Appellant v Respondent

Supreme Court of Victoria|2016-05-24|Before: JUDD J

APPEAL - Appeal from Associate Judge - Whether appeal lies to Court of Appeal - Rule 77.07(1)(a) Supreme Court (General Civil Procedure) Rules 2015 (Vic) - Referral made pursuant to rule 77.05.

**1 On 24 May 2013 I gave judgment in favour of the plaintiff, Jenny Kambouris, against the second defendant, Con Kiatos.[1] The proceeding concerned the conduct of Kiatos, as solicitor for the plaintiff, whose position when so acting was compromised by his relationship with the first defendant, Christos Floros, now deceased, and the plaintiff's husband, as coventurers in a property development project.

2 The plaintiff compromised her claims against the third defendant, Ella Gorenstein, a solicitor who also provided advice and assistance to her, in connection with security given to support the project. During the course of the trial, which involved numerous adjournments, the withdrawal of some parties and the appearance of others, the plaintiff resolved her claim against Mr Floros. That left her claim against Mr Kiatos, which was summarised as follows:[2]**

... on about 7 July 2005, Mr Kiatos, as her solicitor, instructed Ms Gorenstein to prepare and lodge a caveat over the property of Ms Papakostas at Loch Sport; that Mr Kiatos owed her a duty to ensure that the indemnity agreement prepared for signature by Ms Papakostas had in fact been signed, or to notify her if it had not; and that Mr Kiatos knew that his wife had not signed the agreement, and had not authorised the caveat, but failed to inform the plaintiff as his client. The plaintiff claimed to have suffered consequential loss and damage.

3 At the conclusion of the trial, I found:[3]

The evidence given by the plaintiff and her husband conforms generally with the allegation in the plaintiff's statement of claim that in around October 2006 and May 2007, Mr Kiatos represented to her that both mortgages continued to secure her position in respect of the borrowings by Betac. I am satisfied that Mr Kiatos was acting as the plaintiff's solicitor at the time he gave each of the certificates, with the knowledge that his wife had not in fact executed an agreement or given a mortgage. He was, at the very least, obliged to inform the plaintiff of that fact and alert her to the risk that she only had recourse to the property of Mr Floros. By failing to so inform the plaintiff, Mr Kiatos breached his duty of care, if only to make full disclosure of facts known to him and the associated risk.

When the bank ultimately called in the security, the plaintiff was unable to call upon the security she believed had been provided by Ms Papakostas. In my opinion, the plaintiff has suffered loss and damage by reason of the breach by Mr Kiatos, in failing to advise her in October 2006 and May 2007, when she was called upon to provide additional security to the bank, that she was not protected by an indemnity agreement executed by Ms Papakostas that would support the caveat, and a mortgage granted by Ms Papakostas over the Loch Sport property.

Accordingly, the plaintiff is entitled to judgment against the second defendant, Con Kiatos, with damages to be assessed.

**4 The assessment of damages was expressly referred to an Associate Judge pursuant to r 77.05 of the Supreme Court (General Civil Procedure) Rules 2005.

5 The hearing before the Associate Judge took place over 10 days in February and March 2015. On 30 April 2015 her Honour awarded nominal damages, concluding that the plaintiff had failed to establish that Mr Kiatos caused the loss.[4] The plaintiff initiated an appeal to a judge of the Trial Division, by notice filed 11 September 2015, and sought leave to appeal out of time 'on the ground that, having sought to file a notice of appeal on 16 June 2015, her lawyers incorrectly took the view that the decision needed to be appealed to the court of appeal'.

6 On the return of the plaintiff's application for leave to appeal out of time, Mr Kiatos challenged the competency of the application and appeal, on the ground that under r 77.07 such application and appeal must be made to the Court of Appeal. He contended that the assessment had been made by an Associate Judge with the authority of a Trial Division judge by reason only of the referral made under r 77.05.

7 Rule 77.05 provides:[5]**

(1) If a matter before a Judge of the Court, which matter would not otherwise be within the authority of an Associate Judge, appears to the Judge to be proper for the determination of an Associate Judge, the Judge of the Court, by order, may refer the matter to an Associate Judge.

(2) If a Judge of the Court refers a matter to an Associate Judge, the Associate Judge may -

(a) hear and determine the matter, subject to any directions in the order referring the matter; or

(b) refer the matter back to the Judge of the Court in accordance with Rule 77.04.

(3) In hearing and determining a matter referred by a Judge of the Court to an Associate Judge, the Associate Judge has the same powers as a Judge of the Court would have in hearing and determining such a matter, subject to any directions in the order referring the matter.

(4) Despite paragraph (1), a Judge of the Court shall not refer to an Associate Judge any matter under Part 2 or Part 2A of the Confiscation Act 1997.

8 At the time of the referral, and until 30 June 2015, r 77.07(1) provided:

(1) For the purposes of section 17(3) of the Supreme Court Act 1986, in a proceeding to which any Chapter of the Rules of the Supreme Court (except Chapter V) applies-

(a) an appeal lies to the Court of Appeal from the Trial Division constituted by an Associate Judge in respect of a matter not otherwise within the authority of an Associate Judge which is referred to an Associate Judge by a Judge of the Court; ...[6]

9 Rule 77.07 was amended by SR No 148/2005, which commenced to operate on 1 July 2015 and now provides:

(1) For the purposes of sections 10(1)(ab) and 17(3) of the Supreme Court Act 1986-

(a) an appeal lies to the Court of Appeal (and not to the Trial Division) from the Trial Division constituted by an Associate Judge in respect of a matter referred to an Associate Judge under Rule 77.05;[7]

10 The plaintiff contended that an appeal from the assessment made by the Associate Judge must be made to the Trial Division under s 17 of the Supreme Court Act 1986, because an Associate Judge was expressly authorised to assess damages. The relevant sub-section provides:

(1A) The Trial Division constituted by an Associate Judge may hear and determine all matters, whether civil or criminal, not required by or under this Act or any other Act or the Rules to be heard and determined -

(a) by the Court of Appeal; or

(b) by the Trial Division constituted by a Judge of the Court.

(3) Unless otherwise expressly provided by this Act or any other Act or the Rules, an appeal lies to the Trial Division constituted by a Judge of the Court from any determination of the Trial Division constituted by an Associate Judge.[8]

11 The plaintiff relied on r 51.01 as the source of authority to assess damages. Thus, she argued, a precondition for the requirement that any appeal lie only to the Court of Appeal had not been satisfied. Rule 51.01 provides:

Subject to Rule 51.05, damages under any judgment or order for damages to be assessed shall, unless the Court otherwise orders, be assessed by an Associate Judge.[9]

**12 This Rule may seem anomalous in the context of modern commercial trials, in which damages are often assessed by the trial judge. The application of the Rule is best understood when judgment is entered in default of appearance or defence, or on a successful application for summary judgement, or where a trial has concluded with no more than an order for 'damages to be assessed'. The plaintiff must be taken to have relied upon the Rule to confer general authority, subject to the exception of judicial intervention should 'the Court otherwise order(s)'.

13 Under s 17 of the Supreme Court Act, an Associate Judge is authorised to 'hear and determine all matters ... not required by or under this Act or any other Act, or Rules', to be heard and determined by the Court of Appeal or a judge of the Trial Division. Rule 77.02 requires, subject to specific exceptions, that trials are only conducted by judges of the Trial Division. The Rule provides:**

(1) Subject to paragraph (2) and Rules 12.12, 22.06(1)(d), 32.08(3) and 77.01(2)(b), (c), (d), (e) and (f) -

(a) the trial of a proceeding shall not be held before an Associate Judge; and

(b) an Associate Judge shall not give any judgment or make any order at the trial of a proceeding.

(2) Except as provided by paragraph (3)(a), (c), (d) or (e), an Associate Judge may at the trial of a proceeding give judgment or make an order by consent of all parties.

(3) An Associate Judge shall not have authority to hear and determine -

(a) any application which by these Rules or any Act is required to be heard only by a Judge of the Court or the Court of Appeal, as the case requires;

(b) subject to this Order, any application for an injunction or other order under section 37 of the Supreme Court Act 1986;

(c) any proceeding relating to the liberty of the subject;

(d) any criminal proceeding, other than an appeal or an application for leave to appeal under Part 3 of Order 58;

(e) any application under section 21 of the Supreme Court Act 1986;

(f) any application or proceeding under Part 2 or Part 2A of the Confiscation Act 1997.

(4) Except where the trial was conducted by an Associate Judge, an order under Rule 49.02(2) shall only be made by a Judge of the Court.

14 Paragraph (1), (2) and (4) of r 77.02 are directly concerned with the disposition of trials. An Associate Judge is expressly precluded from conducting a trial, with very specific exceptions. These are:

**(a) judgment by consent in some circumstances - r 77.02(2);

(c) final disposition of a proceeding with the consent of the parties on an application for summary judgment - rr 22.08(1)(d), 22.22(c);

(d) applications for preliminary discovery and for discovery from nonparties - r 32.08(3);

(e) applications which concern payment or transfer of money, sale of property, appointment of a receiver, recovery of land and undefended civil proceedings - r 77.01(2)(b), (c), (d), (e) and (f).**

**15 Even when the trial of a proceeding is called on, and a party is absent, an Associate Judge has no authority to conduct the trial unless the Associate Judge is otherwise authorised to conduct the trial: rr 77.02(4), 49.02(2). If the plaintiff's contention is to be accepted, there is a striking absence of any mention of r 51.01. Rule 51.01 predates the introduction of Associate Judges, and s 17(1A) of the Supreme Court Act. If the Rule is to be regarded as a general authorisation to an Associate Judge to conduct part of a civil trial, it would have been expressly mentioned as an exception to the very specific limitation on authority in r 77.02.

16 What then is to be made of r 51.01, which appears to confer a general authority, 'unless the Court otherwise orders'? Insofar as the Rule may have any operation in the context of a trial, 'the Court', for the purpose of r 51.01, will be constituted by a judge of the Trial Division. That is, unless an Associate Judge is expressly authorised to conduct a trial pursuant to a referral under r 77.05.

17 The trial judge may, and will often, proceed to assess damages without the need for any intervening order to displace an assessment of damages by an Associate Judge. The trial judge will, in such circumstances, conduct the trial to conclusion. There will be no occasion for an assessment by an Associate Judge, no occasion for the court to 'otherwise order' and no scope for the operation of r 51.01 at all.

18 If r 51.01 is to be taken to expressly confer such general authority on an Associate Judge, unless an intervening order is made, the authority is inconsistent with the express limitation in r 77.02. If, on the other hand, the operation of the Rule is confined to circumstances in which there is no trial, or the trial has effectively concluded, the inconsistency is removed. For example, assessment of damages by an Associate Judge following a default judgment, successful summary judgment application, or where the trial has concluded with judgment and an order for 'damages to be assessed', without more, will not involve adjudication of part of a trial. Any trial will have concluded.

19 The trial of this proceeding was not a 'matter' within the authority of an Associate Judge. The whole of the trial might have been referred to an Associate Judge under r 77.05. In the present case, only part of the trial was expressly referred. In my opinion, the assessment of damages remained part of the trial until expressly referred to an Associate Judge. The authority granted under r 51.01 was never enlivened. At the time of the referral, the assessment of damages was not within the authority of an Associate Judge. Even if r 51.01 is taken to have been enlivened, there was an intervening order of the court, made at a point when the trial had not concluded. An Associate Judge had not been authorised to conduct the trial.

20 The plaintiff drew a distinction between the terms of r 77.07(1)(a) before and after 1 July 2015, suggesting that, under the new rule, it was no longer a pre-condition for an appeal to the Court of Appeal that the referral was of a 'matter not otherwise within the authority of an Associate Judge'. The amendment involved, amongst other changes, the removal of qualifying words,**

of a matter not otherwise within the authority of an Associate Judge which is referred to an Associate Judge by a judge of the Court,

of a matter referred to an Associate Judge under Rule 77.05.

The plaintiff argued that, as the referral took place prior to 1 July 2015, the precondition had not been satisfied. Consequently, any appeal was to the Trial Division.

**21 Contrary to the plaintiff's submission, the amendment did not bring about a change to the appeal pathway. One purpose of the amendment was, as the text reveals, to provide certainty by making it clear that an appeal from a decision in a matter referred under s 77.05 was 'not to the Trial Division'. The plaintiff's argument was predicated on the existence of another purpose, to extend the scope of r 77.07(1)(a) to a decision by an Associate Judge on a 'matter' that was already within authority. In other words, the form of the referral, purporting to be made under s 77.05, would be the determinative factor, rather than the character of the 'matter' referred.

22 I do not accept that such a purpose is evident from the text or context. No change was made to r 77.05, which was, and remains, the gateway to r 77.7(1)(a). A referral under r 77.05 is confined to a 'matter' which would 'not otherwise be within the authority of an Associate Judge'. That being so, repetition of the same qualifying words in r 77.07(1)(a), as it stood prior to 1 July 2015, was unnecessary, and the removal inconsequential. If the object of the amendment was to clarify the appeal pathway, by making it clear that in the prescribed circumstances there was to be no appeal to the Trial Division, and to remove surplus words, it did not bring about any substantive change. The amendment did not operate to enlarge the scope for a referral under r 77.05 to include a 'matter' already within the authority of the Associate Judge.

23 Such a construction is consistent with the view expressed by Kyrou J (as his Honour then was) in Amcor Limited v Barnes,[10] in which his Honour said:**

... The expression, 'a matter not otherwise within the authority of an Associate Judge which is referred to an Associate Judge by a Judge of the Court' in r 77.07(1)(a) is confined to matters that, in the absence of a referral from a judge under r 77.05(1), would not be within the jurisdiction of an associate judge. That this is so is evident from the fact that the referral power in r 77.05(1) uses the same language as r 77.07(1)(a), namely, 'a matter ... which ... would not otherwise be within the authority of an Associate Judge'. The privilege dispute in the present case was not such a matter.

**24 The matter referred to in Amcor was a dispute over privilege claims made in the discovery process. The resolution of such claims was plainly within the authority of an Associate Judge. If the plaintiff's contention is correct, so that a referral under r 77.05 might now include a discovery dispute form would prevail over substance to dictate the appeal path.

25 At the time of the referral, the conduct of the trial was not within the authority of an Associate Judge. Accordingly, the precondition for a referral under r 77.05 was satisfied.

26 Thus, any appeal by the plaintiff from the decision of the Associate Judge is to the Court of Appeal. The application for leave to appeal out of time must also be made to the Court of Appeal or the Registrar under r 64.08.

27 The plaintiff's application for leave is dismissed with costs.**

[10] [2011] VSC 341 ('Amcor').

Court (General Civil Procedure) Rules 2015

Court (General Civil Procedure) Rules 2005

At a glance

Court

Decision date

Before

Source

Judgment (56 paragraphs)

Parties

Legislation Cited (3)