Victorian Legal Services Board v Kuksal (Costs and Amendment Application)
[2024] VSC 48
•19 February 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2022 03994
| VICTORIAN LEGAL SERVICES BOARD | Plaintiff |
| v | |
| SHIVESH KUKSAL & ORS (according to the attached schedule) | Defendants |
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JUDGE: | Gorton J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 February 2024 |
DATE OF RULING: | 19 February 2024 |
CASE MAY BE CITED AS: | Victorian Legal Services Board v Kuksal (Costs and Amendment Application) |
MEDIUM NEUTRAL CITATION: | [2024] VSC 48 |
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COSTS – Where a directions hearing was wasted – Where party brought an application for recusal that failed – Where a party contended that the proceeding had been invalidly commenced – Whether costs should be ordered and if so fixed.
PRACTICE AND PROCEDURE – Amendment – Where party applies to amend to reflect events that have occurred since the proceeding commenced – Where amendment is in improper form but adequately identifies the amendments sought.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms M Norton | Corrs Chambers Westgarth |
| For the First Defendant | Litigant in person | N/A |
| For the Second Defendant | Litigant in person | N/A |
| For the Third Defendant | Litigant in person | N/A |
| For the Fourth Defendant | Litigant in person | N/A |
TABLE OF CONTENTS
A. Introduction.................................................................................................................................. 1
B. Costs of the three hearing dates................................................................................................ 1
B.1The 17 August 2023 hearing................................................................................................. 1
B.2 The 3 November 2023 hearing............................................................................................. 2
B.3The 28 November 2023 hearing........................................................................................... 2
B.4The order for the exchange of written material................................................................ 3
C. Should I make costs order at all?.............................................................................................. 3
D. Costs of 17 August 2023, 28 November 2023,3 November 2023 and the application for costs.......................................................................................................................................................... 6
D.1Should the defendants pay the Board’s costs?................................................................. 6
D.2What amount should be ordered?...................................................................................... 7
D.3The position with Ms Di Gregorio...................................................................................... 8
D.4Disposition as to costs.......................................................................................................... 8
E. The application to amend........................................................................................................... 9
E.1Should it be allowed?............................................................................................................ 9
E.2Costs of the application to amend..................................................................................... 11
F. Disposition................................................................................................................................... 11
HIS HONOUR:
A. Introduction
In this proceeding, the Victorian Legal Services Board (‘the Board’) seeks injunctive relief against Mr Shivesh Kuksal, the first defendant, Mr Peter Ansell, the second defendant, Ms Di Gregorio, the third defendant and Ms Lulu Xu, the fourth defendant. The originating motion as initially filed sought orders preventing the defendants, speaking loosely, from obstructing Howard Rapke in his capacity as manager of a law practice conducted by People Shop Pty Ltd trading as ‘Erudite Legal’ and ‘New Edge Law’, (‘the Law Practice’). On 21 October 2022, Forbes J made an interim injunction against Mr Kuksal, Ms Di Gregorio, and Ms Xu. The interim injunction was not limited to conduct that obstructed Mr Rapke in his capacity as manager of the Law Practice, but extended to preventing those defendants from sending emails or other correspondence that, speaking loosely, associated them with the Law Practice.
The third defendant, Ms Di Gregorio, is no longer participating in the proceeding. On 28 November 2023, I granted the Board leave to discontinue against her with no order as to costs, and set aside the interim injunction insofar as it applied to her.
These reasons concern:
(a) an application by the Board for the costs of hearings that took place before me on 17 August 2023, 3 November 2023, 28 November 2023 and of the application for costs itself; and
(b) an application by the Board for leave to file and serve an amended originating motion by which it alters the final injunctive relief sought.
B. Costs of the three hearing dates
B.1 The 17 August 2023 hearing
The proceeding was listed for directions on 17 August 2023. On that day, the defendants indicated they wished to apply to vary the interim injunction that had been made. The Court informed the defendants that it did not require them to file a summons, made directions for the exchange of material relating to their proposed application, listed the proceeding for mention on a date not before 12 October 2023, and reserved costs.
The defendants did not comply with the directions made that they file and serve the material relied on in support of their application. Accordingly, when the matter returned for mention on 3 November 2023, the matter had not been progressed at all, and it was apparent that the 17 August 2023 directions hearing had been wasted.
B.2 The 3 November 2023 hearing
On 16 October 2023, the defendants advised the registry that they would seek an order that I recuse myself. The registry advised them that they should file and serve a summons and affidavit material in support, and that the application for recusal, and the mention if the application were refused, would be heard on 3 November 2023.
On 3 November 2023, I heard the defendants’ application that I recuse myself. I reserved. On 28 November 2023, I dismissed the application and published reasons for doing so.[1] As those reasons make clear, the defendants did not file adequate material in support of their application in advance of the hearing but presented their argument orally. The hearing of their application took the full day.
B.3 The 28 November 2023 hearing
[1]Victorian Legal Services Board v Kuksal (Recusal Application) (No 2) [2023] VSC 698.
As noted above, on 28 November 2023 I gave my decision in the recusal application.
The Board and Ms Di Gregorio previously conveyed that they would be seeking orders that the proceeding be discontinued against her. Shortly after publishing my reasons, Mr Kuksal indicated that he would oppose the proposed discontinuance against Ms Di Gregorio and applied, again, orally, for an order that I recuse myself. I rejected Mr Kuksal’s argument that the Board should not have leave to discontinue the proceeding against Ms Di Gregorio, and, as noted above, granted that leave. I dismissed his (further) oral application that I recuse myself.
When I hereafter refer to the defendants, I am referring to the first, second and fourth defendants only.
The Board indicated that it would seek to file a further amended summons ‘to reflect developments that have occurred’ since an amended summons was filed on 25 October 2022. I made directions for the filing and service of material in support of, and in response to, that application.
B.4 The order for the exchange of written material
I also made orders for the exchange of material relating to the costs of the hearings on 17 August 2023, 3 November 2023 and 28 November 2023. The Board was ordered to file and serve its material by 15 December 2023, and the defendants were ordered to file and serve their material by 31 January 2024. Mr Kuksal sought to have the matter of costs dealt with after oral argument, rather than on the papers. The matter was then listed for directions on a date not before 31 January 2024. The Court listed the matter on 19 February 2024 for the hearing.
The Board filed its material in support of its application for costs and its application to amend in accordance with the directions made. The defendants did not file any material on or before 31 January 2024, or prior to today, but presented oral submissions. Although they had, clearly, had time to formulate arguments, they stated that they had not had time to prepare material for circulation, as ordered, in advance of today.
C. Should I make costs order at all?
Mr Kuksal submitted that he should not be ordered to pay costs on the grounds that the proceeding was invalidly commenced by the Board because:
(a) It was commenced by originating motion, and the requirement of r 4.05(b) of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’) were not met;
(b) It was commenced by originating motion but was not accompanied by a valid affidavit; and
(c) It was initiated as part of a conspiracy of unlawful conduct directed at him by the Board and Victoria Police and various people in those organisations.
He submitted that the validity of the proceedings, including whether it was initiated as part of a conspiracy of unlawful conduct directed at him by the Board and Victoria Police and various people in those organisations, had to be decided before any costs could be ordered: that I ‘need to first determine whether there is a proceeding’.
The other defendants adopted Mr Kuksal’s submissions.
I do not accept these submissions for a number of reasons.
First, r 4.05(b) provides that a proceeding ‘shall be commenced by originating motion … where by or under any Act an application is authorised to be made to the Court’. The application is expressed to have been brought under s 447(5) of sch 1 to the Legal Profession Uniform Law Application Act 2014. Section 447 provides as follows:
447 Injunctions to restrain contraventions of Law or Uniform Rules
(1) This section applies if a person has contravened, is contravening, or is likely to contravene this Law or the Uniform Rules.
(2) The designated local regulatory authority may apply to the Supreme Court for an injunction.
(3) On application under subsection (2), the Supreme Court may grant an injunction restraining the person from contravening this Law or the Uniform Rules (including by requiring the person to do something).
In those circumstances, I am not satisfied that r 4.05(b) does not authorise the commencement of this proceeding by way of originating motion. More fundamentally, the Rules are the servants, not the masters, of judicial process. The defendants did not identify any prejudice that they have or will suffer by reason of their facing a proceeding commenced by originating motion rather than by writ. The principle practical difference between the two forms of proceeding is that a proceeding commenced by writ has pleadings and a proceeding commenced by originating motion does not. It would be open to the Court to order pleadings even in a proceeding commenced by originating motion. When I enquired of Mr Kuksal, he did not indicate that he would seek pleadings.
Also, and conclusively, r 2.04 gives the Court power to dispense with compliance with any of the requirements of the Rules, whether before or after the occasion for compliance arises, and r 2.02 provides that:
2.02 Originating process
The Court shall not wholly set aside any proceeding or the originating process by which the proceeding was commenced on the ground that the proceeding was commenced by the wrong process.
It follows, too, that if the proceeding were improperly commenced by reason of a failure to file a proper affidavit at the time of issue, as to which I make no finding, that is a matter that could be sorted out other than by ordering that the proceeding be wholly set aside.
I acknowledge that the defendants raised this issue before Forbes J early on in the proceeding, and the issue was not resolved. This fact does not cause me to alter my conclusion expressed above.
I am not in a position, now, to determine whether this proceeding was commenced as a result of an unlawful conspiracy. That, however, is no reason why I ought not now to make costs orders as anticipated in my earlier reasons. The costs under consideration relate to certain court attendances and applications, the expenses of which are not related to the issue of whether the proceeding was commenced for an improper purpose, and are not the costs of the proceeding as a whole.
Ms Xu submitted also that no costs should be ordered because Mr Rapke, whose management of the Law Practice was integral to the proceeding being commenced, is no longer the manager. She was critical of the Board and Mr Rapke for not informing the Court of this fact until recently. She did not suggest, however, that she was unaware of Mr Rapke’s ceasing to be a manager until the Board informed the Court. Mr Kuksal in substance adopted, and emphasised, this argument. I proceed on the assumption that Mr Ansell did too.
In this respect, as noted above, the interim injunction made was not limited to the involvement of Mr Rapke but covered the defendants’ conduct more generally, and the proposed amendments do likewise. Without expressing a view on the obligations on Mr Rapke or the Board to inform the Court, or indeed when they did first inform the Court, I do not accept that their conduct disentitles the Board from any costs to which it would otherwise be entitled for the Court attendances and associated expenses, presently under consideration.
In my view, it is appropriate, and in the interests of justice generally, that I make costs orders as they relate to those identified issues now.
The defendants did not file any material in relation to the quantum of costs sought, and did not address me on that issue.
D. Costs of 17 August 2023, 28 November 2023, 3 November 2023 and the application for costs
D.1 Should the defendants pay the Board’s costs?
In my view, the Board’s costs of preparing for and appearing at the 17 August 2023 directions hearing should be paid by the defendants. It was the defendants’ conduct that caused that day to be wasted. No explanation has been given by the defendants for their conduct. The Board should not be out of pocket by reason of these matters and its costs should be paid on an indemnity basis.
The defendants should also pay the Board’s costs incurred as a consequence of the failed recusal applications. That includes the costs of the Board’s appearance on 3 November 2023. The Board was required to appear on 3 November 2023 if only because it was anticipated that, if the recusal application was able to be disposed of expeditiously, the mention in the proceeding would take place on that day. The Board was also properly entitled, in my view, to listen to the recusal application and to decide whether or not to take a position in relation to it. A recusal application is a serious matter. These costs also include the costs of appearing on 28 November 2023 to receive judgment. The recusal application was, in my view, without merit and would not have been brought by a party properly advised. Further, the defendants did not provide material in advance, despite being required to do so. The Board should not be out of pocket by reason of the failed recusal applications and its costs should be paid on an indemnity basis.
D.2 What amount should be ordered?
I propose to fix costs, so as to avoid the time and expense associated with a taxation.
The Board’s solicitors have filed an affidavit in which it is deposed that (and these figures are exclusive of GST):
(a) 17 August 2023: Their fees were $623.45, and counsel charged $454.54, for the 17 August 2023 hearing. Those figures are half the total amounts charged for that day, because another and related matter was also heard. I am satisfied that these amounts are reasonable and that it is appropriate to fix the Board’s costs for that day in the amount of $1,077.99.
(b) 3 November 2023: Their costs were $2,022.20, and counsel’s fees were $3,272.73, for the 3 November 2023 hearing. As noted above, a recusal application is a serious thing and the Board was entitled to take it seriously including by briefing appropriately experienced junior counsel and by sending an experienced practitioner to instruct at the hearing. This was particularly so given that the defendants had not provided relevant material or submissions in advance. I am satisfied that these amounts are reasonable and that it is appropriate to fix the Board’s costs for that day in the amount of $5,294.93;
(c) 28 November 2023: The Board did not engage counsel for the 28 November 2023 hearing but was represented by their solicitors and their solicitors’ fees were $505.50 for appearing on that day. I am satisfied that this amount is reasonable and that it is appropriate to fix the Board’s costs for that day in the amount of $505.50;
(d) Transcript costs: The Board has paid $1,635.15 for transcript of the 17 August 2023 hearing (of which sum it seeks half, or $817.58), $2,175.85 for transcript of the 3 November 2023 hearing, and $624.96 for transcript the 28 November 2023 hearing. In my view the Board is entitled to obtain transcript of those proceedings, and that its costs of obtaining that transcript should be paid by the defendants. I am satisfied that it is appropriate to order that the defendants also pay to the Board an amount of $3,618.39 representing its disbursements incurred relating to the obtaining of transcript.
(e) Costs of the application for costs: The Board’s solicitors have spent time preparing this application for costs. A lawyer with an hourly rate of $337 has spent 8 hours on the application, a senior associate with an hourly rate of $546 has spent 1.5 hours on the application, and a partner with an hourly rate of $669 has spent 0.5 hours on the application. These come to $3,849.50. The Board has not sought costs associated with the retention of counsel, who prepared a written submission. The application for costs was opposed, and it was reasonable for the Board to anticipate that that would be so opposed. It was appropriate for the Board to prepare an affidavit, and written submissions, in advance of the argument. Preparation of the costs argument would require carefully reviewing the transcript of the various days, carefully reviewing the reasons for ruling that I published, preparing an affidavit in support, and taking all necessary instructions. I am satisfied that the amount referred to is reasonable, particularly given that no amount is being sought for the cost of preparing written submissions, when that cost would ordinarily be claimable.
D.3 The position with Ms Di Gregorio
The Board did not seek costs from Ms Di Gregorio, the third defendant. On 17 August 2023, she informed me that she was not opposing the Board’s application. She did not seek to have the interim order varied. Accordingly, there is no reason to make her responsible for the costs of the 17 August 2023 hearing. She did not join in the application that I recuse myself made on 3 November 2023. Accordingly, there is no reason to make her responsible for the costs associated with that application either.
D.4 Disposition as to costs
I will order that the first, second and fourth defendants pay the plaintiff’s costs of the 17 August 2023, 3 November 2023 and 28 November 2023 hearings, and their application for costs, fixed in the amount of $14,346.31.
E. The application to amend
E.1 Should it be allowed?
The Board applied by summons filed 15 December 2023 to amend its claim. The proposed amendments:
(a) Remove any application for an injunction that the defendants be restrained from obstructing Howard Rapke in his capacity as manager of the law practice conducted by People Shop Pty Ltd trading as ‘Erudite Legal’ and ‘New Edge Law’, because Mr Rapke has ceased to be the manager of the Law Practice;
(b) Maintain the application for an injunction, but for a final injunction, restraining the first, second and fourth defendants (Mr Kuksal, Mr Ansell and Ms Xu) from engaging in certain conduct relating to the Law Practice and vary the form of the injunction sought; and
(c) Add an application for an injunction restraining the second defendant, Mr Ansell, from engaging in legal practice generally while he does not hold a practising certificate.
The Board filed its material in accordance with the directions made. The defendants, again, did not file any material in response by the time required. For the purpose of the application, the Board’s affidavit material established (in the absence of any evidence to the contrary) that:
(a) Mr Ansell has not held a practising certificate since 18 October 2022, but that Mr Ansell has since that date communicated using email addresses associated with the Law Practice and has, on occasions, described himself as a Legal Director of the Law Practice; and
(b) Documents of a legal character have been prepared by the Legal Practice.
The defendants submitted, orally, that they should not pay the plaintiff’s costs of the amendment because:
(a) the Board had not made its application in the appropriate manner, because:
(i) it failed to circulate a proposed amended originating motion, which was what the Court had ordered; and
(ii) it sought leave to amend its summons, rather than to amend the originating motion itself.
(b) their understanding is that there would first be argument about the scope of what amendments would be permitted, and only then would there be argument about the precise document.
The defendants are right that the Board should have prepared and circulated a proposed amended originating motion ‘forthwith’, and its summons should have sought leave to file and serve an amended originating motion in the form circulated. Further, the summons that was filed was headed ‘proposed further amended summons on originating motion’, which makes it read as if it were an application by summons to amend an earlier summons (possibly the summons by which the application for an interim injunction was brought before the Court). So much was acknowledged by the Board in its written submissions, where it stated:
The application to further amend the amended summons dated 25 October 2022 is made on the basis that that document represents the most recent iteration of the relief sought in the proceeding. In the alternative, the plaintiff applies to amend the Originating Motion dated 7 October 2022 to include relief in the terms set out in the proposed further amended summons.
Significantly, however, the summons filed made it sufficiently clear, in my view what the Board was seeking. The summons it filed said the following:
You are summoned to attend before the Court constituted by a Judge of the Court on the hearing of an application by the Plaintiff for judgment or an order in respect of the relief or remedy sought in the originating motion amended as follows:
The summons then set out the amended substantive relief, marked up, that it was to seek in the originating motion.
In those circumstances, I am satisfied that the application sufficiently put the defendants on notice as to the amendments that were being sought, and that the irregularity in the formulation of the application did not occasion the defendants any prejudice.
I am also satisfied, on the material provided, that the proposed amendments raise issues that call for proper evaluation and are not an abuse of process. I will grant leave to the Board to amend its originating motion substantially in accordance with the amendments proposed in its summons filed 15 December 2023.
E.2 Costs of the application to amend
It was appropriate that the Board identify the basis for its proposed amendments and I do not consider that the defendants’ failure to consent is a reason to order the Board, now, to pay the costs of the application to amend.
Equally, the amendments sought arise out of matters that have arisen since the proceeding was commenced. This is not a case where the amendments have come about because of some anterior defect in the drafting. Accordingly, I will order that the costs of the amendment be costs in the proceeding.
F. Disposition
I will order that the first, second and fourth defendants pay the plaintiff’s costs of the 17 August 2023, 3 November 2023 and 28 November 23 hearings, and of the application for costs, fixed in the amount of $14,346.31.
I will give the plaintiff leave to file and serve an amended originating motion substantially in accordance with the amendments proposed in its ‘Proposed further amended summons on originating motion – special procedure’ filed on 15 December 2023.
I will order that the costs of the amendment be costs in the proceeding.
SCHEDULE OF PARTIES
S ECI 2022 03994
| VICTORIAN LEGAL SERVICES BOARD | Plaintiff |
| -and- | |
| SHIVESH KUKSAL | First Defendant |
| PETER ANSELL | Second Defendant |
| MARIA DI GREGORIO | Third Defendant |
| LULU XU | Fourth Defendant |
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