Applicant v First Respondent

Supreme Court of Victoria|2013-02-18|Before: McMILLAN J

PRACTICE AND PROCEDURE - Appeal as to a costs order of an Associate Judge - Section 17A(2)(b) of the Supreme Court Act 1986 - Rule 77.06 of the Supreme Court (General Civil Procedure) Rules 2005 - Application to extend time to appeal - Whether an extension of time to appeal should be granted by the Court - Principles to be applied - Gallo v Dawson [1990] HCA 30; [1990] 93 ALR 479 - (22 December 2010) - Leave refused.

1. The applicant, Mr Ermanno Giurina, seeks leave to appeal out of time from an order made on 10 October 2012 by the Honourable Lansdowne AsJ, being that he pay the respondents' costs, including costs reserved, as taxed or agreed ('costs order').

2. The costs order was made after her Honour refused Mr Giurina's application for leave to appeal against various interlocutory and final orders made by the Victorian Civil and Administrative Tribunal ('VCAT').[1]

3. The first respondent in this proceeding is an Owners Corporation of a small residential property in Coburg North, comprising five lots. The other respondents are three of the Lot Owners of the said property in Coburg North.

4. In December 2004, Mr Giurina was appointed as an unpaid manager of the Owners Corporation.

5. On 17 February 2012, an application was made to the VCAT on behalf of the Owners Corporation against Mr Giurina, as respondent, seeking a declaration that his position as unpaid manager was terminated on 24 July 2011. Consequential orders were also sought, being that Mr Giurina deliver up the records of the Owners Corporation, and transfer control of the Owners Corporation's bank account.

6. On 4 April 2012, the three Lot Owners, who are respondents in the present case, were given leave to be joined as additional applicants to the proceedings in the VCAT.

7. On 1 May 2012, Deputy President Lulham heard the proceedings, and on 31 May 2012, he delivered his reasons and made declarations and orders. The reasons, inter alia, declared that the management agreement between the Owners Corporation and Mr Giurina was terminated on 24 July 2011. The Deputy President also made declarations as to both a number of breaches of duty committed by Mr Giurina in relation to the management of the funds of the Owners Corporation, and in relation to his attempt to deceive the VCAT within the meaning of s 78(1)(e) of the Victorian Civil and Administrative Tribunal Act 1998. The consequential orders sought by the Owners Corporation and Lot Owners were also made, and their costs were reserved.

8. On 16 July 2012, Mr Giurina, herein known as the applicant, sought leave from this Court to appeal out of time against both the interlocutory and final orders made in the VCAT proceedings.

9. The leave applications were set down for hearing on 8 August 2012 before Associate Justice Landsdowne. The hearing was then adjourned to 23 August 2012, in order to enable the applicant to produce the transcript of the proceedings before the VCAT.

10. On 23 August 2012, the applicant advised the Court that he had chosen to proceed without the VCAT transcript. On this basis, Associate Justice Landsdowne proceeded to hear the leave applications, and reserved her decision.

11. On 10 October 2012, Associate Justice Landsdowne published her reasons for the decision, wherein the applicant was refused leave to appeal. The parties were invited to make submissions as to costs, and the applicant did so. After hearing the parties on the issue of costs, Associate Justice Landsdowne made the costs orders, during which time the applicant was in court. Liberty was given to the applicant to apply to seek a different costs order in relation to any costs incurred as a step taken by him on behalf of the Owners Corporation alone.

12. On 9 November 2012, the respondents filed a summons for taxation of their costs, returnable before the Costs Court on 5 February 2013. The summons was served on the applicant on 28 November 2012. On 5 February 2013, the summons was adjourned by consent to the next callover on 19 February 2013.

13. A notice seeking leave to appeal dated 18 January 2013 was filed by the applicant on 21 January 2013, and served by the applicant on the solicitors for the respondents in this proceeding.

The Principles Relevant to an Application for an Extension of Time to Appeal

14. In order to appeal the costs order, the applicant requires an extension of time to seek leave to appeal.[2] The applicant did not seek an extension of time in his notice of appeal. Nevertheless, the respondent did not press this issue, and the application proceeded before me on the basis that the applicant had sought an extension of time as well as leave to appeal.

15. The grant of an extension of time under the Supreme Court (General Civil Procedure) Rules 2005 ('the Rules') is not automatic.[3] The object of the Court in exercising its discretion to grant extensions of time is to ensure that the Rules, which fix the time for the doing of acts, do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the Court to do justice between the parties.[4]

16. In order to justify an extension of time, a number of considerations generally come into play, being:[5]

17. Other factors which the Court may take into account include the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application for an extension of time. These factors assist in determining whether the Rules will work an injustice.[6]

18. Pursuant to r 59.02 of the Rules, the orders made by Lansdowne AsJ were made in Court, and therefore the costs orders took effect on and from 10 October 2012. The parties had within five days of the order made by her Honour to file an appeal.[7] For the purposes of calculating time, where the time provided by the Rules is for a period of five days or fewer, the days when the Court office is shut are excluded.[8] The time to file a notice of appeal therefore expired on 17 October 2012.

19. As is stated above, the notice of appeal was filed on 21 January 2013. In my view, where the Rules provide a five day period for the filing of an appeal, a delay of over three months is a significant delay.

20. As I have found that the delay was significant, my view is that, in order to obtain an extension of time, the explanation should be compelling. It is not.

21. The applicant's evidence concerning the reasons for the delay in filing the application for leave to appeal is as follows:

(a) the authenticated orders made on 10 October 2012 were not sent to him at the address for service specified in the orders made on 8 August 2012 ('the address for service'). Instead the orders were posted to an alternate address and he 'did not have access to them until on or about mid-December 2012' ('the alternative address for service').[9] When asked by the Court for a precise date for receipt of the orders, the applicant indicated that '[i]t would have been around 16, 17 December, about a week before Christmas';[10] and

(b) after receiving the orders, the applicant attended the Prothonotary's Office of the Supreme Court where he was advised 'on the steps necessary to commence an appeal against an order of an Associate Judge'.[11] He was advised that he 'could only file the necessary paperwork to commence those steps from 10 January 2013 which [he] did on 21 January 2013 after having served the Notice of Appeal on [the solicitors for the respondents] on 18 January 2013'.[12]

22. The applicant submitted that the delay in obtaining the authenticated orders dated 10 October 2012 was not his fault and that he acted quickly to commence the appeal process as circumstances permitted him.[13]

23. In my view, the applicant's explanation as to the date upon which he received the authenticated orders is vague. He relies on the fact that the authenticated orders were not sent to the address for service, as specified in the orders made on 8 August 2012. Nevertheless, other documents filed in the proceeding, namely, the originating motion filed 16 July 2012 and the applicant's affidavit sworn on 21 August 2012, record the applicant's alternative address for service. The applicant has not provided any reasonable explanation as to why he failed to check the letterbox at the alternative address for service until mid December 2012. Indeed, he seemed to, at least in part, resile from that position by offering the explanation that the letter was 'probably placed in an incorrect letterbox as I did not have access to them until on or about mid-December 2012'.[14]

24. In any case, late receipt of the authenticated orders does not serve as an explanation for a delay in appealing the costs order in the present case, as the applicant was present at the hearing on 10 October 2012 when the costs order was made. The applicant stated that, from attending judgment, 'I understood the generalities of the orders but not the exact ... wording'.[15] In my view, this explanation is unconvincing. The cost order made, being that he pay the respondents' costs, is straightforward and commonplace. And, when asked by the Court why he did not take steps to find out what the orders did state, the applicant replied:

well, I can't answer that. I do remember phoning the Court and they said that [the orders] had only been sent out [recently] and I was just waiting for them to actually arrive at the address for service because my understanding was that you couldn't act on anything until you actually had been served with the orders from the Court.[16]

Nevertheless, if the applicant was indeed informed that orders had just been sent out in October 2012, he took no steps to follow up to see what had happened to the orders, when the orders failed to arrive at his address for service.

25. The applicant also did not adequately explain why, within the five days permitted to file an appeal, he failed to make any contact with the Court to enquire about the costs order or the steps necessary to appeal from that order. The applicant is also vague as to the date that he did attend the Prothonotary's office, stating that he attended 'a short time after obtaining the orders'.[17] His evidence, being that he was advised by the Prothonotary's office that he could only file the necessary paperwork from 10 January 2013, rather than prior to the closure of the Prothonotary's office on 24 December 2012, is questionable. In any case, the applicant has provided no satisfactory explanation as to why his application for leave to appeal was not filed upon the reopening of the Prothonotary's office on 10 January 2013.

26. In addition to the above, the applicant's explanation for the delay is unconvincing in light of the following:

(a) as is stated above, the applicant was present at Court on 10 October 2012, when Lansdowne AsJ handed down her judgment; he made submissions in respect of costs; and the costs order was made in his presence;

(b) the applicant is a lawyer.[18] He is familiar with Court processes. He has appeared throughout the proceedings at the VCAT and in this Court. He has made many applications, including an application for summary dismissal and leave to appeal, drafted affidavits and made lengthy written and oral submissions regarding technical matters of law. Given this, the applicant should know the Rules, or, at least, how to find them. Indeed, it is difficult to conclude that the applicant suffered a lack of knowledge of the necessary steps to appeal because he also sought leave to appeal out of time before Lansdowne AsJ. In any event, lack of knowledge of the steps necessary to appeal against a Court order is not ordinarily a valid or reasonable excuse for delay; and

(c) by 28 November 2012, the respondents had served a summons for taxation, returnable before the Costs Court, on the applicant. The basis of that summons was the costs order made on 10 October 2012. The service of that summons should have alerted the applicant to act, if he wished to file a notice of appeal and seek an extension of time within which to file a notice.

27. For all of these reasons, I find that the applicant's explanation for the delay in filing the notice of appeal is entirely unsatisfactory and not compelling.

Prospects of the Applicant Succeeding in the Appeal

28. As the applicant's appeal is solely in relation to the costs order, leave is required.[19] An appeal relating to costs is discretionary. When determining the question of costs, the Court has a wide discretion. A Court would not interfere with a costs order unless the Associate Judge failed to exercise the discretion or did so erroneously.[20]

29. An order for costs is generally made where it is just and reasonable that one party who causes the incurring of costs by another party should reimburse the party for the costs incurred.[21]

30. Counsel for the respondents' submitted that in the absence of strong reasons, such as an error of principle in the exercise of discretion, a consideration of irrelevant matters or other manifest mistake, an appellate Court will not interfere with the exercise of the discretion. In making this submission, counsel relied upon Kallitsas v Emerson Finance Pty Ltd,[22] where Judd J stated:

The requirement for leave to appeal on the question of costs was discussed by Batt JA (with whom Charles and Callaway JJA agreed) in Etna and Anor v Arif and Ors[23] where he said:

With regard to the discretion to grant leave, Callaway JA in Hanlon v Brookes[24] at 1632 observed:

It is almost invariably the case that the judge at first instance is better placed to deal with the costs after a long trial and counsel seeking leave ordinarily has a difficult task. The test is not whether we should have exercised the discretion in the same way as his Honour but whether there was or were a ground or grounds on which he could reasonably do so.

In Wentworth v Rogers (No 3) (1986) 6 NSWLR 642, which concerned an application for leave to appeal against an order for costs, Kirby P (with whom Glass JA agreed) stated at 644 that the principles requiring leave to appeal from interlocutory decisions applied with special force where the decision in question was one of practice and procedure, referring to the well-known statement of Jordan CJ in Re The Will of F.B. Gilbert (Deceased) [1946] NSWStRp 24; (1946) 46 SR(NSW) 318 at 323 and to subsequent developments. His Honour further stated that the New South Wales provision corresponding in substance to s 17A(1)(b) amounted to a legislative recognition of those considerations. He continued:

Accordingly, it is normally necessary for a claimant for such leave to show something more than that the appeal court would, if exercising its discretion afresh, have come to a conclusion different to that reached by the trial judge. Some error of principle in the exercise of the discretion, a consideration of irrelevant matters or some other manifest mistake is needed to take the case out of the ordinary situation in which, wherever a discretion is to be exercised, minds may differ on the result.

One of the purposes of this provision is to ensure that costs questions, important though they frequently are to litigants, not only cannot be further litigated by a party as of right on appeal, but also may only be allowed to be further litigated by appeal if the Court of Appeal thinks there is some good reason, over and above the Court's own opinion of what would have been the best costs order in the particular circumstances, for doing so. In a great many cases, including the present, costs are in the discretion of the Court; they also seem to me to fall within the category of matters of practice and procedure.

In this application the plaintiff must show something more than that this court would have come to a different conclusion to the master. The plaintiff must demonstrate some error of principle in the exercise of discretion or the consideration of irrelevant matters or some other manifest mistake.[25]

31. The applicant's submissions on the question of costs before Associate Justice Landsdowne included his lack of capacity to pay and a submission that the Management Agreement between himself and the Owners Corporation indemnified him in respect of any claim for costs. Lansdowne AsJ held that any claimed impecuniosity of the applicant was not a ground upon which to refuse to make a costs order in the respondents' favour. She also rejected the applicant's submissions in regard to a costs immunity arising from the Management Agreement on the basis that the Management Agreement had been terminated by the time the applicant made his application to the Supreme Court, and therefore the applicant was not a manager when he brought the application.

32. In my view, the costs order made by Associate Justice Landsdowne was a proper exercise of the discretion as to costs in circumstances where the applicant had failed entirely in his applications for leave to appeal the VCAT orders; where she found there was no merit in a claimed immunity pursuant to the Management Agreement; and where she found any claimed impecuniosity of the applicant was not a ground upon which to refuse the respondents' application for costs.

33. For the reasons stated, in my view, there is no prospect that the applicant would succeed in any appeal as to the costs order.

34. Before me, the applicant also made submissions that were not raised before Associate Justice Landsdowne as follows:

(a) he is immune from a costs order by operation of s 123 of the Owners Corporations Act 2006; and

(b) he should not be liable to contribute (as a Lot Owner) to the costs of the proceedings borne by the Owners Corporation.

35. Counsel for the respondents submitted that not only did the applicant not raise the applicability of any immunity by virtue of s 123 of the Owners Corporations Act 2006 before Lansdowne AsJ, he asserted in the course of his application for leave to appeal before her that the provisions of pt 6 of the Owners Corporations Act 2006, which relates to Managers and encompasses s 123, did not apply to him at all.[26]

36. Counsel for the respondents submitted that the new points now raised by the applicant are, in any event, bound to fail because any volunteer immunity which might exist pursuant to s 123 of the Owners Corporations Act 2006 and/or the Management Agreement has no application on the facts of this case for the following reasons:

(a) the applicant was not carrying out the duties of Manager of the Owners Corporation in the filing and prosecution of his application for leave to appeal the orders of the VCAT;

(b) Associate Justice Landsdowne rejected the applicant's submissions in regard to a costs immunity arising from the Management Agreement as the applicant was not a manager when he initiated and prosecuted his application for leave to appeal the VCAT orders. And, such reasoning should apply equally to the applicant's submissions in relation to s 123 of the Owners Corporations Act 2006;

(c) in the substantive proceedings, the applicant had been found to have ceased to be the manager of the Owners Corporation on and from 11 July 2012, or upon the issue of proceedings in the VCAT, or at the latest, when the Lot Owner applicants were joined in the VCAT proceedings in April 2012.[27] Therefore, throughout the proceedings in this Court, the applicant was not carrying out the duties of a Manager. Unless the applicant was carrying out the duties of a Manager, s 123 of the Owners Corporations Act 2006 and the Management Agreement, were not and could not have been relevant to the question of costs of the proceeding before Lansdowne AsJ; and

(d) further, there was no basis upon which Lansdowne AsJ could have made an order that the applicant, as Lot Owner, should not be liable to contribute towards the costs borne by the Owners Corporation. Any issue of liability of the Lot Owners to contribute to the expenses borne by the Owners Corporation in dealing with the applications pursued by the applicant arises quite separately from the proceedings in which the applicant was seeking to appeal the VCAT orders.

37. In any case, in resisting the applicant's new submissions, counsel for the respondents submitted that the Court should apply the principle that it is only in exceptional circumstances that a new argument can be raised for the first time on appeal. As the High Court held in Metwally v University of Woollongong:[28]

It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.[29]

38. In Jones Lang Lasalle (Vic) Pty Ltd v Korlevski,[30] Warren CJ stated that:

Even if the other party is not disadvantaged by the fact that the new argument was not raised at trial, for example, if the argument raises a pure question of law that the other party could not have avoided by conducting its case differently, the party seeking to raise the new argument is not entitled to do so as of right. [31]

39. In my view, the applicant did not provide any realistic explanation before me as to why new submissions in relation to s 123 of the Owners Corporations Act 2006, and his liability as Lot Owner, were not raised before Associate Justice Landsdowne.

40. During the hearing of this matter, the applicant asserted that his submissions before Associate Justice Landsdowne as to a costs immunity arising from the Management Agreement, somehow incorporated a claimed immunity under s 123 of the Owners Corporations Act 2006. This is despite the applicant accepting that he did not explicitly make the s 123 immunity point before her Honour. There was no evidence relied upon by the applicant to support this submission. I do not accept it. The claimed immunity arising from the Management Agreement is a distinct form of immunity.

41. The applicant also submitted that, as her Honour considered that the Owners Corporations Act 2006 was applicable in other respects, she erred in not considering the effect of s 123 of the Act. This is not so. It is incumbent upon the parties to make the submissions in support of their own case. The applicant failed to raise the s 123 immunity point before her Honour.

42. In substance, there is no proper or adequate material relied on by the applicant to enable me to exercise my discretion to allow the new points to be raised by the applicant now and I decline to do so. If I am wrong not to allow the points to be raised, I consider that the new points would not succeed in any event for the reasons put forward by the respondents.

43. Counsel for the respondents submitted that the applicant has put the respondents to considerable expense and inconvenience in his attempts to appeal the orders of the VCAT, and his delays in so doing. The applicant did not address this point in his submissions. In my view, the respondents have suffered prejudice as a result of the appeal by the applicant and his delays.

History of the Proceedings and the Conduct of the Parties

44. In exercising its discretion for leave to extend time, the Court is able to have regard to the history of the proceedings and the conduct of the parties.

45. Counsel for the respondents rely on the findings of the VCAT in relation to the history of those proceedings and the conduct of the applicant. It is submitted by the respondents that those findings militate against the applicant's application before this Court. The respondents cite the reasons of Deputy President Lulham, as follows:

If this was a case about who should be manager, to be decided purely on the quality of management services on offer, I would have no hesitation in finding against Mr Giurina. He breached his duties as a trustee. He breached his duties under s122(2) of the [Owners Corporations Act 2006]. He kept secret the existence of litigation against both himself and the Owners Corporation, and then kept secret the fact of his having consented to judgment being entered against the Owners Corporation. He breached paragraph 7 of the Order made [on] 4 April 2012 and gave nonsensical evidence in relation to bank records. He pretended as 'Applicant', to withdraw the proceeding and then 'consented' to that bogus withdrawal. That Mr Giurina is a lawyer makes his misconduct all the more serious, because it cannot have been undertaken as a result of ignorance. Mr Giurina has blatantly disregarded his legal obligations.[32]

46. Counsel for the respondents submitted that given those findings as to the applicant's conduct prior to, and during, the VCAT proceedings, the applicant's pursuit of reinstatement as unpaid manager by means of his application for leave to appeal the VCAT orders on questions of law was without merit.

47. In support of this submission, counsel also referred to s 119(6) of the Owners Corporations Act 2006, which gives an Owners Corporation an unrestricted capacity to revoke the appointment of a manager, even if there had been some merit in the applicant's contentions as to the invalidity of his removal.

48. The applicant did not make any submissions in reply.

49. In my view, the factors relied upon by the respondents weigh significantly against the applicant. His pursuit of an appeal would have been likely to be pointless, even if successful, as an Owners Corporation can remove a manager at any time.

50. The applicant's application for an extension of time within which to file a notice seeking leave to appeal should be refused.

51. Although not required to make any findings on the substantive appeal as a result of the decision to refuse the applicant's application for an extension of time, I should add that, in my view, the prospect of the applicant being successful in an appeal on the issue of costs is hopeless for the reasons set out in paragraphs 28 to 42 above.

52. I will hear the parties on the issue of costs.

[1] See Owners Corporation No 1579 v Giurina (Owners Corporation) [2012] VCAT 643 (1 May 2012) (Deputy President Lulham); Giurina v Owners Corporation No 1579 (Reasons for Decision, Lansdowne AsJ, 10 October 2012).

[3] Gallo v Dawson [1990] HCA 30; [1990] 93 ALR 479, 480 (McHugh J).

[5] Simonsen v Legge [2010] WASC 238 (22 December 2010) [8] (Pullin, Newness, Murphy JJA); Slaveski v State of Victoria [2011] VSCA (25 November 2011) (Nettle and Harper JJA).

[6] Gallo v Dawson [1990] HCA 30; [1990] 93 ALR 479, 480 (McHugh J).

[7] Supreme Court (General Civil Procedure Rules) 2005 r 77.07(4). The five day time limit is specified in the applicable version of the Act, being SR No 148/2005, which incorporates amendments as at 17 September 2012.

[9] Affidavit of applicant sworn 27 January 2013 [23].

[10] See Transcript of the Proceedings, Giurina v Owners Corporation No 1579 (Supreme Court of Victoria, McMillan J, 12 February 2013).

[14] Affidavit of applicant sworn 27 January 2013 [23].

[15] See Transcript of the Proceedings, Giurina v Owners Corporation No 1579 (Supreme Court of Victoria, McMillan J, 12 February 2013).

[17] Affidavit of applicant sworn 27 January 2013 [23].

[18] Owners Corporation No 1579 v Giurina (Owners Corporation) [2012] VCAT 643 (1 May 2012) [19] (Deputy President Lulham).

[20] ACN 072 358 831 Pty Ltd v Arnott [2007] VSCA 243 (18 September 2007) [13] (Warren CJ).

[22] [2008] VSC 180 (29 May 2008).

[25] Kallitsas v Emerson Finance Pty Ltd [2008] VSC 180 (29 May 2008) [24]-[25] (original paragraph numbers omitted).

[26] See Giurina v Owners Corporation No 1579 (Reasons for Decision, Lansdowne AsJ, 10 October 2012) [61].

[29] Ibid 71 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ).

[30] [2012] VSCA 305 (14 December 2012) [5].

[32] Owners Corporation No 1579 v Giurina (Owners Corporation) [2012] VCAT 643 (1 May 2012) [27].

Court (General Civil Procedure) Rules 2005

Civil and Administrative Tribunal Act 1998

Corporations Act 2006

At a glance

Court

Decision date

Before

Source

Judgment (104 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (2)