Yusof v AAMI
[2016] VSC 518
•9 December 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2016 1006
| BASAM YUSOF | Appellant |
| v | |
| AAI Ltd t/as AAMI | Respondent |
---
JUDGE: | HOLLINGWORTH J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 30 August 2016 |
DATE OF JUDGMENT: | 9 December 2016 |
CASE MAY BE CITED AS: | Yusof v AAMI |
MEDIUM NEUTRAL CITATION: | [2016] VSC 518 |
---
APPEAL – Appeal from Magistrates’ Court – Procedural fairness – Natural justice – Self-represented litigant – Adequacy of reasons – Appeal allowed – Matter remitted for retrial
---
APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Ms N Hassan | Adami Duque Lawyers |
| For the Respondent | Ms S Cherry | Ligeti Partners |
HER HONOUR:
Background
The appellant, Basam Yusof, alleges that a Mercedes Benz car that belonged to him was stolen on 9 May 2013. He made a claim under an insurance policy, which he and his former de facto partner held with the respondent insurer (“AAMI”). AAMI denied the claim.
Mr Yusof issued proceedings in the Magistrates’ Court, seeking the sum of $100,000, which he said was payable under the policy.
In its notice of defence, AAMI did not admit that the car had been stolen. However, it did not make any allegation of fraud against Mr Yusof, it simply required him to prove that there had been a theft. AAMI also denied liability on the basis that Mr Yusof did not cooperate with it, by failing to provide specific information that it requested in order to assess his claim.
The trial was fixed for hearing on 4 November 2015, with an estimated duration of two days. On the first day of the trial, both parties were represented by counsel. Mr Yusof was led through his evidence-in-chief, and his cross-examination began. The matter was adjourned part-heard for a week.
On 11 November 2015, at the start of the second day of trial, Mr Yusof’s counsel was excused from appearing, on the basis that his instructions had been withdrawn. Thereafter, Mr Yusof was unrepresented by solicitors or counsel. Mr Yusof’s cross-examination continued for the whole of that day. At the end of that day’s hearing, the matter was further adjourned part-heard to a date to be fixed.
The trial resumed on 17 February 2016. AAMI’s counsel continued to cross-examine Mr Yusof throughout the day. AAMI’s counsel complained, with some justification, that many of Mr Yusof’s answers continued to be non-responsive or argumentative. Mr Yusof complained, with some justification, about the length and irrelevance of the cross-examination. Mr Yusof became increasingly frustrated, and requested that the magistrate make a decision that day.
How events unfolded thereafter will be discussed in some detail shortly. In summary, the magistrate told Mr Yusof that the only way he could make a decision that day was if Mr Yusof left the court, and the matter was determined in his absence. He told Mr Yusof that he would be able to appeal that decision, if it was adverse to him. He said the only other option was for Mr Yusof to stay and complete his evidence. Mr Yusof said he would leave, and appeal the magistrate’s decision to a jury.
The magistrate did not warn Mr Yusof of the possible costs consequences if he walked away. Nor did he warn him that his appeal rights would be limited to appealing to a judge on an error of law.
After Mr Yusof left the courtroom, the magistrate heard further submissions from AAMI’s counsel, and was persuaded to make orders to the following effect:
(a) Claim dismissed;
(b) Mr Yusof pay AAMI’s costs on an indemnity basis; and
(c) “Adverse finding against credibility” of Mr Yusof.
In the Magistrates’ Court document headed “notice of order made”, the magistrate noted in the “remarks” section: “Plaintiff walked out during cross examination refusing to answer any further questions.” His Honour otherwise gave no written reasons for decision.
In this appeal, Mr Yusof claims that the magistrate:
(a) Adopted a procedure that denied him procedural fairness;
(b) Failed in his duty to assist him, as a self-represented litigant, to receive a fair trial;
(c) Made a number of errors of law; and
(d) Failed to give adequate reasons for dismissing his claim, or ordering indemnity costs against him.
How the hearing proceeded
Mr Yusof was under cross-examination for most of the three days of the trial. He would not have been an easy witness to cross-examine, for a number of reasons.
Even in response to simple, unambiguous questions, Mr Yusof’s answers were often confusing, non-responsive, argumentative, or apparently inconsistent with documentary evidence or his earlier evidence. Over the course of the three days, the magistrate (quite fairly and properly) gave Mr Yusof a number of warnings that he was not coming across as a witness of truth, he should stop being uncooperative or evasive, and stop making speeches.
Mr Yusof gave evidence on the first day of the trial without an interpreter, and appeared to experience no difficulty in understanding and answering questions. He had also declined the offer of an interpreter in his formal interviews with AAMI investigators. After his lawyers withdrew at the start of the second day, Mr Yusof insisted that he wanted an interpreter. After discussing the matter, the magistrate determined that no interpreter was required, and directed Mr Yusof to return to the witness box. Shortly thereafter, the magistrate changed his mind and allowed Mr Yusof to have an Assyrian interpreter, when it became apparent that there was one available immediately. At the start of the third day, there was further debate about whether Mr Yusof needed an interpreter. Although the magistrate continued to express doubts about whether one was really required, he allowed Mr Yusof to use one. It was pointed out to Mr Yusof, on several occasions, that using an interpreter would slow down the pace of the hearing – as it undoubtedly did.
On the first day of the trial, Mr Yusof said he could not read various documents that were put to him. On some occasions, he seemed to be saying it was because he was unable to read at all; elsewhere, it seemed to be because he did not have his reading glasses with him. The magistrate warned him several times to make sure he brought his glasses next time. When the matter resumed on the second day, Mr Yusof had not brought his glasses. The magistrate stood the matter down, so that Mr Yusof could go and buy some reading glasses from the chemist across the road.
At the start of the third day of the trial, Mr Yusof told the magistrate that he had been involved in a fireworks accident on New Year’s Eve, which was affecting his memory. He produced some inconclusive medical evidence to support that. The magistrate clarified with Mr Yusof that he was not suggesting he was incapable of continuing to give evidence that day. Mr Yusof confirmed that he was able to proceed, but asserted that, if the matter dragged on, his memory may decline in the future.
There is no doubt that Mr Yusof’s own conduct contributed substantially to the fact that he was still in the witness box on the third day of the trial. Mr Yusof’s behaviour would have seriously tested the patience of any judicial officer.
That said, Mr Yusof’s frustration at the way the cross-examination was proceeding was also quite understandable. Although a few of the questions asked of him did have issue relevance, most of them seem to have been directed primarily to his credit. By his third day under cross-examination, AAMI’s counsel had not even put to him the allegations of non-cooperation that were at the heart of the defence, and had barely touched upon questions relating to the alleged theft of the car or the insurance policy. It is unsurprising that Mr Yusof frequently protested at the relevance of questions asked of him, and complained about how long the cross-examination was taking. He was clearly becoming increasingly frustrated as the third day wore on.
It is against that rather unfortunate background that the events the subject of this appeal unfolded.
At the start of the third day, AAMI’s counsel described Mr Yusof’s claim as something that was “frivolous and vexatious and ought never to have been brought”.[1] That submission came about because AAMI had found out that, in the period since the last hearing, the car had been located by police, returned to Mr Yusof, and sold by him. In fact, AAMI’s submission was misconceived; the fact that the car had been recovered and sold since the commencement of the proceeding might reduce the quantum of the claim (to the difference between the insured value and the salvage value), but it would not make the claim frivolous and vexatious, or one that ought never have been brought.
[1]T296.
When the hearing resumed after lunch on the third day, the magistrate indicated that he could only keep sitting until 3.30 pm that day. Mr Yusof was then asked a number of questions about a driver’s licence, to which his answers were generally non-responsive or argumentative. When he protested as to the relevance of the questions, the magistrate told him that they went to his credibility as a witness. The magistrate told him the quickest way the case would be over would be if he just answered the questions. That led to the following exchange:
HIS HONOUR: You're directed to answer the questions, Mr Yusof.
INTERPRETER: He's had enough he's saying.
MR YUSOF:That's it, enough, enough.
INTERPRETER: He doesn't want to - - -
HIS HONOUR: What does that mean?
INTERPRETER: He's discontinuing because it's not fair to be asking these questions.
MR YUSOF:(Through Interpreter) Because I don't see any point in. These questions are related to different matters.
HIS HONOUR: Does that mean he's discontinuing his action against AAMI?
MR YUSOF:(Through Interpreter) I am in the witness box, you ask irrelevant questions I will appeal. I need a decision and then I will appeal this decision.[2]
[2]T332-333.
…
HIS HONOUR: So what does he want to do? Does he want to continue?
MR YUSOF:(Through Interpreter) I would like the court to decide on this matter.
HIS HONOUR: I haven't heard all his case yet.
MR YUSOF: And whatever it is I will take the matter somewhere else.
HIS HONOUR: I haven’t heard the defence case. I’m barely through his case. I cannot make a decision until I’ve heard all the evidence.[3]
…
HIS HONOUR: We're going a bit off the rails here. The case is going completely off the rails. I don't know what he wants to do. He's indicating he doesn't want to go on. Is that the case?
MR YUSOF:I would like a decision in this matter. Because enough today, is enough for me. I would like to bring this into another court, Your Honour, to see whether who is on the right track. Even if it takes the jury to deal with the case. I can't see any justice here.
HIS HONOUR: Where do we go now? Is he refusing to give evidence? I don't know.
AAMI’S COUNSEL: Your Honour, my understanding is that he's indicating he wants to continue with the case because he says he wants a decision. Your Honour clearly can't make a decision without hearing all the evidence. My suggestion is that I continue with cross-examination, but if I continue to get answers at the level of obstruction that I have been that's a matter for Your Honour.[4]
[3]T334.
[4]T334-5.
The magistrate then proposed two options to Mr Yusof, and invited him to choose between them - leave the court room and have the matter adjudicated in his absence, or stay and complete his evidence:
HIS HONOUR: (To witness) Mr Yusof, if you don't answer the questions then it's very difficult for me to hear your case, do you understand?
INTERPRETER: He is not going to answer.
HIS HONOUR: Then in which case if you wish to leave the court room and there's no further evidence I suppose you could ask for a summary judgment.
AAMI’S COUNSEL: Absolutely, and indemnity costs, Your Honour.
HIS HONOUR: And then of course he's entitled to appeal.
AAMI’S COUNSEL: And we'll go through it all again.
HIS HONOUR: Indeed.
AAMI’S COUNSEL: And significant further days of evidence that we haven't even touched on yet.
HIS HONOUR: (To witness) Mr Yusof, the only way I can make a decision in this case is if you I suppose walk out of the case. If you walk away from here I can make a decision in this case. If the decision is adverse to you, you can appeal that decision.
AAMI’S COUNSEL: Your Honour, in fairness to Mr Yusof, I think you indicated that the only way you could make a decision would be if he walked out. There is of course also the option of hearing the evidence and making a decision.
HIS HONOUR: Yes, I know. (To witness) Alternatively, you can stay here and complete your evidence?[5]
[5]T335-6.
After Mr Yusof protested about the quality of Australian justice and AAMI’s behaviour, the following exchange occurred:
HIS HONOUR: Mr Yusof, I have to ask you now what you intend to do?
MR YUSOF: Okay, I walk away. You want me to walk, I walk.
HIS HONOUR: No, I’m not asking you to do anything?
MR YUSOF: I walk. … I walk, you make a decision and I go to jury.[6]
[6]T337.
Mr Yusof and the interpreter then left the courtroom.
After the magistrate returned from taking a five minute break, he expressed concern about Mr Yusof’s mental wellbeing, and considered whether an adjournment might be the most appropriate course:
HIS HONOUR: ... My concern is he's clearly - I mean he presented some medical material and he's clearly very emotionally affected by today's hearing. I don't know whether we should just adjourn and you can make submissions. I'll fix it for another date, he can be notified of the next date, and perhaps you can make submissions as to that date. He may present some medical material saying he's unwell today. I don't know where to go with this. It's most unusual the plaintiff walks out of their own case.[7]
[7]T338.
AAMI’s counsel submitted that an adjournment was likely to be unproductive, and repeatedly predicted that Mr Yusof would not answer questions on the next occasion.[8]
[8]T338-9.
The magistrate remained concerned about Mr Yusof’s wellbeing:
HIS HONOUR: My concern is that was only today's hearing. He may have been somewhat evasive on previous occasions but he's never really exhibited this frustration that he has today, which just brings me back to my concern about his mental wellbeing today.[9]
[9]T339.
Unfortunately, his Honour did not follow his initial instinct, which was to adjourn the matter.
Counsel said AAMI was pressing “for a summary dismissal” that day.[10] At no stage did AAMI’s counsel identify (by reference to any statute, rule, case law or otherwise) what the legal basis for the application was. In early parts of the discussion, it appeared that “summary dismissal” was being sought on the basis that Mr Yusof had walked out of court. However, counsel later went on to seek what was described as an “adjudication on the merits” and “a finding as to credit” (based on the fact that it was said that Mr Yusof was “patently not credible”). Although AAMI’s counsel did spend some time attacking Mr Yusof’s credit, there was no attempt to summarise what evidence had been led thus far, or to explain in what way Mr Yusof had failed to prove his case. Given that AAMI had not led any evidence in support of its defence of non-cooperation, AAMI could only have succeeded on an adjudication on the merits by demonstrating some deficiency in the proofs of Mr Yusof’s own case.
[10] T338, 340.
When the magistrate noted that the evidence was incomplete, counsel responded:
He has left and said he doesn’t intend to run the case any further. Effectively the plaintiff has closed his case. The burden of proof is on him and there is, in my submission, no possibility that it is open to the court to find the case proven at this stage so a summary dismissal on the merits is quite appropriate.
In the circumstances I ask for a finding as to credibility.[11]
[11]T341.
That led to the following exchange:
HIS HONOUR: I suppose in those circumstances it's quite clear Mr Yusof has chosen not to further continue in this action, I should dismiss his case. So I do make a summary dismissal order. The question as to costs, do you have itemised costs?
AAMI’S COUNSEL: Your Honour, I don't, and I would ask for an indemnity costs order to be assessed by the Costs Court under Division 7.
HIS HONOUR: So indemnity costs order to be assessed.
AAMI’S COUNSEL: To be assessed if not agreed, which I think is a given.
HIS HONOUR: If not agreed to. I'll make that order.[12]
[12]T341.
AAMI’s counsel then asked the magistrate to make a finding as to Mr Yusof’s credit. The magistrate (quite rightly) queried whether he could do so, not having heard the full case, and in circumstances where “we haven’t even got to the policy, which is what this is all about.”[13]
[13]T342.
AAMI’s counsel pressed on for two pages of transcript, referring to a number of matters, in respect of some of which it was alleged that “an adverse credibility finding” could be made. At the end of those submissions, and without any analysis or reasoning, his Honour simply announced: “I will make such a finding against the credibility of the plaintiff.”[14]
[14]T345.
Relevant legal principles
The parties were not in dispute about the general principles that apply, only as to their application in this case. The following summary of the law is largely taken from counsel’s very helpful written submissions.
Procedural fairness
The fundamental rule of procedural fairness is that a person is entitled to know the case against them, and have an opportunity to respond to it. [15]
[15]Kioa v West (1985) 159 CLR 550 (“Kioa”), 582 (Mason J).
The fundamental importance of ensuring that each party has an equal and proper opportunity to challenge the opposing party’s case is “too obvious to require authority”.[16]
[16]Pamamull v Albrizzi (Sales) Pty Ltd (No 2) [2011] VSCA 260 (“Pamamull”), [100], approving Grusauskis v Deputy Commissioner of Taxation [2005] VSCA 49, [12].
A court must not receive representations from one side behind the back of the other. It does not matter whether the representations so received actually caused prejudice; it is sufficient that there is a risk of prejudice.[17]
[17]Kanda v Government of Malaya [1962] AC 322, 337, referred to by Gibbs CJ in Kioa at 550, 569-570.
Unrepresented litigants
A judge’s overriding duty to ensure that a trial is fair requires a judge to assist an unrepresented litigant.[18] That duty is often onerous.[19]
[18]Tomasevic v Travaglini (2007) 17 VR 100 (“Tomasevic”), [140]-[141]; Trkulja v Markovic [2015] VSCA 298 (“Trkulja”), [32]-[45]; Pamamull, [99]-[103]; Werden v Legal Services Board [2012] VSCA 278 (“Werden”), [53]-[55].
[19]Werden, [53]; Trkulja, [35].
The matters regarding which the judge must assist a self-represented litigant are not limited, for the judge must give such assistance as is necessary to ensure a fair trial.[20]
[20]Tomasevic, [141]; Werden, [54]; Pamamull, [101].
In determining the proper scope of assistance to be offered to a self-represented litigant, the touchstones are fairness and balance.[21]
[21]Tomasevic, [141]; Trkulja, [39]; Pamamull, [101]-[102]; Werden [54].
A judge ought to ensure that the self-represented litigant understands his or her rights so that he or she is not unfairly disadvantaged by being in ignorance of those rights.[22]
[22]Tomasevic, [140]; Trkulja [39]; Pamamull, [102].
However, the proper scope of the assistance depends on the particular litigant, and the nature of the case.[23]
[23]Johnson v Johnson (1997) 22 Fam LR 141.
The court should be astute to see that it does not confer upon a self-represented litigant a positive advantage over the represented opponent. Where a party appears in person, they will ordinarily be at a disadvantage. That does not mean that the court should give the other party less than it is entitled to.[24]
[24]Rajski v Scitec Corporation Pty Ltd (Unreported, NSW Court of Appeal, 16 June 1986).
As the Court of Appeal said in Trkulja:
A failure by a judge to provide the necessary advice and assistance to a self-represented litigant may constitute a denial of procedural fairness and warrant an appellate court setting aside the trial judge’s decision and remitting the matter for a further hearing in accordance with law. It is well established that not every departure from procedural fairness at a trial will entitle the aggrieved party to a new trial. An appellate court will not order a new trial where such a trial would inevitably result in the making of the same order as that made by the trial judge at the first trial. However, where a denial of procedural fairness affects the entitlement of a party to make submissions on a material issue of fact, it is more difficult for an appellate court to conclude that compliance with the requirements of procedural fairness could have made no difference.[25]
[25]At [44].
Adequacy of reasons
A failure to give adequate reasons is an error of law. Reasons are not adequate unless they:
(a) Deal with the substantial points which have been raised;
(b) Include findings on material questions of fact;
(c) Refer to the evidence or other material upon which those findings are based;
(d) When read as a whole, expose a path of reasoning; and
(e)Provide an intelligible explanation of the process of reasoning as to findings on material facts, and the reasoning which led from those findings to the finding as to the ultimate conclusion.[26]
[26]Hunter v Transport Accident Commission [2005] VSCA 1, [21]; Wodonga City Council v Brunswick [2012] VSCA 320, [14].
Reasons are not intelligible if they leave the reader to wonder which of a number of possible routes has been taken to the conclusion expressed. Failure to expose the path of reasoning is an error of law.
The grounds of appeal
The numerous grounds raised in the notice of appeal are divided up by reference to the type of error alleged to have been made: denial of procedural fairness; failure to grant a fair trial; errors of law; and failure to give adequate reasons. That division leads to some degree of factual overlap in the grounds of appeal.
For convenience, I propose to deal with the various grounds under the following headings:
(a) Errors relating to the conduct of the hearing;
(b) Errors relating to the dismissal order; and
(c) Errors relating to the indemnity costs order.
Errors relating to the conduct of the hearing
The magistrate’s “most fundamental obligation” was to ensure that Mr Yusof had a fair hearing, including a fair opportunity to present his case.[27]
[27]Pamamull, [99].
Mr Yusof says that the magistrate failed in that obligation in two ways:
(a) He did not assist Mr Yusof to understand his rights, so that he was not unfairly disadvantaged by being in ignorance of those rights; and
(b) He denied Mr Yusof a proper opportunity to challenge the case against him.
Failure to assist Mr Yusof to understand his rights
There may be scope for argument about how far a judicial officer is required to go in any particular case, in advising a self-represented litigant as to their legal position. But, having chosen to present Mr Yusof with two specific options, at the very least the magistrate had a duty to ensure that the options that he offered were legally open, and were clearly and accurately explained in such a way that they (and their consequences) would be able to be understood by a self-represented litigant in the position of Mr Yusof.
AAMI asserts that Mr Yusof is not a “typical litigant in person”, because he is “an experienced and successful company director”, who had some experience in the Supreme and County Courts. That overstates the position. It is true that Mr Yusof admitted to having once been a director of an unidentified company, which he described as a “very successful company” which “we sold”, but no real details of that matter are known; he was unemployed at the time of the trial. He also made a passing mention of having explained to the Supreme Court and the County Court why he was not prepared to disclose his home address, because of personal threats; but it is not clear whether his interaction with those courts was as a party or a witness, or what type of proceedings were involved. A perusal of the transcript shows him to be an apparently unsophisticated person, for whom English is clearly a second language. Neither his personal history, nor his presentation in court, would suggest he would have been equipped to understand what the magistrate’s unusual first option entailed, or what its possible consequences might be, without any assistance from the magistrate.
Mr Yusof’s behaviour, particularly on the third day, clearly demonstrated that, like many unrepresented litigants, he lacked legal skill, objectivity and an understanding of his rights.
Unfortunately, rather than assist Mr Yusof to overcome those disadvantages, the procedure the magistrate adopted led Mr Yusof to adopt a highly prejudicial course, in ignorance of the prejudice he would suffer. In summary, the magistrate:
(a) Suggested to Mr Yusof that leaving the courtroom and having the matter adjudicated in his absence was an option legally available to him;
(b) Did not explain to Mr Yusof that if he chose that option, it would almost certainly lead to his claim being immediately dismissed;
(c) Did not explain to him the possible costs consequences which that option entailed; and
(d) Allowed him to choose between the two options presented based on an obvious misunderstanding of his appeal rights.
Mr Yusof alleges that each of those matters involved a failure by the magistrate to provide a fair trial.
The available options
The magistrate did not assist Mr Yusof to understand the options legally available to him. His Honour effectively invited Mr Yusof to choose one of two paths:
(a) Leave the hearing and have the matter adjudicated in his absence; or
(b) Stay and complete his evidence.[28]
[28]T336.
The magistrate did not inform Mr Yusof of another legitimate option that was open to him if he did not wish to stay and complete his evidence: namely, that he could discontinue his claim against AAMI, and suffer the inevitable costs consequences.
The second of the two options presented to Mr Yusof was clearly a legitimate option. However, the first option was problematic, for several reasons. The first option was ambiguous and liable to mislead a self-represented litigant. The magistrate did not indicate on what legal basis the matter might be adjudicated in Mr Yusof’s absence – whether it would be decided on the evidence led thus far; whether AAMI would be permitted to lead further evidence and make submissions in his absence; or whether it would be decided against him summarily, without having regard to the evidence.
His Honour also did not explain to Mr Yusof that if he left without completing his evidence, it was almost inevitable that he would lose his claim. On the contrary, in making statements such as “if the decision is adverse to you, you can appeal the decision”,[29] the magistrate may have given the impression that there was a possibility that the case could be decided in Mr Yusof’s favour, even if he chose to leave.
[29]T336.
Nor did his Honour indicate what the likely or possible costs or appeal consequences of the two options would be.
AAMI argues that there was no “invitation” to Mr Yusof to leave; rather, he elected to do so, having been told that if he stayed the magistrate would continue to direct him to answer questions. It is true that Mr Yusof was unhappy with the way that cross-examination was going, and the time the case was taking. But he could not make a fair election between the two options presented to him, unless he was properly informed as to what all his options really were (including their possible consequences).
Costs consequences
The magistrate did not assist Mr Yusof to understand the possible costs consequences of leaving the courtroom without completing his evidence. His Honour did not mention that costs would almost certainly be awarded against Mr Yusof if he left the courtroom, far less did he make any mention of a possible indemnity costs order.
Before Mr Yusof left the hearing, AAMI’s counsel had mentioned indemnity costs three times. Two of those mentions occurred at the start of the third day, in the context of the discussion about the fact that the car had now been recovered and sold.[30] However, that particular issue was no longer being discussed after lunch. The only time indemnity costs were mentioned that afternoon was in the course of the comment by the magistrate to AAMI’s counsel that if Mr Yusof chose to leave the court room, he supposed that AAMI “could ask for a summary judgment”, to which AAMI’s counsel replied “Absolutely, and indemnity costs.”[31]
[30]T295-6.
[31]T335-336.
At no time did the magistrate explain to Mr Yusof: what the term “indemnity costs” meant; in what circumstances they could be ordered; whether he was likely to order them if Mr Yusof chose the first option; or that they were likely to be very substantial.[32]
[32]AAMI claims indemnity costs of $52,000.
Mr Yusof had given the magistrate no reason to believe that he understood the concept of indemnity costs, or that the magistrate might order Mr Yusof to pay them if he chose the first option.
In paragraph 20 of his affidavit of 26 May 2016, filed in this appeal, Mr Yusof deposed that:
At the time of the hearing, I did not understand the term ‘indemnity costs’. I have now been advised that it means I have to pay all of [AAMI’s] legal costs rather than a proportion of its costs based on the court scale. At the time, I did not know that if I left the hearing, I would be ordered to pay all of [AAMI’s] legal costs, or that I could be ordered to pay such a large amount of costs. If the magistrate had warned me that if I left he would order me to pay indemnity costs and that it could be such a large amount of money, I would not have left the hearing.
AAMI’s counsel did not seek to challenge that evidence by cross-examination. Instead, in its written submissions, AAMI argued that:
[I]t is disingenuous to suggest that Mr Yusof might not have understood the nature of the various costs orders available, including an order for indemnity costs. Mr Yusof was present and instructing throughout interlocutory processes in this matter, in which indemnity costs were discussed at length by his own former counsel.
However, AAMI led no evidence in support of that submission. When I pressed for further details of it in oral submissions, AAMI’s counsel was unable to provide any.
Accordingly, Mr Yusof’s evidence as to the state of his knowledge of indemnity costs, and what he would have done had the magistrate provided a proper explanation as to indemnity costs, stands unchallenged.
Appeal rights
The magistrate did not assist Mr Yusof to understand his appeal rights. On the contrary, he seemed to confirm Mr Yusof’s clearly incorrect understanding of them.
Earlier on the third day, Mr Yusof had expressed an intention to have the matter heard by “a higher court” if it was not finalised that day.[33]
[33]T291.
Several times during the course of the afternoon, Mr Yusof expressed an intention not only to appeal, but to have his appeal heard by a jury.
It should have been evident to the magistrate that Mr Yusof wrongly believed not only that he had a right to have the matter reheard by a higher court on the merits, but also that he believed he could have the matter heard by a jury. It must also have been evident that this mistaken belief in an appeal right was a major factor informing Mr Yusof’s decision to seek an immediate adjudication without completing his evidence.
Not only did the magistrate fail to correct that misunderstanding, his Honour twice appeared to confirm that it was correct:
(a) First, his Honour’s exchange with AAMI’s counsel suggested that any appeal would involve a rehearing of the evidence, in which they would “go through it all again”, and further evidence would be called;[34] and
(b) Secondly, the magistrate directly told Mr Yusof that he could appeal, without informing of the important limitation that the appeal would not involve a rehearing of the merits. His Honour said that ”If you walk away from here I can make a decision in this case. If the decision is adverse to you, you can appeal that decision.”[35]
[34]T335-6.
[35]T336.
In circumstances where Mr Yusof apparently believed that he could appeal to a jury, it was misleading for the magistrate to simply tell him that he could appeal if the decision was adverse. An appeal to a jury would never be available. Nor would an adverse decision necessarily entitle Mr Yusof to appeal to a judge, because an appeal would only be available on a question of law.[36] To omit that qualification was likely to mislead, in the circumstances.
[36] Magistrates’ Court Act 1989, s 109.
AAMI asserts that what the magistrate told Mr Yusof was accurate, because Mr Yusof did have a right to appeal, which he has exercised by coming to the Supreme Court. AAMI says that whether or not such an appeal might succeed is an entirely different question, on which the magistrate properly expressed no view. AAMI’s response completely misses the point of Mr Yusof’s complaint. His complaint is that he was misled as to the fundamental nature of his appeal rights. Furthermore, his evidence in the affidavit filed in this court – that the availability of an appeal on the merits was a key factor influencing his decision to leave – was unchallenged.
Disadvantage flowing from those failures
The magistrate‘s failure to assist Mr Yusof to understand his rights has resulted in him being severely and unfairly disadvantaged in the following ways:
(a) Mr Yusof’s failure to understand his legal options caused him to choose a path that resulted in AAMI making a summary order application in his absence, and without an opportunity for him to contradict its submissions. That path was highly likely to (and did) lead to the immediate dismissal of his claim;
(b) Mr Yusof’s failure to understand the costs consequences of the options presented to him influenced his decision to leave the courtroom, and caused him to incur significant financial liability, in addition to his claimed loss; and
(c) Mr Yusof’s failure to understand his limited appeal rights led him to unwittingly abandon his only opportunity to lead all his evidence and have an adjudication on the merits.
Conclusion
I agree that the magistrate failed in his duty to assist Mr Yusof, as a self-represented litigant, to receive a fair trial, in the ways discussed above. It would not have been difficult, or onerous, for the magistrate to have explained Mr Yusof’s options to him clearly and accurately, and in such a way that they (and their consequences) would have been able to be understood by Mr Yusof. To have given such an explanation would not have involved giving Mr Yusof a positive advantage over AAMI, or being unfair to AAMI. It would simply have enabled Mr Yusof to make an informed choice, once he understood what his rights were.
Other procedural fairness issues
Mr Yusof also says that what happened on the afternoon of the third day denied him a fair opportunity to challenge the case against him, which struck at the core requirement of procedural fairness.
Mr Yusof did not storm out of the courtroom of his own motion, leaving the magistrate and AAMI to do whatever they wanted with his case. He did not suggest that the case continue without him. It is true that Mr Yusof was continuing to be a very difficult and frustrating witness, and was objecting or refusing to answer some of the questions; he was also insisting that he wanted a decision that day. But it was the magistrate who invited Mr Yusof to either leave and have a decision made that day, or stay and complete his evidence. The unchallenged evidence is that had the magistrate not made that suggestion, Mr Yusof would not have left.[37]
[37]Further affidavit of Basam Yusof dated 26 May 2016, [14].
Mr Yusof complains that the magistrate should not have proposed or adopted the first option, as it was not consistent with the requirements of procedural fairness. That is because he says the first option would necessarily involve:
(a) AAMI making significant submissions in Mr Yusof’s absence on the issues of summary dismissal and credibility, and Mr Yusof having no opportunity to hear those submissions or respond to them; and
(b) Mr Yusof having no real opportunity to be heard on whether an indemnity costs order ought be made.
I am not persuaded that merely proposing the first option would necessarily involve procedural unfairness. For example, had the magistrate fully explained that if Mr Yusof chose to leave he would continue to hear submissions and evidence about particular matters, and might make certain orders against Mr Yusof in his absence, Mr Yusof could have made an informed decision about what he wished to do. Had he then made an informed decision to leave, the continuation of the hearing in his absence would not necessarily have involved any procedural unfairness.
The problem with what happened here is that because the magistrate did not provide the appropriate information, Mr Yusof made an uninformed decision to leave.
Mr Yusof points out that after he left, the magistrate received submissions from AAMI in his absence. I accept that he did so, and that those submissions appear to have persuaded the magistrate to change his mind in two important respects, and to make the orders which he ultimately made:
(a) First, on the issue of whether to dismiss the claim, the magistrate twice expressed concern about finally determining the matter that day, given his concerns about Mr Yusof’s mental state. But he was ultimately persuaded to go ahead, by the persistence of AAMI’s counsel; and
(b) On the issue of whether to make an “adverse credibility finding”, the magistrate expressed the initial view that such a finding would not be appropriate in the circumstances. Once again, he was persuaded to change his mind by persistent submissions by AAMI’s counsel.
Given that Mr Yusof wanted his matter determined that day, and left the court thinking that would occur, it is difficult to see how he can now complain that AAMI’s counsel persuaded the magistrate in his absence to determine the matter that day.
The position is more complicated in relation to AAMI’s submissions about Mr Yusof’s credibility. On each day of the trial, the magistrate had clearly informed Mr Yusof that his credibility was under attack; he can have been under no illusion that that was the case. For AAMI to have continued that attack once Mr Yusof had left was unsurprising. As will be discussed shortly, the real problem here is that it is not clear what, if any, role Mr Yusof’s credibility played in the magistrate’s decision to order summary dismissal or indemnity costs.
Mr Yusof’s own conduct
It is no answer to the procedural unfairness findings to say that Mr Yusof brought his misfortune upon himself. I accept that the magistrate was in a very difficult situation. That is not unusual in the case of a self-represented litigant, particularly one whose behaviour as a witness and a litigant was as challenging as Mr Yusof’s. But that did not absolve the magistrate of the duty to ensure a fair trial. Courts have repeatedly emphasised the importance of procedural fairness, even in the face of unreasonable behaviour by the parties (especially self-represented litigants) or their lawyers.[38]
[38]See for example: AJH Lawyers Pty Ltd v Careri [2011] VSCA 425; Pamamull, op cit; Finch v Arnold Thomas and Becker Pty Ltd [2016] VSCA 117;
There is little to be gained in analysing the strength or weakness of Mr Yusof’s case against AAMI. A denial of procedural fairness can only be overlooked if it could not have had any bearing on the outcome.
Had the magistrate not presented Mr Yusof with the option of leaving the hearing to have it adjudicated in his absence (and with a mistaken apprehension of his appeal rights and possible costs consequences), Mr Yusof would have continued on. Without hearing the entirety of the evidence, it is impossible for me to say that it was inevitable that his claim would be dismissed.
Had Mr Yusof had the opportunity to hear and respond to AAMI’s submissions, it is possible that those submissions would not have been accepted. Given the magistrate’s initial reluctance to grant the orders sought, it is simply impossible to say that submissions on his part could not have made any difference, or that the result was inevitable.
Had Mr Yusof understood the grave consequences of the options the magistrate presented to him, and his very limited appeal rights, it is unlikely that he would have gone down the path that he did. It is possible, if not likely, that he would have stayed to complete the hearing. Given the early stage of the evidence in relation to the issues in dispute, it is not possible say that it was doomed to fail.
Errors relating to the dismissal order
Adequacy of the reasons for summary dismissal
As mentioned earlier, the only oral reasons given by the magistrate for making the “summary dismissal” order were that “it's quite clear Mr Yusof has chosen not to further continue in this action, I should dismiss his case. So I do make a summary dismissal order.” Even if (as AAMI’s counsel suggested) I also treat the remarks in the “notice of order made” document (about Mr Yusof having walked out during cross-examination and refused to answer questions) as part of the reasons, they add little by way of explanation or clarification of the oral reasons.
It is not clear what the magistrate meant by a “summary dismissal” order. The use of the expression “summary dismissal” would generally suggest a decision made without adjudication on the evidence. However, the fact that his Honour thereafter made an “adverse credibility finding” seems to conflict with the idea of a summary adjudication.
The magistrate gave no indication of the power he purported to exercise, or the test he purported to apply in the exercise of that power. Nor had AAMI’s counsel identified on what legal basis AAMI was seeking “summary dismissal”.
The expression “summary stay or dismissal” does appear in the heading to Order 23 of the Magistrates’ Court General Civil Procedure Rules 2010 (“the Rules”). Rule 23.01(1) permits the court to give judgment for the defendant in relation to a claim that is scandalous, frivolous or vexatious, or an abuse of process. At no stage did the magistrate refer to any of those tests, or perform any analysis that might be referrable to any of those tests.
As mentioned earlier, at the start of the third day AAMI’s counsel had described Mr Yusof’s claim as something that was “frivolous and vexatious and ought never to have been brought”.[39] That erroneous submission had been made in the context of the discussion about the fact that the car had been recovered. If his Honour agreed with AAMI’s submission, he did not say so. In particular, he said nothing to suggest that his decision to order summary dismissal in the afternoon was in any way connected with the recovery of the car. Nor did he identify any other weakness in the claim, or any matter that might have made it frivolous or vexatious.
[39]T296.
Although the magistrate did, on one early occasion, use the term “summary judgment”[40] (perhaps suggesting a reliance on order 22 of the Rules and/or s 62 of the Civil Procedure Act 2010), thereafter, both he and AAMI’s counsel consistently used the term “summary dismissal”. It is unlikely that his Honour thought he was proceeding under the summary judgment provisions, as such applications must be made prior to trial, on notice by summons, and be supported by affidavit evidence. In any event (and leaving aside the procedural irregularity of ordering summary judgment on an oral application made at trial), his Honour did not purport to apply the “no real prospect of success” test that is applicable in an application under order 22 and s 63, nor identify why the evidence led thus far gave Mr Yusof no real prospect of success.
[40]T335.
At one stage, AAMI’s counsel had submitted that “summary dismissal on the merits” was available, because Mr Yusof had “effectively closed his case”, and there was “no possibility that it is open to the court to find the case proven”.[41] If the magistrate was deciding the case on its merits, his Honour did not say so. He did not purport to apply any test applicable to a “no case” submission, or evaluate the sufficiency of the evidence.
[41]T346-347.
On appeal, AAMI argues that the source of the magistrate’s summary dismissal power was the power to dismiss for want of prosecution under r 24.01 of the Rules. At no stage did AAMI’s counsel or the magistrate refer to r 24.01, or use the phrase “dismiss for want of prosecution”. AAMI submits that the magistrate’s remark that “it’s quite clear that Mr Yusof has chosen not to further continue in his action,” indicates that the power that was being exercised was indeed the power to dismiss for want of prosecution. However, his Honour made that remark immediately after AAMI’s counsel had submitted that Mr Yusof had closed his case, and the court should order “summary dismissal on the merits” and make a finding as to credibility. That is to say, the magistrate’s remark was completely unresponsive to what he had just been asked to do.
Although the power to dismiss for want of prosecution under r 24.01 is an unfettered discretionary power, such an order will usually only be made where the interests of justice require it. There was no discussion by AAMI’s counsel or the magistrate of any of the sorts of matters that courts generally consider in the exercise of that discretion: for example, factors such as inordinate and inexcusable delay, intentional default in compliance with court orders, or prejudice to the defendant caused by the plaintiff’s conduct.
We are simply left to guess what type of “summary dismissal” power the magistrate thought he was exercising.
In the “notice of order made” document, his Honour made the finding of fact that the “plaintiff walked out during cross examination refusing to answer any further question.” The only oral findings of fact his Honour appears to have made were:
(a) That “Mr Yusof has chosen not to further continue in his action”; and
(b) “A finding against the credibility of the plaintiff.”
Mr Yusof’s credibility was undoubtedly under attack throughout the trial. Had the trial continued to judgment, the magistrate may well have been entitled to make specific findings that he did not accept Mr Yusof’s evidence about particular matters; and to explain why that was so. However, it is not clear what the vague and generalised “finding against the credibility of the plaintiff” is supposed to mean, or what, if any, relevance it may have had to the decisions to dismiss the claim and order indemnity costs.
The magistrate did not expose any path of reasoning showing how those findings satisfied the test for the exercise of any power of summary dismissal. If his Honour was purporting to rely on any of the powers referred to above, his Honour did not identify which it was, and why the test for its exercise was satisfied.
The magistrate’s reasons for dismissing Mr Yusof’s claim are unintelligible. They do not make clear whether the claim has been dismissed summarily, or adjudicated on the evidence. They do not identify the power purportedly being exercised. They do not identify the test relevant to the exercise of such power. They do not make the necessary findings of fact, or expose a path of reasoning from those facts to the ultimate conclusion. Mr Yusof and this court are left wondering what path of reasoning has led to the ultimate decision to dismiss the claim.
Treating Mr Yusof’s departure as triggering a dismissal power
Mr Yusof submits that it appears from what the magistrate said on at least three occasions that he regarded Mr Yusof’s physical departure from the courtroom as the trigger for some type of summary dismissal power.[42] Mr Yusof says that in so far as the magistrate purported to exercise such a power, he erred in law.
[42]T335, 336 and 340.
I agree that there is no power of summary dismissal that is triggered by a plaintiff physically leaving a courtroom. But it is not clear to me that the magistrate thought that whatever power he was exercising was triggered by that physical act alone. His Honour not only spoke of Mr Yusof “leaving the courtroom”, but also of him “walking out of the case” or “walking away.” Although his Honour’s language was far from clear, it is possible that he was referring to Mr Yusof leaving the courtroom as being a physical expression of his abandonment of his claim.
Whether or not it would have been fair to make such a finding, in light of the discussion that took place with the magistrate, is not relevant for present purposes. A finding that Mr Yusof had abandoned his claim might have been relevant to the exercise of the power to dismiss for want of prosecution (if that was, in fact, the power that his Honour was purporting to exercise).
In the circumstances, I am unable to find that the magistrate committed a separate error of law in relation to the way in which he regarded Mr Yusof’s physical departure from the courtroom.
Errors relating to the indemnity costs order
Adequacy of the costs reasons
The magistrate gave no reasons at all for his decision to award indemnity costs.
Although the making of an indemnity costs order is in the court’s discretion, that discretion must be exercised judicially and according to established jurisprudence. Such an order is not usually made unless there is some special or unusual feature of the case.[43]
[43]Colgate Palmolive Company v Cussons (1993) 46 FCR 225; IMC Aviation Solutions Pty Ltd v Altain Khuder LLC [2011] VSCA 248, [55].
The magistrate did not identify which special or unusual feature of the case warranted an indemnity costs order.
After Mr Yusof had left, AAMI submitted that an indemnity costs order was appropriate because of Mr Yusof’s credibility.
AAMI’S COUNSEL: The burden of proof is on him and there is, in my submission, no possibility that it is open to the court to find the case proven at this stage so a summary dismissal on the merits is quite appropriate.
In the circumstances I ask for a finding as to credibility, and it then follows through that I seek a justified order on an indemnity costs basis including any reserved costs that have been made along the way.[44]
[44]T341.
If the magistrate accepted that submission he did not say so. Furthermore, he announced that he would order indemnity costs before he had heard and determined AAMI’s arguments about credibility.
If the magistrate was relying upon Mr Yusof’s departure as a special circumstance, his Honour did not explain why that was. Had Mr Yusof stayed to complete the evidence over several more days of hearing, and ultimately lost, in the ordinary course he would have been liable to pay costs on the usual party-party basis. An indemnity costs order would have required the magistrate to find some special circumstance, other than merely being ultimately unsuccessful.
Mr Yusof and the appeal court are ultimately left wondering what the special circumstance was that justified the making of an indemnity costs order. The magistrate did not make any findings of fact relevant to costs, nor expose a path of reasoning to an ultimate conclusion that special or unusual circumstances warranted the order.
Was the indemnity costs order open?
A costs order is a discretionary order, which is only amenable to review on the principles set out in House v R.[45] Although it may not be apparent why the magistrate reached the decision to order indemnity costs, if the decision is unreasonable or plainly unjust, the appeal court may infer that an error has occurred.
[45]House v R (1936) 55 CLR 499, 505.
AAMI argues that an indemnity costs order was a reasonable exercise of discretion, in the circumstances of a failure to prosecute after three days of wasted hearing, and Mr Yusof’s “almost total lack of credibility.”
Mr Yusof argues that in so far as the magistrate made the indemnity costs order because he left the court, that decision was plainly unjust and not open in the circumstances. Mr Yusof did not simply storm out of the hearing. He did not leave until the magistrate offered that option to him as one of two options legally open to him. The magistrate invited him to choose one of those options. The magistrate did not explain to him the costs consequences of those options. He made his choice based on a misapprehension of his rights, which the magistrate failed to correct (and, in fact, affirmed).
As discussed earlier, the fact that the trial had dragged on for three days was caused by both sides’ conduct: by Mr Yusof’s unreasonable conduct as a witness, and by AAMI’s counsel’s failure to get to the point and put matters that had issue relevance, instead of wasting vast amounts of time on credit matters (with a clearly resistant witness) that had little, if any, issue relevance.
Had Mr Yusof continued to the end of the trial and ultimately lost, he would have been liable to pay costs only on the usual basis, absent some other special circumstance. By taking up the magistrate’s suggestion that he could leave the hearing and have an immediate determination, he did save AAMI from incurring further costs. That said, there were, undoubtedly, some serious problems with Mr Yusof’s credibility and behaviour, which may not have been able to be satisfactorily explained or resolved had the trial run its full course.
The fundamental problem is that we simply do not know why the magistrate decided to order indemnity costs.
The consequence of my findings about the magistrate’s various other failures is that his orders will be set aside, and the matter remitted to the Magistrate’s Court for re-hearing by a different magistrate. What should happen in relation to any of the costs in the Magistrate’s Court will be determined in due course by that new magistrate. In those circumstances, I do not regard it as necessary or desirable for me to make any finding about this particular ground of appeal.
Conclusion
For the reasons given above, the magistrate:
(a) Failed in his duty to assist Mr Yusof, as a self-represented litigant, to receive a fair trial;
(b) Failed to give adequate reasons for his decision to summarily dismiss Mr Yusof’s claim; and
(c) Failed to give adequate reasons for his decision to order indemnity costs.
Accordingly, I propose to order:
(a) The appeal be allowed;
(b) The orders below be set aside and the proceeding be remitted to the Magistrates’ Court for re-hearing by a different magistrate; and
(c) AAMI pay Mr Yusof’s costs of the appeal.
---
13
0