Dimos v Willetts & Anor [2000] VSCA 154

Dimos v Willetts & Anor [2000] VSCA 154 - VSCA 2000 case summary — Zoe

[26]

This Court was uncertain whether the trial judge had any such intention and so, in accordance with its powers pursuant to R.64.22(5) made written enquiry of the learned trial judge as to the object or intent of his order for costs, particularly in the light of the fact that there seemed from the transcript to have been no discussion of the question, notwithstanding detailed submissions as to the possible making of a Sanderson or Bullock order. Lest it be thought that such a request was an unusual exercise of this Court's powers on appeal, inasmuch as court orders should be left to speak for themselves, as it were, unless application be made under the "slip rule", the procedure here adopted seems to have been either authorised or approved by the Court of Appeal in Korner v. H. Korner & Co. Ltd. [12] It should, however, be noted that what was there approved was, more precisely, an enquiry by a taxing master or a judge on review to the trial judge for the purpose of resolving any ambiguities or uncertainties in the terms of a costs order. It may also be said that, although Singleton, L.J. (with whom Jenkins, L.J. concurred) merely expressed the opinion that "great trouble and expense would be saved if either party were able to go back to the judge" (emphasis added), for subsequently[13] they appeared to suggest that an alteration in the rules to bring about some such means of solving that kind of problem would be necessary. Thus, although they expressed the opinion that it was "in the public interest" that that should be the case, it may be concluded that they merely expressed disapproval of existing practice without providing any remedy other than the suggested amendment to the relevant rules. Fortunately in this Court there is express power under the rules to call for a report from the trial judge, although one should be cautious about treating that rule as permitting this Court in the ordinary case to go behind the language of a formal court order. Generally errors in expression should be corrected under the slip rule, but Korner suggests that in matters such as the interpretation of costs orders further enquiry may obviate necessity for applications to amend such orders.

[44]

For reasons which have already been suggested, Kelly's Directories has, to my knowledge, only been cited on three subsequent occasions in reported English authority. In the first of those cases, Badische Anilin und Soda Fabrik v. Hickson[29], also heard in the Chancery Division, Warrington, J. followed Kelly's Directories in not entirely dissimilar circumstances in relation to a costs order in a patent action. There again there were two defendants but the action against the defendant company was settled before trial and an order made staying proceedings as against that defendant. The plaintiff had succeeded at trial[30] against the individual defendant (on two patents out of three), at the end of which there was an order that the plaintiff's costs of the action up to and including judgment (other than those relating to the third patent) should be taxed and paid by the individual defendant. The Taxing Master followed Kelly's Directories saying that he had not been directed to make any deduction on account of the joinder of the defendant company. They should not be treated as "costs thrown away" so as to make them then irrecoverable. On review his Lordship said[31] that the case was essentially the same as Kelly's Directories, the only difference being that the action against the defendant company had been terminated at an earlier stage. He said that it was the practice in the Chancery Division for judges to make orders at the trial dealing with the costs by making special directions in respect to "any particular costs [that] ought or ought not to be borne ..."[32]. He distinguished a case, also distinguished by the Taxing Master, which is mentioned only in the Annual Practice at that time[33], Dunn v. Northey, by saying that there the judge had held that the costs had been "thrown away" so that they could not therefore be allowed to the plaintiff. Again, Badische Anilin v. Hickson seems to have dealt with the very special case where there was no order either way in respect to the costs relating to the claim against a successful defendant other than that made against the unsuccessful defendant at trial.

[45]

Kelly's Directories was next referred to in Hobson v. Sir W.C. Leng & Co.[34] There was only a brief reference[35] to it in the judgment of Buckley, L.J., with whom Kennedy and Phillimore, L.JJ. concurred, but it was not insignificantly distinguished. The Court of Appeal was considering an action for libel against two defendants, one defendant having admitted liability, pleading an apology, while the other pleaded justification. At trial a verdict was found against both defendants for £750 and judgment entered for that sum "and costs to be taxed". It was held that, notwithstanding the generality of that order, the defendant who pleaded justification was alone liable for the costs occasioned to the plaintiff in consequence of that plea and the other defendant was not liable for those costs. Buckley, L.J. referred[36] to an argument as to which of the two judges who decided Stumm v. Dixon should be preferred. It had been argued that the opinion of Fry, L.J., who endorsed in general terms the Chancery practice as to costs of issues, should be followed, as to which Buckley, L.J. said[37]: "If this question had arisen upon a judgment of the Chancery Division I should assent". He then referred to Kelly's Directories, stating that Byrne, J. had proceeded upon the view that in the Chancery Division a general order as to the plaintiff's costs "cannot be read as excepting some costs which it is contended that the plaintiff ought not to have"[38]. His Lordship therefore held[39] that the judgment of the Divisional Court in Stumm v. Dixon should be applied so that "the costs occasioned by the separate pleading of the one defendant ought to be allowed as against him alone". In essence, therefore, the Court allowed apportionment of the costs notwithstanding the terms of the order. As to the latter practice there was much discussion in the authorities at about that time and later as to the precise powers of the taxing masters relating to costs of "the event" and the costs of issues, which need not here be examined for, as far as one can see, they did not deal with costs against successful and unsuccessful defendants: see generally the speeches in Reid Hewitt & Co. v. Joseph[40]

[70]

That is not to say, however, that in different proceedings, where there is strictly but one claim or cause of action brought against a number of defendants, other considerations might not apply. In many conventional suits in equity there was a plurality of defendants although there might not have been strictly a number of causes of action or "events" arising from their acts. I would suggest that the learned judges in Kelly's Directories and in Badische Anilin v. Hickson were viewing the plaintiff's claims in those actions as a totality and making orders in accordance with current practice relating to those claims. Doubtless that is why Daniell's Chancery Practice, and later the Annual Practice, accepted Kelly's Directories as authority for the limited propositions set out above. Whether or not that rule was applied across the board in the Chancery Division is now of no consequence, for, in my opinion, the "rule" in Kelly's Directories should now be seen as obsolete, whatever its original justification. It would therefore now be preferable in cases, where no order for costs in favour of a successful defendant is made, to spell out precisely the ambit of any costs orders made whenever other defendants are separately represented (or are unrepresented). Finally, it must always be remembered that a successful plaintiff is entitled, if granted costs, to all costs necessary and proper to the prosecution of its claim, so that any costs incurred in joining additional parties for conformity's sake (for example) may be comprehended by the order, although it is not necessary to express any concluded opinion on that subject. Certainly here the Taxing Master may properly have considered whether the joinder of the Registrar of Titles was justified so as to ensure that the Register should be properly maintained, as seems to have been the position when the proceeding commenced in 1991, but that is quite different from the circumstances arising when the statement of claim was amended so as to add the separate claim pursuant to s.110 of the Transfer of Land Act.

[73]

The Court has before it two appeals by Leo Dimos, the first defendant below, against a judgment given and orders made by two judges of the Trial Division in the one proceeding. The first appeal is against the judgment and orders of the trial judge given and made on 22 December 1997, 9 February 1998 and 27 February 1998. On the first date he granted the first respondent, Jeffrey Willetts, the plaintiff below, relief against the appellant by adjudging that moneys held in trust pursuant to an order of Gobbo, J. made 7 August 1991 be paid to the first respondent, and reserved questions of costs and interest. On the second date he dismissed the appellant's and the first respondent's claims against the second respondent, the Registrar of Titles, the second defendant below, and made orders for costs. On the third date he ordered the appellant to pay the first respondent interest of $6,003.32 pursuant to s.58 of the Supreme Court Act 1986. The second appeal, which does not concern the Registrar, is against the order of the Practice Court judge made on 12 August 1999 dismissing with costs the application of Mr. Dimos for review pursuant to Rule 63.57 of the order that the Taxing Master made on 24 June 1999. By the latter order the Taxing Master had refused the application of Mr. Dimos for review by him under Rule 63.56.1 of his interim order made 26 March 1999 taxing and allowing Mr. Willetts' costs against Mr. Dimos in the sum of $24,944.66, and had confirmed that taxation. In the taxation he had held that the trial judge's order made on 9 February 1998 that Mr. Dimos pay "the plaintiff's costs of the proceeding including reserved costs" included Mr. Willetts' costs of his unsuccessful claim against the second respondent. Besides the two appeals, the Court initially had before it an application: the trial judge having on 27 February 1998 refused leave to appeal against his above-mentioned order as to costs made on 9 February 1998, the Court of Appeal (Callaway and Kenny, JJ.A.) on 31 March 1998, had retrospectively extended the time for the making by Mr. Dimos of an application for leave to appeal against the order as to costs and had ordered that the application be heard by the Court that heard the first-mentioned appeal. The trial judge on 24 July 1998 varied his order for costs so as to make it clear that those costs were costs allowable in the Supreme Court and that Rules 63.24 and 63.25 did not apply to their taxation. This Court on 8 February 2000, during the hearing of the first-mentioned appeal, refused leave to appeal. Naturally, that refusal related to the grounds then propounded (grounds 21 to 27 in the notice of appeal), being in summary that his Honour's discretion miscarried in ordering, at first implicitly and later explicitly, that Rules 63.24 and 63.25 did not apply. I joined in refusing leave essentially because I was not satisfied of the sufficiency of the prospects of successfully challenging the exercise in this case of the wide discretion as to costs accorded to a primary judge, who necessarily has a better conspectus of the whole proceeding at first instance than this Court can have: cf. Etna v. Arif[78]. Later on 8 February 2000, during argument of the appeal from the order of the Practice Court judge, the Court entertained an oral application by senior counsel for Mr. Dimos for leave to appeal from the trial judge's order as to costs and to "revive" the general ground as to costs (ground 21) if and so far as, contrary to his submission, that order on its true construction extended to comprehend Mr. Willetts' costs of his claim against the Registrar. The Court reserved its decision on that application.

[95]

In reaching those conclusions his Honour proceeded as follows. Mr. Willetts and the Registrar were unable to point to direct evidence that the notice to caveator referred to in s.90(1) of the Act was given in this case. They relied instead upon evidence of the practice of the Land Titles Office at the time and pointed to evidence of entries made on the relevant documents in accordance with that practice. His Honour accepted the evidence of Mr. Stafford, an Assistant Registrar of Titles. Mr. Stafford stated that, when a dealing was presented for registration, it passed from the lodging area to an examiner, by whom the dealing was checked against the title. If the examiner found that there was a caveat affecting the title which forbade the registration of the dealing that had been lodged the examiner would give an instruction to another section of the Office to prepare a notice to be sent to the caveator. The dealing, title and caveat would pass to an officer with the instruction from the examiner recorded on a piece of A-4 size paper called an advice paper. It was a working document used by the staff to give instructions to one another. It would be endorsed with an indication that there was a caveat which was affected and which required a notice to be sent. The receiving officer would prepare a notice in standard form. The practice was that an original and copy notice were completed using carbon paper between the original and the copy. The officer with the responsibility to send the notice would then place the original in an envelope addressed to the caveator, attach the copy notice to the caveat and put the envelope with the enclosed notice in a tray for collection by another branch of the Office which was responsible for posting. The staff responsible for sending the notices were also responsible for awaiting responses to them. They had a stamp which they would place on the caveat in the event that the time expired without action having been taken by the caveator. It read as follows:

[110]

(a) of taking the second title because "we" were always intending to "borrow" (by which Mr. Willetts clearly meant "lend") against the whole of the Murray Road, Preston property; and

(b) that "we" would amend the mortgage to refer to the whole property to reflect the intention at all stages that the security should be over the whole property.

The mortgage documents had been received, signed by Mr. and Mrs. Konstantellos, before settlement and were not taken to settlement by the clerk but were at the time of the telephone conversation in the possession of Mr. Willetts in his office. Accordingly, as Mr. Willetts pointed out, they could not be amended at settlement by Mr. Eganides' representative on behalf of Mr. and Mrs. Konstantellos. (Although his Honour did not expressly say so, it seems the natural inference from what Mr. Willetts said in evidence that the arrangement of the basis of settlement was not an arrangement simply between Ms Brady and himself but was an arrangement that she on his behalf made with the other persons present at the settlement. Although Ms Brady had no recollection of the settlement and although Mr. Eganides had no recollection of the transaction beyond the fact that he was acting for the mortgagors and that there was a "hiccough" in it, the correctness of the inference I have suggested is supported by Mr. Willetts' evidence that in his later discussion with Mr. Eganides the earlier agreement made at settlement, whereby he would take both titles and amend the mortgage, was re-confirmed.) I return to his Honour's reasons. Mr. Willetts' instructions having been given, Ms Brady proceeded with the settlement. Having paid the required moneys, she returned to Mr. Willetts' office with the two certificates of title and the discharges of the three mortgages. Mr. Willetts gave evidence that he then spoke with Mr. Eganides as representing Mr. and Mrs. Konstantellos, and it was agreed between them that a reference to the additional certificate of title should be typed (in his office) into the description of the land in the mortgage documents.

[124]

In support of the first detailed submission numerous arguments were advanced. First, it was said that his Honour made the same error as was made by the Crown prosecutor in R. v. Clune (No.1)[90]. There the Crown prosecutor had argued that, if it was proved that the occurrence of a particular event (an interview) would, in accordance with the established practice of the persons concerned therewith, be accompanied by an entry in a book stating that the event had occurred, then proof of the existence of such an entry in the book was admissible as original evidence in proof of the occurrence of the event, the evidence of the practice enabling the inference to be drawn that the entry would not exist unless the event had occurred. The Court of Criminal Appeal rejected that proposition because the only proof of the occurrence of the event was a statement in the entry in the book and that statement was inadmissible as such proof because of the hearsay rule. The evidence of practice did no more than show that the statement in the entry was likely to be true, which was, of course, not relevant to admissibility. Here, it was argued, the notations relied upon by the trial judge were not admissible and could not be relied upon to prove the truth of the facts contained in them because they were hearsay or relied upon hearsay. There are a number of answers to this argument. It may possibly be (as another argument for Mr. Dimos asserted) that there is no statement as to posting amongst the notations and that what is relied on is an inference, based on practice, arising from the notation actually made on the caveats, which is not relied on for the truth of its contents. This was the argument in the written outline lodged for the Registrar, whose counsel the Court did not call upon. There is certainly no express statement in the notations that a notice was posted, but it may be that the argument conceals reliance upon an implied statement. I prefer to base my rejection of this argument for Mr. Dimos upon two other grounds. First, as senior counsel for Mr. Dimos frankly admitted and as is shown by the transcript of Mr. Stafford's evidence and Mr. Willetts' evidence-in-chief when the caveats were tendered, the admissibility of the notations was not objected to[91], and it does not seem to me appropriate to allow a different course on a significant matter to be taken on appeal[92]. Secondly, although the Evidence Act 1958 was not referred to during argument, if Mr. Dimos were to be permitted on appeal to change his stance, it would be equally permissible to say that the notations were, in my view, admissible by virtue of s.55(1)(b) of the last-mentioned Act, read with the definitions of "business" and "statement" in s.3(1), and taken with the dispensation from calling the supplier of information that is contained, in the case of the first caveat[93], in s.55(6) and, in the case of the other caveat[94], in s.55(5)(c). On this argument I would add that, in giving my reasons for rejecting it, I have tacitly treated Clune (No.1) as capable of application to a civil case. But it must be stressed that the Court there was concerned with the criminal standard of proof and that full allowance must be made for that fact.

[131]

As to reason (d) it is true that the evidence did not disclose the practice of the Office with regard to the place of posting and the payment of postage. Mr. Dimos relies in particular upon the terms of s.49(1)(a) of the Interpretation of Legislation Act 1984, which provided an interpretation of the reference to sending by post which s.113(1) of the Transfer of Land Act authorised for a notice required to be given under s.90(1) of that Act. By s.49(1) the service was to be deemed to be effected by properly addressing, pre-paying and posting the document as a letter to the person on whom it was to be served. The point now under consideration appears not to have been taken below. Certainly it was not discussed by his Honour. Assuming, as I am inclined to think is correct, that it can now be raised, I would say that the evidence entitled his Honour to infer on the balance of probabilities, as in my view he implicitly did, that when put into the course of post the letters were in a state as regards postage that was acceptable to Australia Post, that is, they were in a condition in which Australia Post was prepared to carry and deliver them rather than reject them or require payment of more than the amount of postage as a condition of delivery to the addressee. There is, it is true, the possibility that, in the case of an organisation such as the Land Titles Office, its outward mail, rather than having adhesive postage stamps affixed to each letter, was franked or otherwise posted in bulk. The Oxford English Dictionary (2nd edn.) shows that the original meaning of the verb "frank" was to superscribe (a letter, etc.) with a signature, so as to ensure its being sent without charge, but that the word was revived in later use with the meaning, to mark (a letter, etc.) with a sign (in lieu of an affixed postage stamp) by means of a franking machine. The latter expression is defined in the same work as, "An officially authorized machine, introduced by the British Post Office in 1922, used by large concerns for `stamping' letters, etc., with a sign (in lieu of an affixed postage stamp); it simultaneously records the cost of postage (this being periodically checked and collected by the Post Office)"[98]. Amongst the illustrations of the use of the word is a passage from the Encyclopaedia Britannica (1929), vol. xviii, 311, which in part states, "These machines impress the correspondence with a red franking stamp which is accepted as the equivalent of a postage stamp."[99]. Since the argument for Mr. Dimos was not developed, it may not be necessary to resolve this aspect. If, however, it is necessary, I would acknowledge that it is a matter of speculation whether the Office's letters had postage stamps affixed or were franked in a franking machine used in the Office or posted in some way in bulk at a post office and also, in the latter cases, when payment of postage was made. But, in so far as the Office used a franking machine and did so otherwise than on an imprest system, I would say that the better view of s.49(1)(a) and like provisions is that service of a properly addressed letter which has been duly franked is deemed to be effected by posting it. That conclusion may be reached on two bases. First, whilst the statutory provision stated that service "shall" be deemed to be effected in a certain circumstance, it was not exhaustive. Secondly, having regard to postal development since s.26 of the Interpretation Act 1889 (Imp.) was enacted and in particular to the fact that an impression made or "stamped" by a franking machine is treated as the equivalent of a postage stamp[100], no doubt because payment is made in advance or at that time or because the entity franking the letter has made arrangements[101] for payment in arrears to the satisfaction of the postal authority, the word "prepaying" is now to be read widely. If neither basis were correct, the beneficial statutory provisions for proof of service would not be capable of application to vast amounts of mail.

[138]

It was contended for Mr. Dimos that the question here was not solely whether the addition was made with the necessary consents but also whether the consents, if given, were given in the appropriate form. The first limb of the argument is alone covered by the single relevant ground of appeal. As to it, a number of arguments were advanced in favour of the conclusion that his Honour erred in finding that an agreement had been made with the solicitors for Mr. and Mrs. Konstantellos authorising the alteration of the mortgage by the addition to it of a reference to title two. It was said, for instance, that the evidence was too vague and uncertain and that the evidence of Mr. Willetts as to his conversation with Mr. Eganides was clearly inconsistent with his answers to interrogatories in several of which he said, without referring to that conversation, that he was unable to answer further. I have considered the various arguments advanced in writing and orally. I am quite unpersuaded that his Honour erred in finding that the alteration was authorised by the solicitors for Mr. and Mrs. Konstantellos. Besides the considerations on which his Honour relied, I mention that, in response to a question from the Bench whether Mr. and Mrs. Konstantellos had ever said that Mr. Eganides proceeded on a wrong basis in agreeing with Mr. Willetts as to the manner of alteration (and thereby confirming the agreement made at settlement for alteration), senior counsel for Mr. Dimos informed us that they had not. Further, when called by counsel for Mr. Willetts, Mr. Konstantellos volunteered in evidence-in-chief that Mr. Willetts said to him, "I give you the money, but I want the house for security."[106]. Mr. Konstantellos said in chief and when cross-examined on behalf of Mr. Dimos that the house (meaning, the house building at 179 Murray Road Preston) was built on two titles. It is true that in response to strong leading questions in cross-examination for Mr. Dimos Mr. Konstantellos said that he told Mr. Dimos to keep the smaller title and that he would use the bigger title to raise some money on, but the evidence-in-chief reads much more persuasively. Contrary to a submission from Mr. Dimos, I consider that his Honour was entitled to proceed on the footing that Mr. and Mrs. Konstantellos intended to mortgage the land in both titles to Mr. Willetts, so that the agreement which Mr. Eganides' representative made and the subsequent arrangement as to the mechanics of alteration which Mr. Eganides himself made were in pursuance of his clients' intention and, indeed, of their agreement with Mr. Willetts; for it would seem that Mr. Willetts and Mr. Konstantellos had agreed upon a loan on the security of the property at 179 Murray Street Preston, which, although Mr. Willetts did not know it at the time, consisted of two titles. I would add this important observation. The argument seemed to assume that it was for Mr. Willetts to show that the alteration was made with authority. In fact, the onus was on Mr. Dimos to show that it was made without authority, for it was he who had introduced the question of authority into the pleadings by alleging as a foundation for his counterclaim against Mr. Willetts that the mortgage had been amended without authority. I am amply satisfied that he failed to make that out.

[149]

Counsel for Mr. Willetts contended that the word "creditor" should be given a broad meaning in the context of s.58 and was simply a shorthand method for denoting a successful plaintiff or someone who recovers a sum certain.[120] If that be so, one may ask why the word "plaintiff" or "claimant" was not used instead of the somewhat more specific word "creditor". The use of the word "plaintiff" in the passage cited from Clarke v. Foodland Stores Pty. Ltd. did not, and could not, mean that every plaintiff was within s.58(1): the Court was of course speaking in general terms, without reference to the present point. Further, if there is a creditor there must, it seems incontrovertible, be a debtor[121]. On one view, supported by the source of the moneys in question, the debtors were Mr. and Mrs. Konstantellos, the holding of the money on trust simply being a temporary mechanism while the rival claims to the proceeds of sale of the mortgaged property were determined. If one concentrates, however, on the trust mechanism employed, the person liable to make payment to Mr. Willetts was the trustee of the fund, namely, Mr. Willetts himself. But it was against Mr. Dimos that his Honour made the award of interest. If the moneys had been held by a third party, could that person, it may be asked rhetorically, have been ordered to pay interest? If not, on what basis could Mr. Dimos in that case have been so ordered? Again, a person entitled to a debt or sum certain is able to sue the person liable to pay the debt or sum certain, the debtor or obligor. But Mr. Willetts could not and did not sue Mr. Dimos for the sum, which he already held. To the foregoing must be added the fact that ordinarily at the very least a beneficiary is not a creditor of his trustee. No case was cited, and I have found none, applying "creditor" to the present facts. It is true that the expression "the creditor" must here have a meaning apt to "sum certain" as well as to "debt", but the whole context of the section points to amounts which defendants are liable to pay (and, as I will shortly show, liable from at least the commencement of the proceeding).

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