and once it has been shown that there is sufficient doubt attending that question to justify the grant of leave to appeal, leave will ordinarily be granted if the order below is a final order or final in its effect; and
•where the order sought to be appealed is an interim order, there may be reasons bearing on the justice done to both parties for not granting leave to appeal, for example, where granting leave to appeal will result in an unnecessary interruption to the substantive proceedings” (citations omitted).[8]
[8]Myers v Medical Practitioners’ Board of Victoria (2007) 18 VR 48 at [28].
Counsel for Rigby Cooke referred me to the decision of Warren CJ in Zygorodimos v The State of Victoria [2004] VSC 143. The principles in that decision are consistent with those expressed in Hulls and Meyers.
E. Summary of Mr Shaw’s claims
Mr Shaw has filed an amended draft notice of appeal dated 11 December 2009[9] (“December 2009 notice”) and a draft notice of appeal dated February 2010 (“February 2010 notice”) (collectively, the “notices of appeal”).
[9]This notice supersedes an earlier draft notice of appeal filed by Mr Shaw on 11 September 2009.
The December 2009 notice, filed in Supreme Court Proceeding No. 8720 of 2009, concerns the order made by Senior Member Howell on 5 August 2009. In that notice, Mr Shaw purports to identify 72 questions of law.
The February 2010 notice, filed in Supreme Court Proceeding No. 839 of 2010, concerns the costs order made by Senior Member Howell on 6 January 2010. It purports to identify 11 questions of law and over 50 grounds of appeal.
One of the difficulties with this matter at each level has been the approach taken, perhaps understandably, by Mr Shaw. Mr Shaw has used the Tribunal and now this Court as a forum for ventilating a wide array of matters and complaints without discrimination. In the case of many of the complaints, no relevant loss was suffered or any loss was de minimus. Further, many of the matters raised are simply not actionable.
The task of identifying questions of law and articulating grounds of appeal can be difficult, particularly for a self-represented litigant. In my opinion, despite Mr Shaw’s best efforts, there is a significant level of generality, lack of precision and overlap and duplication in the matters identified in the notices of appeal. I consider that the real issues raised fall into six broad categories, namely:
(a)Forum of the Yarranova Proceeding – this category covers alleged errors of law in the Tribunal’s reasons for rejecting Mr Shaw’s claim that the Supreme Court was the wrong forum for the hearing of the Yarranova Proceeding.
(b)Conduct of the Yarranova Proceeding – this category covers grounds of appeal concerning the Tribunal’s findings in respect of Mr Shaw’s complaints about Rigby Cooke’s conduct and management of the Yarranova Proceeding and in particular, its alleged decision to abandon four of the five claims made against Yarranova and Newquay (collectively, the “developers”) without consulting him.
(c)Termination of the retainer – this category covers grounds of appeal relating to the Tribunal’s decision on Mr Shaw’s complaint about the timing and circumstances in which Rigby Cooke ceased acting for him.
(d)Procedural irregularities – this category deals with the various complaints Mr Shaw makes about Senior Member Howell’s approach in the hearing against Rigby Cooke and in particular, his decision to allow Rigby Cooke to commence a new proceeding under the Fair Trading Act 1999 (Vic) (“FTA”) after the hearing had commenced.
(e)Miscellaneous issues in respect of the 5 August 2009 orders – this category covers various other grounds of appeal including Mr Shaw’s complaint that the Tribunal failed to provide reasons for various findings and decisions it made and that it incorrectly applied the law in respect of the meaning of “act or omission” in s 4.2.2(2)(b) of the Legal Profession Act 2004 (Vic) (“Legal Profession Act”).
(f)The costs order – this category covers the alleged errors of law regarding the costs order made against Mr Shaw by the Tribunal on 6 January 2010.
I intend to dispose of Mr Shaw’s appeal, Rigby Cooke’s cross-appeal and the hearing of the appeal on the question of law identified by Daly AsJ by reference to each of these categories, rather than dealing specifically with each of the ‘questions of law’ and ‘grounds of appeal’ raised in the notices of appeal. As pointed out, they are imprecise, confusing and overlapping. At my suggestion, the hearing before me was conducted by both parties under the above headings, with particular emphasis on (a), (b) and (d). This was a practical and convenient course and ensured that the hearing was conducted efficiently.
I have reviewed all of the not insubstantial material filed by Mr Shaw and am clearly of the view that leave to appeal should be refused on all issues other than the limited leave given by Daly AsJ pursuant to her order of 5 November 2010 in proceeding no. 839 of 2010. There is simply no real or significant argument to be put in relation to any suggested error of law.
F. Forum of the Yarranova Proceeding
Before the Tribunal, one of Mr Shaw’s primary complaints was that Rigby Cooke incorrectly advised him that the Yarranova Proceeding “could not be transferred to VCAT from the Supreme Court.” [10] This claim formed part of the broader theme that the Supreme Court was an inappropriate forum for hearing the dispute. Mr Shaw contended that the Yarranova Proceeding should have been heard by the Tribunal or alternatively, the litigation should have been abandoned in favour of challenging the validity of the Occupancy Permit (and consequently, the developers’ right to call for settlement) outside of the court system.
[10]Application filed by Mr Shaw with the Tribunal dated 24 May 2007.
The parties agree that Rigby Cooke advised Mr Shaw that he could not have the proceeding “transferred” to the Tribunal. However, there is a dispute about the reasons underlying the advice.
Mr Shaw submits that continuing the Yarranova Proceeding in the Supreme Court was not in his interests and had several adverse consequences. He said that it exposed him to increased costs, both in terms of the costs of his legal representation and the risk of an adverse costs order, which was much less likely before the Tribunal.[11] He said that continuing in the Supreme Court resulted in delay and the Tribunal would have resolved the matter much more quickly. Most significantly, Mr Shaw said his chances of success in the Yarranova Proceeding were lower in the Supreme Court. The Court, unlike the Tribunal, was not bound to follow the earlier decision of Byrne J in Mirvac (Docklands) Pty Ltd v Philp [2004] VSC 301 (“Mirvac case”), in which his Honour held an ‘off the plan’ contract was a domestic building contract within the meaning of the Domestic Building Contracts Act 1995 (Vic) (“DBCA”). Bell J refused to follow the decision of Byrne J and held that an ‘off the plan’ contract was not a ‘major domestic building contract’ within the meaning of the Act.[12] This decision proved fatal to Mr Shaw’s case (at least so far as his lawyers were concerned).
[11]Generally, each party in a proceeding before the Tribunal bears their own costs. See s 109(1) Victorian Civil and Administrative Tribunal Act 1998 (Vic).
[12]Shaw v Yarranova Pty Ltd [2006] VSC 45 at [97].
Despite these arguments, Senior Member Howell was not satisfied that Rigby Cooke was incorrect in advising Mr Shaw that the Yarranova Proceeding could not be transferred to the Tribunal. He noted that there was no legislative procedure for the transfer of a case from the Supreme Court to the Tribunal. Therefore, Mr Shaw would have had to discontinue the proceeding in the Supreme Court and issue a new proceeding in the Tribunal.
As a result of this process, the caveat lodged by Mr Shaw over the title to the unit would have lapsed and the developers would not have been prevented from selling. Mr Shaw would also have had to pay significant legal costs incurred by the developers in defending the proceeding in the Supreme Court. Finally, Senior Member Howell was of the view that the claim before the Tribunal would have been unsuccessful in any case because of the effect of the Domestic Building Contracts (Amendment) Act 2004 (Vic) (“Amending Act”). The legislation, passed in response to the Mirvac case, effectively provided that ‘off the plan’ contracts were not domestic building contracts within the meaning of the DBCA. There was however, an exception for “a contract for the sale of land that is the subject of proceedings commenced in a court or the tribunal before 16 March 2004 but not completed before that date.”[13] The Senior Member held that if the Supreme Court proceedings were discontinued, Mr Shaw would have lost the benefit of this transitional provision and therefore his ‘off the plan’ contract would have been deemed not to be a domestic building contract in any case.
[13]Section 3(4) Domestic Building Contracts (Amendment) Act 2004 (Vic).
Mr Shaw submits that the Senior Member’s decision is affected by several errors of law.[14] He submits, among other things, that the Senior Member erred in:
[14]The questions of law in paragraphs 26, 27, 28, 35, 61, 64, 65, 68, 70, 81 and 82 of Mr Shaw’s December 2009 notice are directed to Senior Member Howell’s decision in regard to the forum issue.
(a)interpreting the Amending Act;
(b)failing to consider the impact of section 57 of the DBCA;
(c)not taking into account Mr Shaw’s prospects of success if the dispute had been heard in the Tribunal;
(d)inferring, in the absence of any evidence, that if the Supreme Court proceeding was abandoned Mr Shaw would have to pay the developers’ costs which would have been significant;
(e)failing to consider the possibility that Mr Shaw could obtain an injunction to protect his interests once the caveat lapsed; and
(f)not dealing with Rigby Cooke’s failure to advise Mr Shaw to challenge the Occupancy Permit.
In my opinion, there is no substance in these grounds. There is no real or significant argument that an error exists in the Senior Member’s decision or reasoning with respect to the forum issue. Contrary to Mr Shaw’s submissions, I do not accept that Rigby Cooke should have advised him to “transfer” the Yarranova Proceeding to the Tribunal or more accurately, discontinue the Supreme Court action and issue a new proceeding in the Tribunal. Gadens Lawyers, not Rigby Cooke, made the decision to issue the Yarranova Proceeding in the Supreme Court. When Rigby Cooke was retained, the proceeding had been on foot for approximately 16 months. If the proceeding was discontinued, Mr Shaw would probably have had to pay the developers’ costs and it is fair to assume that the costs may have been substantial as the proceeding had been on foot for sometime. Perhaps more importantly though, the caveat would have lapsed because it was not supported by proceedings in a Court of competent jurisdiction.
I do not accept Mr Shaw’s argument that his interests could have been protected by applying to the Tribunal for an injunction preventing the developers from selling the unit. Mr Shaw submitted that the Mirvac case provided a precedent which virtually guaranteed that the injunction would be granted. In my view, this is far from clear. Delay is a factor relevant to the decision of whether or not to grant an injunction and here the application would have been made after some 16 months. It is therefore entirely possible that the application would have been refused.
Further, I agree with Senior Member Howell’s interpretation of the Amending Act and in particular, the transitional provision. The language of the section is clear. Section 3 of the Amending Act ensures that the deeming provision does not apply for the purposes of a proceeding which has been commenced prior to 16 March 2004. Contrary to Mr Shaw’s submission, s 3 does not mean that if a proceeding has been commenced prior to 16 March 2004 any future or other proceedings in respect of that contract are not affected by the Amending Act. This is clear also from the second reading speech delivered on 12 May 2004, where the Attorney General stated:
“The bill is declaratory in nature. However, in its media release, the government undertook that any legislation would not apply to contracts the subject of legal proceedings commenced prior to the announcement. This was done as a matter of fairness to the litigants involved in those cases and will allow the courts in those cases to proceed to their own conclusions on the issues” (emphasis added).
If Mr Shaw had discontinued the Supreme Court proceeding any subsequent proceeding issued in the Tribunal would not have been covered by the exception in s 3 of the Amending Act.
Further, in my view, given the importance of the legal issue in question, even if the matter had been heard in the Tribunal and Mr Shaw was successful, the developers would probably have appealed to the Supreme Court and perhaps if necessary, the Court of Appeal. The ultimate outcome would have been the same.
I also refuse to grant leave on the basis that the Tribunal failed to consider Mr Shaw’s argument that Rigby Cooke was negligent in not advising him to challenge the Occupancy Permit. It is true that Senior Member Howell did not consider this claim in any detail in his decision because “a claim of that kind was not included in his [Mr Shaw’s] particulars of claim.” While the Tribunal is not a court of pleadings, this decision does not necessary reveal a real or significant argument to be put on the basis of a question of law. In my view, any error by the Tribunal in not dealing with this matter was inconsequential because Mr Shaw failed to establish that he had a real prospect of challenging the Occupancy Permit.
The Occupancy Permit was issued pursuant to the Building Act 1993 (Vic) (“Building Act”). The Building Act includes a mechanism for varying or cancelling Occupancy Permits. It states:
“70 Amendment of permit or approval
(1)A municipal building surveyor may amend a permit or approval issued under this Part—
(a)on an application by or on behalf of the owner of the building or land concerned; or
(b)in any other case, if the amendment is necessary in the public interest.
…
71Cancellation of permit or approval if fraud or misrepresentation
The relevant building surveyor may cancel a permit or approval issued by the relevant building surveyor under this Part if the permit or approval was obtained by fraud or misrepresentation.
72Cancellation of occupancy permit on other grounds
A municipal building surveyor may cancel an occupancy permit issued under Division 1 if—
(a)the building or the part of a building to which the permit relates is no longer suitable for occupation for the classification stated on the permit; or
(b)the use of the building or part of the building has changed from the use stated on the permit; or
(c)the strength of the building has become less than required to carry the loads stated on the permit.”
It is apparent that s 70 is only available where the public interest is concerned or on the application of an owner of the building or land. Mr Shaw was not the owner of the building (or land) for the purposes of the Building Act as he was not entitled to be the registered proprietor until completion of the contract of sale.[15] There was also no suggestion that an amendment was necessary in the public interest. Mr Shaw did not provide any real evidence to suggest that the Occupancy Permit was obtained by fraud or misrepresentation, therefore s 71 is of no assistance. Finally, he did not provide any evidence to support cancelling the permit on the basis of s 92.
[15]See s 3 of the Building Act 1999.
It should be noted that s 138 of the Building Act makes provision for a person, including someone in Mr Shaw’s position who has entered into an ‘off the plan’ contract, to appeal to the Building Appeals Board in relation to various decisions concerning permits. However, none of the types of decisions giving rise to a right to appeal are relevant in the present case.
Consequently, even if the Tribunal erred in not considering Mr Shaw’s claim that Rigby Cooke was negligent in not advising him to challenge the Occupancy Permit, it is of no consequence as he failed to provide any evidence that his challenge would have been successful.
G. Conduct of the case
General conduct issues
Mr Shaw submitted before the Tribunal that Rigby Cooke’s conduct of the Yarranova Proceeding was negligent and caused him additional, unnecessary expense. The claims which are relevant for the purposes of this appeal include claims that Rigby Cooke:
(a)was consistently late in filing documents and failed to comply with Court timetables resulting in adverse costs orders being made against Mr Shaw;
(b)did not respond to Mr Shaw’s requests for information and acted contrary to his instructions;
(c)failed to keep Mr Shaw informed about the progress of the matter, including the receipt of settlement offers from the developers and the alleged decision to abandon a number of claims;
(d)prepared and submitted an agreed list of facts, without Mr Shaw’s consent, the effect of which was to abandon four of the five claims made by Mr Shaw against the developers;
(e)failed to properly brief an expert witnesses, Mr Raftopoulos, resulting in the trial being adjourned for one day and Mr Shaw being ordered to pay the developers’ costs of that day;
(f)did not appeal an indemnity costs order made against Mr Shaw by Bell J; and
(g)incorrectly advised Mr Shaw the he could not recover the costs which Hollingworth J ordered in his favour at an interlocutory stage until the entire Yarranova Proceeding had been finalised.
The Senior Member rejected many of Mr Shaw’s claims or held that he suffered no loss as a result of Rigby Cooke’s negligent conduct. Mr Shaw’s December 2009 notice challenges these findings on numerous grounds.
I find that there is not sufficient doubt about the Senior Member’s findings relating to Rigby Cooke’s conduct of the case to justify granting leave to appeal. My reasons for reaching this conclusion in respect of each of the more specific categories of conduct are set out briefly below.
Expert witness statements
Mr Shaw was partially successful before the Tribunal in respect of his claim that Rigby Cooke was negligent in the manner in which it briefed its expert witness, Mr Raftopoulos. The Tribunal accepted Mr Shaw’s argument that Rigby Cooke acted negligently by not promptly providing Mr Raftopoulos with copies of expert reports filed in the Yarranova Proceeding on behalf of the developers. The Senior Member found that Rigby Cooke provided the reports to Mr Raftopoulos less than two weeks before the trial was scheduled to start, despite having received the reports some months earlier.
Senior Member Howell found that after reading the statements provided by the developers’ experts and conferring with counsel, Mr Raftopoulos ‘recanted’ from his statement. Rigby Cooke was forced to brief other experts who would provide more favourable evidence and this led to a one day adjournment of the hearing. Mr Shaw was ordered to pay the developers’ costs thrown away for that day.
Despite these findings, Senior Member Howell refused to order that Rigby Cooke pay the costs of the entire day. He reasoned that even if Mr Raftopoulos had been provided with the other reports at an earlier time, there was only a 30% chance that he would have expressed concerns about his own report to Rigby Cooke in enough time to avoid the adjournment. Accordingly, Rigby Cooke was ordered to pay 30% of the costs thrown away.
In his December 2009 notice of appeal and during the hearing of the appeal, Mr Shaw contended that Senior Member Howell’s approach in discounting the award on the basis of the likelihood that Mr Raftopoulos would not have raised concerns about his expert report in enough time to avoid the adjournment was not in accordance with principle, was speculative and was “not based on any reasonable evidence.”
Having reviewed the relevant authorities and the approach taken by Senior Member Howell, I consider that the decision does not reveal any real or significant argument to be put on a question of law. The Tribunal was required to consider whether, if Rigby Cooke had not acted negligently, a particular event would have occurred. This is a hypothetical question. The approach taken required in these circumstances was articulated in Malec v JC Hutton Pty Ltd (1990) 169 CLR 638, where Deane, Gaudron and McHugh JJ stated:
“When liability has been established and a common law court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur, is different from its approach to events which allegedly have occurred…
Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high – 99.9 per cent – or very low – 0.1 per cent. But unless the chance is so low as to be regarded as speculative – say less than 1 per cent – or so high as to be practically certain – say over 99 per cent - the court will take that chance into account in assessing the damages.” (emphasis added)
Consequently, once Senior Member Howell held that Rigby Cooke had been negligent in failing to promptly provide the developers’ expert reports to Mr Raftopoulos, his next task was to value the chance lost by Mr Shaw as a consequence of Rigby Cooke’s negligence. In the present case, Mr Shaw lost the chance that Mr Raftopoulos would contact Rigby Cooke and explain his concerns about his statement in enough time to enable additional expert statements to be prepared and exchanged without the need for an adjournment. This is something that cannot be determined scientifically or with great precision. The Court or Tribunal must make an estimate on the basis of the evidence before it.
I accept, as acknowledged by the Senior Member, that the absence of evidence from Mr Raftopoulos meant there was a lack of evidence about what would have occurred if the developers’ expert reports had been provided earlier. However, Senior Member Howell reached his decision on the basis of other evidence which revealed the length of time counsel met with Mr Raftopolous and the fact that counsel began drafting a supplementary statement. He stated:
“152.These records, and the evidence of Mr. Shaw, Mr. Harrison and Mr. McPhee, lead me to make three findings. The first finding is that the conference on 27 January 2006 dealt solely with the opinions of Mr. Raptopoulos [sic], the contrary opinions expressed by experts engaged by the developer, the fact that Mr. Raptopoulos [sic] recanted from at least one of his opinions, and the course to be adopted because Mr. Raptopoulos [sic] changed his mind.
153.The second finding is that at the conclusion of the conference it remained a possibility that Mr. Raptopoulos [sic] would give evidence on behalf of Mr. Shaw, although his evidence might have required modification to deal with the opinions expressed by experts engaged by the developer. It is significant that Mr. Harrison spent 4½ hours on the matter, including ‘draft expert statement of reply of Raptopoulos’ [sic]. It also is significant that Mr. McPhee spent 1½ hours on the matter. This was not a conference where Mr. Raptopoulos [sic] promptly recanted an opinion, and promptly was discarded as a witness.
154.The third finding is that Mr. Raptopoulos [sic] almost certainly would not have promptly recanted an opinion if he had been provided with the reports of the experts engaged by the developer in November or December 2005 … .”
The Senior Member continued:
“159.… Doing the best I can in the absence of evidence from Mr Raptopoulos, and taking account of the likelihood of an expert in Mr Raptopoulos’ position contacting Rigby Cooke shortly prior to Christmas, I find that there was a 30% chance, or degree of probability, that Mr. Raptopoulos [sic], if provided with the reports promptly, would have expressed concern about his own report to Rigby Cooke in sufficient time to enable Rigby Cooke to confer with Mr. Raptopoulos [sic] well prior to 27 January 2006, allowing sufficient time to find another expert prepared to give favourable evidence, allowing sufficient time to obtain a witness statement from that expert, and enabling the adjournment to be avoided.”
In my opinion, these findings were open to the Senior Member on the basis of the evidence before him and the inferences he drew from the evidence were reasonable. The question is not whether another Tribunal member or a Judge could consider the matter and arrive at a different outcome. Rather, the question is whether the Senior Member’s decision reveals a real or significant argument on a question of law and I find that it does not. Senior Member Howell identified the correct principle and applied it on the basis of the evidence before him.
Mr Shaw’s other complaint in respect of the Senior Member’s findings about witness statements was that:
“The tribunal did not take into account evidence on who prepared the second witness statements and unreasonably concluded that no loss was incurred when invoices clearly show that this work was charged for by counsel.”[16]
[16]December 2009 notice, paragraph 81.
This issue is directed to the Senior Member’s finding that “the adjournment did not lead to an increase in the fees charged by Mr Harrison.” This was a finding of fact and is not open to appeal under s 148 of the VCAT Act. In any case, Mr Shaw has failed to demonstrate that there was not a sufficient basis for the finding. Further, I note that in my view and on the basis of the evidence before me, it is apparent that Rigby Cooke’s negligence in not promptly providing the developers’ expert statements to Mr Raftopoulos did not cause the need for additional witness statements. Rather, it was Mr Raftopoulos’ decision to recant from his earlier statement that necessitated further reports. Mr Shaw would have incurred the cost of counsel preparing the additional witness statements irrespective of Rigby Cooke’s negligence.
Failure to appeal the order for indemnity costs
Senior Member Howell rejected Mr Shaw’s claims that Rigby Cooke was negligent in failing to advise him of the ability to appeal the indemnity costs order made by Bell J and in drafting a notice of appeal which did not challenge that order. Further, Senior Member Howell held that any opportunity lost by Mr Shaw as a result of Rigby Cooke’s failure to advise him to appeal was so slight as to make it speculative. He reasoned that Bell J made the costs order in the exercise of his discretion and since there was no argument that his Honour took irrelevant considerations into account, it was highly unlikely that the Court of Appeal would overturn the order. Further, Senior Member Howell found that Rigby Cooke could claim immunity from suit for its decision not to include the indemnity costs issue in the notice of appeal. Consequently, Mr Shaw’s claim would fail even if Rigby Cooke had been negligent.
In the December 2009 notice of appeal Mr Shaw contends that:
“55.VCAT erred in determining that the appeal of indemnity costs would not have been successful without evidence.
…
69.VCAT erred in attributing testimony to the applicant that was not made and determining that the appeal of indemnity costs would not have been successful based on incorrect conclusions and that the respondents were entitled to claim immunity.”
I accept that there was no evidence elicited during the hearing about Mr Shaw’s prospects of success if he had appealed the indemnity costs order. However, that does not mean that there is a question of law in respect of which leave should be granted. The Senior Member’s conclusion about the prospects of success of appealing the indemnity costs order was correctly based on legal principle. It is well established that “an appellate court will not overturn a judge's decisions on costs unless the judge is seen to have failed to exercise his or her discretion on reasonable grounds or has applied wrong principle or taken a manifestly erroneous view of the facts.”[17] Mr Shaw does not suggest that Bell J erred in any of these ways.
[17]Peet Limited v Richmond [2010] VSCA 71 at [4].
In any event, I accept that Rigby Cooke’s conduct in drawing the grounds of appeal and failing to advise Mr Shaw to appeal the indemnity costs order was covered by the immunity articulated in Giannarelli v Wraith (1988) 165 CLR 543 and D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 (“D’Orta-Ekenaike”). Although this is clearly out-of-court work, it is in my view, “intimately connected” with work in court and involved decisions which affected the conduct of the appeal in Court.
Failure to tax costs promptly
Senior Member Howell held that Rigby Cooke failed to follow instructions by not, between August and October 2005 and between March and August 2006, acting to recover the costs Hollingworth J ordered the defendants to pay to Mr Shaw. Despite this finding, the Senior Member refused to make an order pursuant to s 4.3.17(1) of the Legal Profession Act that Rigby Cooke arrange the taxation free of charge. He also refused to order Rigby Cooke to pay compensation to Mr Shaw for loss of use of the money concerned.
Mr Shaw asserts that Senior Member Howell made a number of appealable errors in reaching this decision. The questions of law he identifies are generally couched in terms of the decision being “unreasonable” and inadequate reasons being given.
I do not accept that there is a real or significant argument justifying the granting of leave to appeal on this point. In the context of a case where Mr Shaw made numerous and varied allegations against Rigby Cooke, the Senior Member’s decision on the taxation point clearly and succinctly sets out his reasoning. He considered that it would be inappropriate to order Rigby Cooke to take whatever action was necessary to tax the costs because of the breakdown that had occurred in the parties’ relationship. He was in the best position to make this determination and his discretion does not appear to have miscarried.
The Senior Member’s decision not to award compensation is also based on clear and identifiable grounds, namely that there was no evidence of the amount of costs involved, Mr Shaw failed to mitigate his loss by arranging a taxation and any costs recovered would most likely have been offset against orders that Mr Shaw pay the developers’ costs. These are findings of fact which are not amenable to appeal under s 148.
Settlement offers
Before the Tribunal, Mr Shaw argued that Rigby Cooke had been negligent in failing to advise him about Calderbank offers made by the developers in the Yarranova Proceeding. Senior Member Howell held that even if Mr Shaw had been advised about the offers, he would not have accepted them and therefore he suffered no loss as a result of Rigby Cooke’s conduct.
Mr Shaw’s December 2009 notice raises a question directed to this issue. However, during the hearing of the application Mr Shaw abandoned this ground. Accordingly, no question of leave arose.
Delay
Before the Tribunal, Mr Shaw was partially successful in respect of his claim that Rigby Cooke was negligent in failing to comply with court timetables. As Senior Member Howell recognised, this complaint was directed towards two matters:
(a)Rigby Cooke’s alleged failure to vacate the trial date for the Yarranova Proceeding without making a formal application; and
(b)Rigby Cooke’s failure to file material relevant to a stay application in the Court of Appeal in a timely fashion.
In both cases, Mr Shaw was ordered to pay the developer’s costs and in Mr Shaw’s submission, this was caused solely by Rigby Cooke’s conduct.
Senior Member Howell held that there was no negligence on the part of Rigby Cooke in respect of the application to vacate the trial date. The date had been fixed before Rigby Cooke was retained and needed to be vacated, as Mr Shaw had sustained serious injuries in a motorbike accident and this impinged upon the trial preparation. Senior Member Howell found that Rigby Cooke endeavoured to avoid the costs of making a formal application to vacate by seeking the developers’ consent and not paying the setting down fee or returning the call over form. This was unsuccessful and a formal application was made. Master Kings (as her Honour then was) made orders vacating the trial, but also ordered Mr Shaw to pay costs. Senior Member Howell held that Rigby Cooke was not negligent in this regard.
Mr Shaw did not expressly challenge this matter in the December 2009 notice. In any case, there is no real or significant argument on a question of law in respect of this issue.
The second issue was Rigby Cooke’s delay in filing material and submissions relevant to an application in the Court of Appeal seeking a stay of the orders made by Bell J. The application was granted, but Mr Shaw was ordered to pay costs on a solicitor and client basis because he had not filed his material until the week of the hearing and his submissions until the day before the hearing. Before the Tribunal, Rigby Cooke accepted that it was responsible for the delay and agreed to pay $2,000 to $3,000 being the difference between the amount of party and party costs which would have been ordered in any case and the solicitor and client costs which the Court of Appeal ordered. Senior Member Howell considered that the difference between the two measures of costs was more likely to be $5,000 and he therefore ordered Rigby Cooke to pay Mr Shaw that amount.
In his December 2009 notice, Mr Shaw’s primary complaint in respect of this matter is that Senior Member Howell did not order that Rigby Cooke pay interest on the $5,000. I do not accept that there is a real or significant argument that the failure to award interest constituted an error of law. There was insufficient evidence before the Tribunal regarding payment of the costs and in particular, the date on which Mr Shaw paid the costs, being the date from which interest began to accrue.
The agreed list of facts
At the commencement of the trial before Bell J, counsel for Mr Shaw, during the course of a discussion with the trial judge, agreed that if his client was unsuccessful on the preliminary point – the applicability of s 42 of the DBCA– this would be fatal to the case as a whole.
In an earlier exchange, counsel conceded that if the DBCA did not apply the common law would apply and given that the defects complained of were not defects in title but defects in quality, the vendor was entitled to rescind the contract and forfeit the deposit.
Mr Shaw lost the s 42 argument. Both Bell J[18] and the Court of Appeal[19] held that s 42 of the DBCA did not apply. The apparent or assumed consequence was that Mr Shaw could not refuse to complete the contract of sale and by so refusing – on the grounds of the applicability of s 42 of the DBCA – the vendor was entitled to rescind the contract of sale.
[18]Shaw v Yarranova Pty Ltd & Anor [2006] VSC 45.
[19]Shaw v Yarranova Pty Ltd & Anor (No 2) [2007] VSCA 48.
Further causes of action pleaded by Mr Shaw, unrelated to and not dependant upon s 42 of the DBCA, were not pursued after determination of the preliminary point and the appeal. Although Mr Shaw complained about the decision to argue the preliminary point and more specifically, the agreed facts directed to the point, he also complained that the preliminary point and the concession that its determination was fatal to the case as a whole, foreclosed on other causes of action and arguments otherwise available to him.
The Senior Member held that although Mr Shaw was not “fully informed … about the likely consequences of failure upon the preliminary point, or that the other claims in the statement of claim would not be pursued if the preliminary point was lost”, the “decisions were made during the course of the trial, and concerned the case to be put on behalf of Mr. Shaw during the trial”. As a consequence, the Senior Member held that Rigby Cooke was entitled to claim immunity from suit in respect of the decisions on the basis of the High Court decision in D’orta-Ekenaike.[20]
[20]D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1.
Mr Shaw contends that D’orta-Ekenaike does not apply and referred me to other authorities. Mr Tatarka of counsel for Rigby Cooke contends that it does apply, but that in any event, there was in effect nothing left to run after the loss of the preliminary point.
If D’orta-Ekenaike applies, the proposed grounds of appeal on this point must fail.
Although the precise ambit of D’orta-Ekenaike – which is itself controversial – remains to be worked out, it is clear authority for the principle that solicitors and counsel are immune from claims relating to “the conduct of a case in court” or “work done out of court which leads to a decision affecting the conduct of the case in court”.[21] The jurisdiction is the public policy ground of finality in litigation. To demonstrate error would require the case to be reopened and re-litigation of the controversy would be inevitable in order to determine whether the error would have made a difference.
[21]D’orta-Ekenaikev Victoria Legal Aid (2005) 223 CLR 1 at [85]-[87] referring to and applying Giannarelli v Wraith (1988) 165 CLR 543.
Mr Shaw contends that in circumstances where claims other than the preliminary point were effectively abandoned, no re-litigation arises as the claims were not litigated in the first place. Mr Tatarka contends that such an argument is too narrow and restrictive and that a decision to effectively abandon a claim is well within the D’orta-Ekenaike principle, as is any decision regarding the preliminary point and statement of agreed facts.
In Francis v Bunnett (2007) 18 VR 98 (“Francis v Bunnett”) the plaintiff claimed that her solicitor was negligent in the context of a settlement of a case before trial. Lasry J declined to stay, dismiss or strike out the case on the defendant solicitor’s application and contention that D’orta-Ekenaike provided immunity, which extended to the settlement of disputes before trial on public policy grounds. In response to a submission that it mattered not whether the dispute was settled before trial or determined by the court and that all that mattered was the fact of a resolution and a requirement to re-open, Lasry J said:
“I am not convinced that principle necessarily flows from the judgment of the High Court in D’orta-Ekenaike.”[22]
[22]Francis v Bunnett (2007) 18 VR 98 at [49].
Lasry J declined to express a concluded view and held that “the claim is [not] so clearly untenable that it cannot possibly succeed”.[23]
[23]Francis v Bunnett (2007) 18 VR at [50].
In MM & R Pty Ltd v Grills & Ors [2007] VSC 528, a decision handed down on the same day as Francis v Bunnett, Cavanough J held that the failure by solicitors to move for the dismissal of an appeal as incompetent (which came on for hearing 13 months after commencement of the appeal) “was ‘intimately connected’ with the conduct of the case in court”.[24] His Honour expressed the view that it was “clear beyond doubt that the advice complained of was advice which led to a decision about how the case should be conducted in court … “[25] However, his Honour did go on to say that “sheer delay or mere inaction” may not be covered by the immunity.[26]
[24]MM & R Pty Ltd v Grills & Ors [2007] VSC 528 at [37].
[25]MM & R Pty Ltd v Grills & Ors [2007] VSC 528 at [37].
[26]MM & R Pty Ltd v Grills & Ors [2007] VSC 528 at [55].
In Chamberlain v Ormsby t/as as Ormsby Flower [2005] NSWCA 454, the New South Wales Court of Appeal[27] held that a barrister was immune from being sued in respect of advice given to a client which led to a settlement of a proceeding. Tobias JA held that:
“It is difficult to imagine a stronger case than the present where the advice given by the barrister led to the appellant’s decision as to the conduct of his case before the Compensation Court or which was more intimately connected with the course of that case including its settlement.”[28]
[27]Per Giles and Tobias JJA (Basten JA dissenting).
[28]Chamberlain v Ormsby t/as as Ormsby Flower [2005] NSWCA 454 at [120].
In Wilson v Rigg [2005] NSWSC 1351 decisions and conduct relating to the preparation and presentation of an application for extension of time were held by Rothman J to be intimately connected with the conduct of the case in court and affected the hearing. His Honour held that:
“It is difficult to imagine out-of-court work more connected with the conduct of the case in court than the determination of the witnesses to be called and the evidence to be adduced from them.”[29]
[29]Wilson v Rigg [2005] NSWSC 1351 at [55].
It is beyond doubt that the decision to embark on the preliminary point and in so doing, to agree on relevant facts, all at the suggestion of the trial judge, was a decision made during the conduct of the case in court. The decision was made during the course of the trial. Accordingly, the solicitors and counsel are entitled to immunity in relation to both the decision to agree to the preliminary point and the statement of agreed facts. Further, so far as may be relevant, I am not persuaded that there was any negligence associated with such a decision which came about because of a suggestion by the trial judge.
It is clear from a review of the transcript of the hearing before the Tribunal and in particular, the evidence of Mr Harrison of counsel and Mr McPhee, a solicitor from Rigby Cooke, that a tactical decision was made on and perhaps after the first day of the trial to run with the preliminary point. As a result of the favourable decision in the Mirvac case, by a judge highly experienced in building cases, the lawyers were extremely confident that they would succeed on the preliminary point. As a consequence this would - from the client’s point of view – be dispositive of the case in the sense that it would effectively defeat the rescission notice and enable the next phase to proceed.
This tactical decision and approach ignored the other pleaded claims, which were considered to be matters relating to defects in quality and not defects in title and consequently, insufficient to defeat the rescission notice, which was the main concern of the client. This tactic involved a conscious and intentional decision not to press or persist with the other claims. The statement of agreed facts (and in particular, paragraphs 23 to 27) was prepared on this basis.
Consequently, I am not persuaded that there is any real or substantial argument that there was any error in the reasoning of the Senior Member.
As part of debating the desirability of the preliminary point, counsel for Mr Shaw made a concession that failure on the preliminary point would be “fatal”. Other than the use of this word in the context of an exchange with the trial judge (and other comments as referred to in relation to the nature of the defects), counsel did not expressly or specifically abandon the other claims pleaded in the statement of claim, although this may have been the assumed effect and consequence of what was said and conceded. It is common ground, as stated by the Senior Member, that “ … the trial came to an end when his Honour found that s. 42 had no application.” Even after the unsuccessful appeal there was no attempt to go beyond the preliminary point and argue the remaining matters as pleaded or reformulated.
In my opinion, to the extent that the use of the word “fatal” conveyed, in the context that it was used (together with the other statements made in relation to defects), a decision or election not to pursue the other causes of action pleaded, it is a statement or relevant conduct engaged in during the course of the trial and in a direct exchange with the trial judge. As such, the statements or concessions are clearly covered by the immunity.
The decision not to continue or endeavour to continue with the case, presumably in some amended or different form following the unsuccessful appeal is a different matter. However, this has not been the subject of any claim or argument.
Accordingly, I am of the opinion that there is no real or significant argument on a question of law in relation to this aspect of the case.
I note briefly that Mr Shaw suggested in his December 2009 notice that “the respondents could have tested the DBCA argument in isolation in the Practice Court at a much earlier time thereby saving the thrown away costs of the affidavits, witness statements and all the preparation costs leading up to the hearing on Feb 2006.” The Tribunal did not expressly deal with this argument, however this cannot constitute a ground of appeal as the point was clearly unarguable. Given the length of the trial before Bell J on the preliminary point, it is apparent that the matter was not suitable to be heard in the Practice Court.
H. Termination of the retainer
The next category of purported questions of law concerns the Tribunal’s finding in respect of the termination of the retainer. Two weeks prior to the hearing of the appeal in the Yarranova Proceeding, Rigby Cooke ceased acting for Mr Shaw. Before the Tribunal, Mr Shaw argued that it was Rigby Cooke that terminated the retainer and that it did so without just cause and without giving him sufficient notice. Mr Shaw submitted that Rigby Cooke’s conduct was unconscionable. He claimed damages for the costs of “re-briefing solicitors and counsel” and also the costs of having to retain Senior Counsel.
Senior Member Howell rejected Mr Shaw’s contention. He found that in April and May 2006 Rigby Cooke were pressing Mr Shaw for payment of legal fees and threatened to cease acting if the bills were not paid. Despite repeated requests for payment and a meeting to discuss the issue, agreement could not be reached and Rigby Cooke ceased acting for Mr Shaw.
Senior Member Howell rejected Mr Shaw’s assertion that he had reached an agreement with Rigby Cooke whereby they would continue acting and he would make part payments of outstanding fees, as and when he could. He found that there was no agreement as to the amount of the instalments or the dates of payments and further, the terms of the agreement were not recorded in writing as he would have expected a solicitor to do.
Mr Shaw contends that Senior Member Howell erred in his decision on the termination of the retainer because in essence, he:
(a)“unreasonably inferred” that it was unlikely that an agreement to pay in instalments had been reached between Rigby Cooke and Mr Shaw when Mr McPhee had given evidence that he would have told Mr Shaw to “pay what you can”;
(b)failed to consider whether Rigby Cooke was estopped from terminating the retainer, after it had represented to Mr Shaw that he should “pay what he can” then continued to act for him despite only receiving part payments;
(c)failed to consider whether Rigby Cooke was estopped from claiming interest on the unpaid accounts after Mr McPhee told Mr Shaw to “pay what you can”, the firm accepted part payments and continued to act on behalf of Mr Shaw;
(d)failed to consider whether it was unreasonable for Rigby Cooke to cease acting 2 weeks prior to the hearing in the Court of Appeal;
(e)failed to adequately consider Mr Shaw’s claim for the costs incurred as a result of having to retain Coadys and Blackstone Legal Costing (Blackstones); and
(f)stated, incorrectly, that particulars of Mr Shaw’s claim in respect of payments made to Coadys and Blackstones had not been provided.
Essentially, Mr Shaw’s complaints boil down to two issues. First, whether he reached some alternative fee arrangement with Rigby Cooke, or whether a Rigby Cooke lawyer represented to him that the firm would continue to act provided he paid what he could of the amounts owing. Secondly, Mr Shaw’s claim for payments made to Coadys and Blackstones.
Senior Member Howell’s decision in respect of the alternative fee agreement or estoppel argument is based on a number of findings of fact. The critical finding that there was no alternative fee arrangement was a finding of fact open on the evidence. Although the Senior Member did not deal with the estoppel argument directly, the same factual matters as those relevant to the suggested alternative fee arrangement would form the basis of any estoppel argument. These findings of fact are not open to challenge. Rigby Cooke was entitled to terminate the retainer and did so. As a consequence, any costs incurred by Mr Shaw as a result of retaining Coadys and Blackstones are not recoverable.
Further, the Senior Member made a finding of fact that terminating the retainer two weeks prior to the appeal did not affect the ultimate outcome of the appeal and it has not been demonstrated that such a finding was not open on the evidence.
I. Procedural irregularities
Mr Shaw contends that the hearing before the Tribunal was attended by a number of procedural irregularities and as a result, he was denied natural justice. The procedural irregularities alleged by Mr Shaw range from general assertions of bias and prejudgment to specific complaints about the ways in which he was restricted in the presentation of his case.
When considering whether a hearing has been conducted in accordance with the rules of natural justice, it is important to keep in mind the forum and the circumstances of the particular case. The Tribunal is clearly required to apply the rules of natural justice.[30] It is not however, bound by the rules of evidence applicable in a court of record and has greater flexibility in terms of procedure, since it is obliged to conduct the proceeding with minimal formality and technicality.[31]
[30]Section 98(1)(a) Victorian Civil and Administrative Tribunal Act 1998 (Vic).
[31]Section 98(1)(b) and (d) Victorian Civil and Administrative Tribunal Act 1998 (Vic).
In Winn v Blueprint Instant Printing Pty Ltd [2002] VSC 295, which was an application for leave to appeal from a decision of the Tribunal on the basis of a denial of natural justice, Byrne J noted:
“It was accepted that the Tribunal must act fairly and that it was bound by the rules of natural justice. But this does not require that its procedures be that of a formal court. Indeed, the Victorian Civil Administrative Tribunal Act 1998…makes it clear that the Tribunal is to act in an informal way and that its procedures must be moulded to accommodate the fact that, in most cases, the parties will not be represented by a professional advocate. This necessarily involves the Tribunal taking a more active role and identifying the real issues between the parties and directing them as to the evidence which legally and logically bears on those issues. It may be, too, that in a given case, the Tribunal will itself interrogate witnesses in a manner and to an extent which would not be expected in a court. This said, s102(1) expressly obliges the Tribunal to afford to the parties a reasonable opportunity to call evidence and to cross-examine witnesses and make submissions. This obligation is, of course, constrained by s 102(2) and by the ordinary requirements of relevance.” (citations omitted) (emphasis added)[32]
[32]Winn v Blueprint Instant Printing Pty Ltd [2002] VSC 295 at [9].
I have reviewed the transcript of the six day hearing before the Tribunal and noted in particular, the numerous passages identified by Mr Shaw in support of his claim that he was denied natural justice. I have also had regard to the list of transcript references identified by counsel for Rigby Cooke.
Many of Mr Shaw’s complaints about the conduct of the hearing before the Tribunal centre on his perception that the Senior Member restricted the way in which he could present his case. It is apparent from the transcript that the Senior Member took a relatively active role in directing the course of the hearing. He clearly attempted to instil some discipline and structure into Mr Shaw’s presentation, including by indicating when facts or arguments had been conceded by Rigby Cooke, suggesting that Mr Shaw move onto a new point when he appeared to have exhausted a particular line of questioning with a particular witness and in some cases, preventing Mr Shaw from giving evidence about matters which had not been raised in his Points of Claim. The Senior Member also refused to accept into evidence the entire ‘correspondence book’ (or Court Book) prepared by Mr Shaw and instead restricted the evidence to documents which either party referred to during the course of the six day hearing. The Tribunal Member also refused to accept individual pages of the transcript of the Yarranova Proceeding that Mr Shaw sought to provide, however in any case, Mr Shaw later sent a complete copy of the transcript to the Senior Member. I consider that it was entirely appropriate for Senior Member Howell to actively manage the hearing in this way, particularly since Mr Shaw was representing himself.
Further, although at times throughout the six day hearing the Senior Member became frustrated with the manner in which Mr Shaw presented his case, in my view, he was generally very lenient and sought to assist Mr Shaw or clarify his position on many occasions. Indeed some of the transcript references provided by Mr Shaw in support of his contention that the Tribunal prejudged the matter, were really instances of Senior Member Howell asking questions to clarify the argument put by each party.
In my opinion, only two of the alleged procedural irregularities raised by Mr Shaw need to be addressed in detail. These are:
(a)Senior Member Howell’s decision, on the third day of the hearing, to allow Rigby Cooke to discontinue its counterclaim based on the Legal Profession Act and issue a new proceeding under the FTA and to hear the new proceeding concurrently with the hearing which was already underway; and
(b)Senior Member Howell’s approach to and decision in respect of Mr Shaw’s application to issue a new proceeding under the FTA.
On the third day of the hearing, Senior Member Howell expressed his concern that Rigby Cooke could not bring its counterclaim for unpaid fees under the Legal Profession Act because the costs exceeded $25,000 and it was therefore not a “costs dispute” within the meaning of the Act. The Senior Member noted that in similar cases, the counterclaim commonly takes the form of an application to the Tribunal under the FTA. Senior Member Howell suggested that Rigby Cooke could discontinue its counterclaim and issue a new proceeding under the FTA, which he would hear concurrently with the existing proceeding.
Mr Shaw objected to this course. He was not familiar with the FTA and said he needed time to examine it and consider new defences of which he could avail himself.
Ordinarily, where a new claim is issued part way through a hearing, it would be appropriate and fair to adjourn the matter to enable the other party to consider its position and prepare a response to the new claims. In Dona Homes (Vic) Pty Ltd v Stevens [2005] VSC 499, Habersberger J noted:
“It is clear that, both before courts and tribunals, a party is entitled to a fair trial at which he, she or it can put his, her or its case properly. It has been held to be a:
‘fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him.’
At its most basic, this involves a party knowing ‘what case it must meet before the hearing commences’. In the words of Gillard J:
‘The statutory right to conduct the proceeding informally ignoring rules of evidence and the practices of [sic] procedures applicable to courts of record, does not entitle the Tribunal to completely ignore the basic principles of natural justice which are designed to give a party affected by a decision the opportunity to be heard after being apprised of the allegations that are put against him and being given a reasonable opportunity to prepare himself.’” (citations omitted)[33]
[33]Dona Homes (Vic) Pty Ltd v James Stevens [2005] VSC 499 at [20]
In that case, Habersberger J held that the Tribunal denied the applicant procedural fairness by continuing without an adjournment after the respondent had introduced new claims. His Honour held that the applicant should have been given the opportunity to investigate the new allegations.
The present case is different. Although Rigby Cooke issued a new proceeding under the FTA, the allegations it made were not new – they had all been made in the counterclaim. The only difference was that instead of the claim essentially being capped at $25,000 as a result of the jurisdictional limit under the Legal Profession Act, Rigby Cooke was now able to claim the entire $29,851.55 of outstanding fees plus interest.
In order to minimise any unfairness to Mr Shaw, Senior Member Howell indicated that he would be willing to receive written submissions from Mr Shaw at a later date, after he had reviewed the FTA. The Senior Member said he may even reconvene the hearing on the basis of matters raised in the submissions (although he noted this was unlikely).
Mr Shaw filed a defence to Rigby Cooke’s FTA claim, which essentially replicated his defence to the counterclaim. He added three additional claims against Rigby Cooke, namely:
(a)that Rigby Cooke should pay the costs charged to Mr Shaw by Coadys and Blackstones;
(b)that Rigby Cooke should pay exemplary damages for “inconvenience, wasted time, anxiety, worry and distress… unconscionable and misleading conduct… loss of enjoyment and enjoyment of apartment…loss of capital gain/investment return of apartment”. The claim was based on sections 8, 9 and 159 of the FTA;
(c)that Rigby Cooke contravened s 12 of the FTA by making a false representation in relation to the provision of legal services, relating to the engagement of Mr Harrison.
Rigby Cooke was capable of and entitled to file a claim under the FTA by completing the claim form and paying the relevant fee at the Tribunal counter, irrespective of the Senior Member’s view of the matter. Consequently, the question is not whether it was improper for Rigby Cooke to file the claim, but rather whether Mr Shaw was denied procedural fairness by the Tribunal suggesting this course to Rigby Cooke and agreeing to hear the claim concurrently.
In my view, it was not unfair for Senior Member Howell to raise this matter with Rigby Cooke. It is not unusual for a Tribunal member or judge to raise concerns about jurisdiction or pleadings with counsel and a discussion about the appropriate approach usually follows. Further, Senior Member Howell was equally active in suggesting to Mr Shaw which issues to focus on in presenting his case.
Further, I consider that there was no practical unfairness in hearing Rigby Cooke’s FTA claim concurrently with Mr Shaw’s claim under the Legal Profession Act. Mr Shaw was aware of the nature of the allegations as they were contained in the counterclaim. Although he was not familiar with the new legislation, as noted above Senior Member Howell gave him an opportunity to make submissions at a later date after he had reviewed the Act. There was also a one month adjournment between the fifth and sixth days of the hearing, which no doubt gave Mr Shaw time to review the FTA.
So far as Mr Shaw’s allegation that the new FTA claim restricted his ability to argue a contravention of s 89 of the Legal Practice Act1996 (Vic) (“Legal Practice Act”), the Senior Member declined to make any findings regarding contravention “partly because the issue was not properly addressed by either party during the present hearing and partly because, even if there was a contravention, the contravention could not lead to the making of an order adverse to Rigby Cooke” (emphasis added). The Senior Member was entitled to decline to decide whether there was a contravention of s 89 because neither party addressed the issue sufficiently and his decision on this basis reveals no error of law.
Further, even if Rigby Cooke’s decision to abandon the counterclaim and issue an FTA claim disadvantaged Mr Shaw in that it prevented him from obtaining relief under s 91 of the Legal Practice Act as a result of a contravention of s 89, leave should not be granted on this point. Any error of law by the Senior Member was inconsequential. As noted above, Rigby Cooke could have issued a new FTA claim irrespective of the Senior Member’s view on the matter and the outcome for Mr Shaw would have been the same.
The next issue is whether, in light of its approach to Rigby Cooke’s FTA claim, the Tribunal failed to accord procedural fairness to Mr Shaw in dealing with his application to bring a further claim. Following the discussion about Rigby Cooke issuing a new proceeding under the FTA, Mr Shaw sought to bring a new proceeding under that same Act. Initially, the Tribunal rejected the application on the basis that it raised various new claims and the quantum of the claim was also increased from $25,000 to $918,401.55. Senior Member Howell accepted the argument by counsel for Rigby Cooke that allowing Mr Shaw to bring this new proceeding at such a late stage would prejudice his client, because Rigby Cooke may have prepared for the hearing in quite a different way if faced with a claim for hundreds of thousands of dollars as compared with a claim for $25,000. Senior Member Howell noted that Mr Shaw was entitled to withdraw his claim under the Legal Profession Act and issue a new proceeding under the FTA but, if he did so, it was likely that he would be ordered to pay Rigby Cooke’s costs on a solicitor and client basis.
On the final day of the hearing however, Rigby Cooke withdrew its opposition to Mr Shaw bringing a new claim under the FTA. Senior Member Howell therefore agreed to allow Mr Shaw to proceed with the new claim on the basis that he would only rely on the evidence already given and agreed to abandon claims against Rigby Cooke in respect of Mr Harrison’s retainer. Consequently, it is unnecessary to determine whether there was any procedural irregularity in the Senior Member’s initial approach to this issue as it did not affect the ultimate outcome. The Tribunal determined Mr Shaw’s FTA claim, including the new claims based on unconscionability, misleading and deceptive conduct and the retainer with Mr Harrison, on the merits.
A question that arises is whether, having advised Mr Shaw during the hearing that he would not entertain a new FTA claim in relation to representations made by Rigby Cooke concerning the engagement of Mr Harrison of counsel, it was unfair of the Senior Member to determine this point as he did in paragraphs 269 – 271 of his reasons. In my opinion, any error of law involved in the Senior Member’s approach was inconsequential and does not justify a grant of leave to appeal. The comment that the Tribunal would not consider this issue was made on the last day of the hearing, after Mr Shaw had cross-examined all the witnesses. It did not affect the way in which he approached that task. Further, Senior Member Howell accepted Mr Shaw’s contention that he and not Rigby Cooke was solely responsible for payment of Mr Shaw’s fees. However, he found that to be “a standard practice” and therefore if the representation was made, it was not false. I consider that Mr Shaw’s claim on this point was sufficiently clear from the written FTA claim he filed with the Tribunal and there was nothing further to be added that would have altered the outcome.
J. Other issues
Mr Shaw raised a number of questions of law concerning the adequacy of Senior Member Howell’s reasons for particular decisions. In my opinion, particularly given the number and breadth of the issues raised by Mr Shaw, the Senior Member’s reasons were sufficient.
Mr Shaw submitted that claims made under s 4.2.2(2)(b) of the Legal Profession Act were in the nature of strict liability claims and that it was not necessary for him to establish any negligence, breach of contract, breach of fiduciary duty or beach of statutory obligation. The Senior Member found that the term “act or omission” had been consistently interpreted as requiring proof of breach of duty of care, contract, fiduciary duty or statutory duty. Nevertheless, he concluded that this did not undermine Mr Shaw’s claim as none of the claims made by Mr Shaw were in the nature of “strict liability” claims. For the reasons given by the Senior Member, the matter is unarguable and no real or significant argument on a question of law has been demonstrated.
Mr Shaw complains that no reasons were given in relation to whether or not there was a “genuine dispute” between him and Rigby Cooke under s 122(1))(c) of the Legal Practice Act. The Tribunal clearly considered that there was a dispute within the meaning of s 122. It treated the matter as falling within sub-paragraph (b) and accordingly, there was no need to deal with sub-paragraph (c), which concerns other “genuine disputes”.
K. Costs
In relation to costs, the Tribunal ordered that Mr Shaw pay 55% of Rigby Cooke’s costs up to and including 17 December 2008 and 100% of its costs after 17 December 2008 on a solicitor and client basis on the County Court Scale D with any necessary adaptations. The reason for 17 December 2008 is that on that day, an offer of compromise (“offer”) was served by Rigby Cooke.
The February 2010 notice identifies numerous errors of law in relation to costs. The complaints concern both the general order under s 109 of the VCAT Act that Mr Shaw pay 55% of costs up to 17 December 2008 and the award of costs based on the offer.
Costs ordered pursuant to s 109 of the VCAT Act
The jurisdiction of the Tribunal to make costs orders is found under Part 4, Division 8 of the VCAT Act. Relevantly, s 109 of the VCAT Act provides:
“(1) Subject to this Division, each party is to bear their own costs in the proceeding.
(2)At any time, the Tribunal may order that a party pay all or a specified part of the costs of another party in a proceeding.
(3)The Tribunal may make an order under subsection (2) only if satisfied that it is fair to do so, having regard to –
(a)whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as –
(i)failing to comply with an order or direction of the Tribunal without reasonable excuse;
(ii)failing to comply with this Act, the regulations, the rules or an enabling enactment;
(iii)asking for an adjournment as a result of (i) or (ii);
(iv)causing an adjournment;
(v)attempting to deceive another party or the Tribunal;
(vi)vexatiously conducting the proceeding;
(b)whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding;
(c)the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;
(d)the nature and complexity of the proceeding;
(e)any other matter the Tribunal considers relevant.”
In summary, the Tribunal found (by reference to a comprehensive table) that Rigby Cooke was entitled to 55% of its costs of and incidental to the final hearing up to and including 17 December 2008 (on a solicitor and client basis) on the basis that Mr Shaw:
(a)conducted the proceeding in a way that unnecessarily disadvantaged Rigby Cooke by vexatiously conducting the proceeding (s 109((3)(a)(vi));
(b)was responsible for prolonging unreasonably the time taken to compete the proceeding (s 109(3)(b); and
(c)pursued claims that had no tenable basis in fact or law (s 109(3)(c)).
In his February 2010 notice, Mr Shaw alleges that this decision is attended by numerous errors of law. Of particular significance are his assertions that the Tribunal:
(a)erred in interpreting the meaning of “tenable basis” and finding that his arguments were untenable;
(b)erred in making an order under s 109 despite failing to properly determine that Mr Shaw conducted the proceeding in a way that unnecessarily disadvantaged Rigby Cooke;
(c)erred in finding that Mr Shaw was responsible for unreasonably prolonging the hearing and conducting it vexatiously;
(d)contravened ss 97, 98 and 102 of the VCAT Act;
(e)erred in unreasonably assuming that a self-represented litigant would have known that particular claims had little or no chance of success; and
(f)failed to give sufficient reasons as to why particular claims were untenable.
Decisions made by a trial judge regarding costs are extremely difficult to overturn. In Semco Developments Pty Ltd v Graham [2005] VSCA 268, the Court of Appeal said:
“An appellate court will not overturn a decision on costs unless the judge failed to exercise his or her discretion, or, in so doing, applied a wrong principle or a manifestly erroneous view of the facts.”[34]
[34]Semco Developments Pty Ltd v Graham [2005] VSCA 268 at [12].
While the provisions of s 109 do offer some guidance as to how the Tribunal’s discretion might be exercised, the weight of authority suggests that the discretion of the Tribunal under s 109 with respect to costs is broad.[35]
[35]Pizer, J., “Pizer’s Annotated VCAT Act” (3rd ed) at [403].
In my opinion, there is no arguable error of law in the Tribunal’s determination to award costs under s 109 of the VCAT Act. The Senior Member identified and applied the correct principles in assessing whether the proceedings were conducted vexatiously, unreasonably prolonged or whether untenable claims were pursued. He found that certain claims made by Mr Shaw (such as his claim based on the Amending Act) were untenable. They clearly were. Further, the Senior Member has made certain findings of fact about Mr Shaw’s conduct of the proceeding, and exercised his discretion accordingly.
The Tribunal was uniquely placed to determine whether Mr Shaw had unreasonably prolonged the proceeding. A review of the transcript is, by necessity, an imperfect position from which to make an assessment as to that issue. In any event, my review of the transcript would not lead me to consider that the position the Tribunal adopted was so unreasonable as to give rise to a real or significant argument on a question of law.
At first glance it may seem harsh to impose an adverse costs order on a self-represented litigant as a result of the manner in which he conducted the case and in particular, the structure in which he presented issues and his failure to appreciate that certain claims had no prospect of success. However, it is clear from the transcript that the Senior Member repeatedly endeavoured to assist and guide Mr Shaw in respect of these matters. Mr Shaw failed to heed the advice.
Further, in my view, there is no basis for Mr Shaw’s allegation that the Tribunal failed to act fairly in contravention of s 97 and did not apply the correct procedure in accordance with ss 98 or 102. The reasons given by the Tribunal in the table in respect of its findings as to whether each claim was untenable, vexatious or unreasonably prolonged the hearing (particularly when read together with its judgment in the substantive proceeding) are also sufficient.
I do not consider that any of the matters raised by Mr Shaw in his February 2010 notice or during the hearing, reveal sufficient doubt about the Tribunal’s decision to order costs under s 109 to justify granting leave to appeal.
Costs ordered pursuant to s 112 of the VCAT Act
The Tribunal ordered further that Mr Shaw pay 100% of Rigby Cooke’s costs incurred after 17 December 2008, on the basis that on that day Rigby Cooke served the offer. The offer stated that it was made pursuant to s 112 of the VCAT Act, and offered to accept $15,000 from Mr Shaw in full and final settlement of all claims and cross claims, including costs.
Section 112 of the VCAT Act provides:
“(1) This section applies if –
(a)a party to a proceeding (other than a proceeding for review of a decision) gives another party an offer in writing to settle the proceeding; and
(b)the other party does not accept the offer within the time the offer is open; and
(c)the offer complies with sections 113 and 114; and
(d)in the opinion of the Tribunal, the orders made by the Tribunal in the proceeding are not more favourable to the other party than the offer.
(2)If this section applies and unless the Tribunal orders otherwise, a party who made an offer referred to in subsection (1)(a) is entitled to an order that the party who did not accept the offer pay all costs incurred by the offering party after the offer was made.
(3)In determining whether its orders are or are not more favourable to a party than an offer, the Tribunal –
(a)must take into account any costs it would have ordered on the date the offer was made; and
(b)must disregard any interest or costs it ordered in respect of any period after the date the offer was received.”
In the proceeding commenced by Rigby Cooke under the FTA, the Tribunal ordered that Mr Shaw pay $32,686.90 to Rigby Cooke. Accordingly, if Mr Shaw had accepted the offer, he would have achieved a better result than he did after the hearing of the substantive proceeding.
The Tribunal found that the offer complied with the requirements of ss 113 and 114 of the VCAT Act, and therefore it was appropriate to make an order pursuant to s 112(2), that Mr Shaw pay “all costs” incurred by Rigby Cooke after the date of the offer. The Tribunal ordered that costs be paid on a solicitor and client basis.
It is necessary to set out the relevant chronology of the various applications in order to understand Mr Shaw’s submission.
On 25 May 2007, Mr Shaw commenced an application (no. J102 of 2007) in the Tribunal against Rigby Cooke. In this application, Mr Shaw made various claims under the Legal Profession Act and claimed compensation in the sum of $25,000 being the maximum amount permitted under the Act. He also sought other remedies.
In the same proceeding, Rigby Cooke made a counterclaim for $29,851.55 in respect of outstanding fees and disbursements for legal services provided in the Yarranova Proceeding. The counterclaim was made on 7 May 2008.
The hearing before VCAT commenced on 9 February 2009. At this stage, the claim and the counterclaim were before the Senior Member.
On the third day of the hearing, namely 11 February 2009, the Senior Member raised with Rigby Cooke’s counsel the issue as to whether VCAT had jurisdiction to hear and determine the counterclaim. The result of the discussion was that Rigby Cooke commenced a separate application under the FTA and the matters (together, with a further application issued by Mr Shaw)[36] were all heard together.
[36]After the new Rigby Cooke application, Mr Shaw commenced his own separate proceeding under the FTA. No longer constrained by the $25,000 limit he claimed $918,401.55.
This course provided Rigby Cooke with a number of advantages. First, it was able to pursue the entire amount of its claim for outstanding legal fees. Secondly, proceeding under the FTA meant that it avoided the potential consequences of any breaches of the disclosure provisions of the Legal Practice Act. Thirdly, its application was in effect “fast tracked” by reason of the Tribunal’s determination to hear the proceedings concurrently.
Mr Shaw submitted that it was not appropriate that his Legal Profession Act proceeding and Rigby Cooke’s later FTA proceeding were treated as one proceeding for the purposes of determining costs. He submitted that it was inappropriate to make a decision regarding the net effect of the two proceedings, in circumstances where when the offer was made, Mr Shaw’s Legal Profession Act proceeding was the only proceeding on foot (with Rigby Cooke’s limited counterclaim).
Section 112(1) refers to a party to “a proceeding”, not “proceedings”. At the time that the offer was made in December 2008, only one proceeding was on foot. In the ruling of 11 February 2009 (and in respect of which written reasons were given on 2 March 2009) the Tribunal determined that it would hear Rigby Cooke’s FTA application concurrently with Mr Shaw’s Legal Profession Act proceeding.[37] However, the proceedings were not consolidated into a single proceeding. As events transpired and unfolded (as referred to above) it could hardly be expected that Mr Shaw should have accepted an offer premised on a valid and proper counterclaim when in fact the counterclaim exceeded the jurisdiction of the Tribunal under the Legal Profession Act and in any event, was abandoned as a consequence. The counterclaim was clearly premised on a valid and enforceable counterclaim in the sum of $29,851.55.
[37]See Shaw v Rigby Cooke [2009] VCAT 319.
For the reasons alluded to by the Senior Member,[38] the counterclaim was not valid and enforceable and it matters not that it was in effect reconstituted or repeated in the new application commenced by Rigby Cooke under the FTA. This was a fresh application that formed the basis of the decision of the Senior Member. In my opinion, it is not proper in this case to use later events, circumstances and proceedings to reflect back on what ought to have been done.
[38]As noted above, the Senior Member ruled that the counterclaim was not valid as it was not a “costs disputes”. See Shaw v Rigby Cooke [2009] VCAT 319 at [6]-[16].
The new application did not in a retrospective sense validate that which was not capable of constituting a valid claim. If the counterclaim was not a valid claim it should be disregarded when assessing the offer, even though its invalidity may not have been appreciated at the time. The inevitable result is that the offer relating to the only application on foot was not for the reasons given, properly or effectively capable of acceptance.
I would allow leave to appeal on this ground[39] and for the reasons given, allow the appeal. As a consequence, the order that Mr Shaw pay 55% of Rigby Cooke’s costs should extend beyond 17 December 2008 and include the entire proceeding.
[39]Given that I have found in favour of Mr Shaw on this point, it is unnecessary to deal with his other complaint about the order under s 112, namely that the Tribunal erred in interpreting “all costs” to mean costs on a solicitor and client basis, rather than a party and party basis. See February 2010 notice, question of law 8.
L. Other grounds of appeal
Finally, I have had regard to and considered all grounds of appeal and questions of law referred to in the notices of appeal. Any matters that have not been specifically referred to in these reasons[40] have nonetheless been considered and to the extent that they purport to raise errors of law, I find that there is no real or significant argument to be put in relation to each of them. There was not sufficient doubt to justify granting leave in respect of such grounds or questions.
[40]I refer in particular to paragraphs 1- 11, 13, 20, 24, 26, 29, 30, 34, 36, 43, 48, 58, 63 and 81 of the December 2009 notice and in respect of the February 2010 notice, questions of law 2, 7, 9, 10 and 11 and grounds of appeal 3, 4-7, 18-20, 21 and 59.
M. Disposition and orders
I propose to make the following orders:
(1)In proceeding SCI 8720 of 2009–
(a)The appellant’s appeal is dismissed.
(b)The appellant pay the respondent’s costs of the appeal.
(2)In proceeding SCI 839 of 2010–
(a)The respondent’s appeal from the orders of Daly AsJ made 5 November 2010 granting leave to appeal is dismissed.
(b)The appeal on the question of law identified by Daly AsJ in the orders made 5 November 2010 be heard instanter and together with the respondent’s appeal against the granting of leave.
(c)The appeal on the question of law identified by Daly AsJ in the orders made 5 November 2010 is allowed.
(d)Order 1 of the orders of the Tribunal made on 6 January 2010 be varied to read as follows:
“1.The applicant is to pay to the respondent 55% of its costs of and incidental to the final hearing, calculated on a solicitor/client basis on County Court scale “D” with any necessary adaptations. The respondent is to prepare a bill of costs in taxable form. In the absence of agreement as to the amount of the costs, the costs are to be assessed by the Costs Court.
(e)The appellant’s appeal from the orders of Daly AsJ made 5 November 2010 refusing leave to appeal (save for in respect of the question of law identified in those orders and referred to in (b) and (c) above) is otherwise dismissed.
(f)There is no order as to costs.
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