APPEAL - APPLICATION FOR LEAVE TO APPEAL - Whether appeal arguable - Appeal from Magistrates Court

Ikoro v Ezekiel-Hart (ACT Magistrates Court, EM 260/2017, 17 July 2017)

Ezekiel-Hart v Ikoro (ACT Magistrates Court, CS 22/2018, 1 February 2018)

1. On 28 November 2019, the applicant sought leave to appeal out of time against orders made on 14 October 2019 by Magistrate Lawton (the Magistrate), whereby his Honour entered judgment against the applicant and required him to pay the respondents' costs.

2. These Magistrates Court proceedings and earlier proceedings in the ACT Civil and Administrative Tribunal (ACAT) concerned a tenancy arrangement between the applicant (as lessee) and the respondents (as lessors).

3. On the application for leave to appeal, the issues are:

(a) Whether the applicant has adequately explained the failure to lodge an appeal within time.

(b) Whether there is an arguable case to be advanced on the proposed appeal.

(c) If the applicant is granted leave to appeal, whether he should be permitted to call additional evidence on the appeal.

4. The applicant said that that the delay in lodging the appeal was due to "various circumstances and children [sic] health".

5. At the hearing of the application, the respondents conceded that there had been very little delay in prosecuting an appeal; the appeal period had expired on 11 November 2019 and, on 12 November 2019, the applicant had notified the respondents that he wished to appeal. Instead, the respondents argued that the proposed appeal was devoid of merit.

6. In January 2016, the applicant and the respondents agreed that the applicant would occupy the respondents' premises at 31 Castieau St, Higgins ACT. The premises required repair. Between January and March 2016, the applicant used the premises, communicating with the respondents concerning tradesmen and the undertaking of repairs. In April 2016, the parties signed a residential tenancy agreement.

7. In March 2017, the respondents brought proceedings in ACAT, claiming cleaning expenses and unpaid rent from the applicant. The proceedings were heard on 3 July 2017. ACAT made an order in favour of the respondents in the sum of $2,353.05.

8. In the ACAT proceedings, the applicant filed a partly drafted counterclaim seeking $27,520 for monies paid and services rendered to the respondents. ACAT declined to deal with the counterclaim; it had not been formally filed and the amount mentioned in the counterclaim exceeded the jurisdictional limit.

9. At the time of the ACAT proceedings, the applicant was an undischarged bankrupt. In August 2017, he was discharged from bankruptcy.

10. In July 2017, the respondents commenced proceedings in the Magistrates Court for the purpose of enforcing the ACAT order: Ikoro v Ezekiel-Hart (ACT Magistrates Court, EM 260/2017, 17 July 2017) (EM 260/2017). In January 2018, they obtained a sale and seizure order for the applicant's motor vehicle.

11. In February 2018, the applicant filed an application to stay the sale and seizure order, contending that the enforcement proceedings related to an action taken when he was an undischarged bankrupt in relation to which the Trustee in Bankruptcy should have been notified but was not.

12. In February 2018, the applicant also lodged an originating claim in the Magistrates Court, demanding a debt or liquidated damages for monies expended on behalf of the respondents and services provided to them: Ezekiel-Hart v Ikoro (ACT Magistrates Court, CS 22/2018, 1 February 2018) (CS 22/2018). This claim revisited the issues canvassed in the draft ACAT counterclaim, which he had not pursued. On 3 April 2018, the applicant obtained default judgment.

13. On the respondents' application, on 18 April 2018, the Magistrates Court set aside the default judgment and made a costs order in favour of the respondents.

14. On 10 May 2018, in proceedings EM 260/2017, Magistrate Morrison rejected the applicant's arguments about the impact of bankruptcy on the enforcement proceedings and declined to stay the proceedings. A number of costs orders were made In the enforcement proceedings.

15. When the applicant's vehicle was seized and sold, it failed to realise the anticipated sale price and the sum realised was inadequate to satisfy the original debt, together with interest and costs.

16. The original pleadings in proceedings CS 22/2018 were struck out and, on 4 May 2018, the applicant filed an amended claim.

17. On 27 and 28 June 2019, the Magistrate heard the proceedings.

18. During the hearing, his Honour struck out the claims made in paragraph 3(1), (2) and (4) of the amended claim on the basis that those matters had been the subject of the ACAT hearing and were res judicata. His Honour also struck out sub-paragraph (15), which claimed damages for time lost in relation to the use of a vehicle that had been unlawfully seized; his Honour said that the applicant had produced no evidence to support the proposition that the vehicle had been unlawfully seized. His Honour struck out sub-paragraphs (10), (11) and (12), which involved claims for legal services rendered at a time when the applicant did not hold a practising certificate.

19. At the close of the applicant's case, his Honour was unclear as to the basis upon which the applicant advanced the remainder of his claim. Consequently, his Honour proposed the filing of written submissions. His Honour said:

[W]e might fix a date for Mr Ezekiel-Hart to put submissions in writing as to what his pleading - what he pleads are the equitable bases on which he says he is entitled to or availed of the equitable compensation ... [W]ithout prejudging the issue, if I rule for example that his pleadings are insufficient, and that at the close of his evidence there isn't a basis for me to go further, that may end the matter. But by the same token, I'm conscious that he may persuade me on some equitable basis in which case [the respondents] might seek to go into evidence.

21. His Honour fixed a timetable for the filing of written submissions and adjourned the matter for any further hearing on 25 October 2019. His Honour said:

[I]f I can get a decision and make a ruling before then I'll notify the parties and if the date of the 25th is no longer required we can vacate it ... I'll be keen to give you a ruling one way or the other as soon as I can so that that time can be used for other purposes if necessary, or used for this matter if it's required.

22. The applicant filed written submissions indicating that his claim for compensation was based on unjust enrichment. During the hearing in June 2019, he had conceded that there was no oral or written agreement concerning compensation for services provided to the respondents.

23. The respondents emailed the applicant, noting that they reserved their position in relation to the calling of evidence. The applicant took this to mean that they would call further evidence, providing him with the opportunity to cross-examine them.

24. After considering the written submissions, the Magistrate determined that the hearing date of 25 October 2019 was not required as the applicant had not established a prima facie case. In oral reasons delivered on 14 October 2019, his Honour observed:

(a) In and of itself, unjust enrichment was not a cause of action.

(b) There was an issue as to whether, on the balance of probabilities, the applicant had conducted himself in the manner claimed and, if so, whether the applicant's actions had enriched the respondents in circumstances that made it unconscionable for the respondents to retain the benefit of the enrichment.

(c) His Honour was not satisfied that the applicant had undertaken the cleaning that he claimed, nor was he satisfied that the respondents had been unjustly enriched by any such cleaning. If such cleaning had occurred, then either it was part of an arrangement whereby the applicant resided rent-free at the premises, or it was part of his obligations as a tenant to keep the premises tidy.

(d) To the extent that the applicant may have supervised any repairs to the premises, overseen the collection of waste, or attended to the disconnection of a dishwasher, he had not done so at the respondents' request, and any such services had not resulted in unjust enrichment to the respondents.

(e) If the applicant had changed door locks, this action had not been undertaken at the request of the respondents.

(f) The applicant's telephone bill had not been affected by any calls that he had made or text messages that he had sent on behalf of the respondents; the applicant paid a fixed amount per month and any calls or text messages had not increased that amount.

25. The respondents sought 80 per cent of their actual costs and asked the Magistrate to specify the amount of the order. They produced invoices and a costs agreement.

26. The applicant opposed any order for costs, submitting that it was inappropriate for the Magistrate to make such an order for two reasons. First, there had been no cross-examination of the respondents, which would have permitted the applicant to clarify his case. Second, the ACAT decision was tainted by fraud because the respondents had claimed a weekly rent of $260 rather than the agreed amount of $230.

(a) In May 2018, the respondents had written to the applicant, asserting that his claim was doomed to fail and foreshadowing that costs would be sought on an indemnity basis.

(b) The applicant had failed to comply with court orders, including orders of the filing of documents, putting the respondents to the expense of preparing a court book and tender bundle.

(c) He had peremptorily struck out some aspect of the claim.

(d) There was no merit in the applicant's submission that costs should be refused because he had been deprived of the opportunity of cross-examining the respondent. On the basis of the evidence called in the applicant's case, his Honour was not satisfied that the case was made out.

(e) The applicant's allegation of fraud tainting the ACAT decision should have been agitated by way of a challenge to the ACAT decision rather than a belated argument in the proceedings before his Honour.

28. In those circumstances, his Honour considered that it was appropriate to order costs "on an indemnity basis" and, based on the documents provided, his Honour made an order under r 1720(3)(c) of the Court Procedure Rules 2006 (ACT) that the applicant pay the respondents' costs in the sum of $13,339.86.

29. The draft notice of appeal (provided with the application for leave to appeal) proposed nine grounds of appeal. At the hearing of the application, the applicant agreed that gravamen of the grounds was as follows.

30. First, the applicant contended that he had been denied procedural fairness. He relied on the fact that, at the conclusion of the hearing in June 2019, the Magistrate had adjourned the hearing to October 2019. The applicant had anticipated that, in October 2019, the respondents would give evidence and that he would have the opportunity to cross examine them, demonstrating that they were liars. The applicant conceded that, in June 2019, the Magistrate had indicated that he may be able to decide the matter based on the written submissions, without the need for further evidence. However, the applicant said that, when he received the respondents' email stating that they reserved their position in relation to the calling of evidence, he had felt reassured that he would have the opportunity to cross-examine them during a resumed hearing in October 2019.

31. Second, the applicant contended that the Magistrate had made incorrect findings of fact concerning the work undertaken by him. In connection with this proposed ground of appeal, the applicant sought leave to put further evidence before the Supreme Court to support factual contentions in relation to which the Magistrate had found that there was inadequate evidence to substantiate the applicant's assertions.

32. Third, the applicant claimed that the Magistrate should have entertained his claim that the ACAT proceedings had been infected by fraud on the part of the respondents.

33. Fourth, the applicant claimed that a costs order should not have been made in association with the setting aside of default judgment on 18 April 2018. The applicant said that he had made all reasonable efforts to resolve the dispute in that he had offered to surrender his vehicle to the respondents, despite the fact that, in his opinion, the vehicle was worth significantly more than the ACAT judgment amount.

34. Fifth, the applicant claimed that Magistrate Morrison had erred in failing to stay the enforcement proceedings arising from the ACAT proceedings in relation to which the Trustee in Bankruptcy had not been notified.

35. None of the proposed grounds of appeal are arguable.

36. The applicant was not denied procedural fairness. The applicant himself conceded that, at the conclusion of his case in June 2019, the Magistrate made it clear that the proceedings may be decided on the evidence called in the applicant's case and the written submissions. Consequently, it was possible that the date for a resumed hearing would be vacated. The respondents' email to the applicant indicating that they reserved their rights in relation to any resumed hearing was a statement of the obvious. To the extent that the email caused the applicant to misapprehend the situation, that misapprehension was unreasonable and was not caused by any conduct on the part of the Magistrate. In any event, the applicant did not lose the right to cross-examine the respondents. Given the poverty of the applicant's evidence, it is highly unlikely that they would have been called to give evidence at any resumed hearing.

37. As to the applicant's second principal contention - that the Magistrate made incorrect factual findings concerning the work undertaken by him - the applicant did not particularise or seek to explain the respects in which the Magistrate had made incorrect factual findings. Rather, the applicant made a sweeping assertion of general error.

38. The Magistrate's reasons for decision reveal limited findings of fact concerning whether work was undertaken by the applicant. In the case of most of the applicant's claims, his Honour confined himself to observing that the applicant had failed to establish that, on the balance of probabilities, the asserted conduct had occurred; his Honour did not find affirmatively that such conduct did not occur.

39. The applicant's associated application for leave to adduce additional evidence for the purpose of proving that claimed services were rendered contains an implied concession that inadequate evidence was adduced at first instance. In addition, the applicant's disappointment at being unable to cross-examine the respondents to "prove that they are liars" suggests that, despite his legal training, the applicant may not fully appreciate that the onus was on him to prove his case on the balance of probabilities.

40. The applicant has not established that there is an arguable case that the Magistrate erroneously determined that the evidence before him was inadequate to establish that the asserted conduct had occurred.

41. But that is not the end of the matter. In relation to most, if not all, conduct that was relied upon, the applicant's case faltered not only because the Magistrate was not satisfied that the conduct had occurred, but also because his Honour found that, even if it had occurred, it did not enrich the respondents.

42. As to the applicant's complaint that the ACAT proceedings were infected by fraud, the Magistrate rightly determined that it should have been pursued in connection with the ACAT proceedings, not in connection with the proceedings before him.

43. As to the complaint about the costs order associated with setting aside default judgment, it seems clear that the applicant had no basis for claiming a liquidated amount and that default judgment was properly set aside. In those circumstances, a costs order was to be expected.

44. Finally, these proceedings cannot be used to appeal against orders made in other proceedings. Magistrate Morrison refused a stay in the enforcement proceedings, which were separate proceedings. Further, it was in May 2018 that his Honour refused the stay. Any appeal against that order would be well out of time.

46. The application for leave to appeal is refused. The Magistrate's orders are confirmed.

47. Prima facie, the applicant should pay the respondents' costs.

48. Within 14 days from today, either party may file and serve on the other party written submissions as to why a different costs order should be made. If any submission is filed and served, within a further 7 days (21 days from today) the other party may file and serve a submission in response. No submission is to exceed two pages in length. If no submission is received, the order will be that the applicant pay the respondents' costs.

I certify that the preceding forty-eight [48] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice Murrell.