Girgis v Oueik

Court of Appeal (NSW)|2018-12-14|Before: McColl JA

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

THE COURT: By summons filed on 24 September 2018, Mr Michael Girgis seeks leave to appeal against Wilson SC DCJ's orders of 22 June 2018 entering judgment for the first respondent, Mr Ronney Oueik, in the sum of $81,042.35 including interest. [1] Leave to appeal is required because the judgment does not involve a matter at issue amounting to or of the value of $100,000. [2]

Primary judgment

There was no written contract between the parties. Their agreement was said to arise from a conversation which took place between Mr Oueik and Mr Girgis in or about December 2015. As the primary judge noted, "[l]ike virtually every other factual matter in these proceedings, the terms of the contract and the content of the discussions that took place at that time are disputed". [6] It was common ground at the trial, which ran for four days in November and December 2017, that the factual controversy could only be resolved by the primary judge finding either Mr Oueik or Mr Girgis was lying. [7]
The primary judge accepted Mr Oueik's version of the agreement, finding that Mr Girgis's evidence was "inconsistent and vague", [8] "evasive and convoluted", [9] that he was "attempting to confuse the court", [10] and that it "became obvious [he] had changed his evidence" in respect of the critical question being the expenses he was authorised to charge to Mr Oueik's credit card. [11] He found Mr Oueik to have been "a credible and reliable witness" who did his best to answer questions honestly.
Although the primary judge accepted Mr Oueik's version of the agreement, he nevertheless held that the terms of the contract were not sufficiently precise or certain to be binding on the parties [12] and must be void for uncertainty. [13]
Accordingly, his Honour resolved the issue of the amount outstanding between the parties on a quantum meruit basis.
In order to meet Mr Girgis's quantum meruit claim, Mr Oueik called a Mr Scott Myles, director of Independent Consultancy Services, to give expert evidence "directed to the costs of installing a security system". [14] His Honour held that Mr Myles was appropriately qualified to give evidence in respect of such matters. [15]
Mr Myles' view was that the amounts Mr Girgis charged were "excessive 'when compared to industry norms'." [16] He also said that the 15% margin Mr Oueik claimed had been agreed was "definitely low". [17]
Overall, the primary judge found Mr Myles "demonstrated both knowledge and impartiality" and that his expert opinion was "fair, rational and reasonable". [18] Accordingly, his Honour had no hesitation in accepting his opinion that the quantum meruit should be calculated on an "industry standard margin" of 30%. [19]
Finally his Honour held that BBC and ABBA were not parties to the agreement and dismissed the claims by and against them. [20]
The primary judge found Mr Oueik had paid $140,863.58 comprising the credit card debits, the BBC cheque and the Local Court judgment. He accepted Mr Myles' evidence that the costs and value of the quantum meruit claim was $61,120.90 (plus GST). After setting off the quantum meruit against the total amount Mr Oueik had paid Mr Girgis, Mr Oueik was entitled to damages of $73,630.58 (plus interest) and costs. [21]
On 1 August 2018, the primary judge gave judgment for Mr Oueik against Mr Girgis in the sum of $81,042.35 and ordered Mr Girgis to pay Mr Oueik's costs as agreed or assessed. He also directed the Registrar of the District Court to refer the pleadings, exhibits and transcript to the Office of the Director of Prosecutions (ODPP) to consider whether Mr Girgis should be charged in respect of potential criminal conduct referred to in his reasons, arising from the use of Mr Oueik's credit card, and swearing an affidavit in the Local Court which he knew to be false and perjury.
On 19 July 2018 Mr Girgis filed a notice of intention to appeal which advised his intention to appeal before 22 September 2018. In fact, 22 September 2018 was a Saturday. His summons seeking leave to appeal was filed on 24 September 2018. Accordingly it was filed in time. [22]
After the primary judgment was delivered, Mr Girgis also sought a stay of the judgment and to set aside the ODPP referral, applications which apparently went for a day and a half in July and August 2018. He also sought a non-publication order, again in July 2018. He was unsuccessful in all respects.

Complaint to the Judicial Commission

On 22 March 2018, while the primary judge's decision was reserved, Mr Girgis wrote to the Judicial Commission of New South Wales making various allegations of bias in relation to the primary judge's conduct at the hearing. It is unnecessary to detail those allegations. He did not suggest in that letter, at trial or in any of the several applications to the primary judge to which we have referred that his Honour should recuse himself.
After judgment was delivered on 22 June 2018, Mr Girgis became aware that the Judicial Commission had forwarded the complaint to the primary judge on 18 April 2018.
Mr Girgis notes that the primary judge did not refer to the complaint in his reasons or otherwise disclose its receipt to the parties before delivery of the primary judgment.

Leave application

Mr Girgis contends that leave to appeal should be granted on several bases. The first was that there was a reasonable apprehension of bias. The second was the admission of the expert evidence. The third was asserted factual errors in the calculation of the quantum meruit. Others concerned findings of fraud, lying under oath; and, generally, the primary judge's rejection of his evidence as to the terms of the agreement, the cost of goods and services and the quantum meruit for such goods and services.
Mr Oueik opposes leave to appeal and contends that the issue Mr Girgis raises concerning the quantum meruit calculations would, if successful, make a difference of $6044.56 to the judgment amount, a calculation which Mr Girgis accepts.

Applicant's submissions

Mr Girgis submits that leave should be granted for the following reasons.
First, because the amount at stake is significant and, if his evidence as to the terms of the agreement or the quantum meruit for goods and services is accepted, he will be relieved of the entire judgment below.
Secondly, Mr Girgis submits there is a sound case that the primary judgment is affected by one or more legal or factual errors.
Mr Girgis submits that apprehended bias arises due to his having sent his complaint to the Judicial Commission which, in turn, had forwarded it to the primary judge before judgment was delivered. He says the complaint went beyond a "robust critique" and that by not disclosing and dealing with the complaint his Honour did not dispel the apprehension of bias arising from its receipt. Mr Girgis submits he has not waived the right to complain about bias by not seeking the primary judge's recusal, as the circumstances of apprehended bias did not occur while the trial was continuing and the primary judge did not disclose the complaint. That proposition is incorrect. The complaint concerned the manner in which the primary judge had conducted the hearing.
Secondly, Mr Girgis submits Mr Myles lacked the expertise to support his opinion that the "industry standard margin" was 30% and that his opinion was not set out sufficiently to satisfy Makita (Australia) Pty Ltd v Sprowles. [23] On a factual basis, Mr Girgis submits his Honour erred in deriving the quantum meruit adopting such a margin. He complains the primary judge treated the terms "mark-up" and "margin" interchangeably.
Mr Girgis submits the evidence did not establish he deliberately and fraudulently used Mr Oueik's credit card, contending, "[s]o flagrant a fraud would have been most surprising". He submits the finding of swearing a false affidavit does not go so far as to establish anything more than a poorly worded affidavit. He submits that the terms of the agreement and the quantum meruit were based on those erroneous findings and that his documentary evidence, which he did not identify, ought to have been preferred to the hypothetical evidence of Mr Myles.
Thirdly, Mr Girgis submits he will suffer a significant injustice if leave is not granted, including continuing liability for a significant amount of money, stress and concern arising from having been referred to the ODPP for investigation and the opprobrium of the primary judge's findings of fraud and perjury. [24]

Respondent's submissions

Mr Oueik submits leave to appeal should be refused because the appeal was filed late and leave has not been sought to extend time; the prospects of success are weak and the arguments advanced fail to establish the primary judge was arguably wrong; and the allegations of apprehended bias were unfounded and "caused by" Mr Girgis.
Mr Oueik also contends that given the limited amount in dispute, there is no question of principle or matter of general public importance or injustice which outweighs the importance of finality to this litigation. He contends that the costs are likely to swamp the amount in issue. He points out that Mr Girgis himself has claimed he is impecunious and unable to pay the judgment and that his application to pay it by instalments had been rejected on the basis the financial statements he filed in support did not demonstrate his capacity to pay the instalments offered.
Mr Oueik submits that Mr Girgis's "spurious complaint" to the Judicial Commission was a "flagrant and deliberate" attempt to set up an allegation of bias. He submits that the implicit suggestion in Mr Girgis's submissions that he did not know his complaint would be provided to the primary judge should be rejected as the complaint itself refers to "the reality of the risk" of making such a complaint. Mr Oueik submits that there is no basis on which an inference of a reasonable apprehension of bias from the fact of the primary judge not disclosing the complaint could be made.
Further, Mr Oueik submits that Mr Girgis has waived his right to complain of bias as he failed to raise the allegation at trial or in two notices of motion filed on 4 July 2018 (seeking non-publication orders) and 19 July 2018 (seeking a stay and setting aside order 6) and determined by Wilson SC DCJ.

Admissibility of evidence/calculation of the quantum meruit claim

Mr Oueik notes that Mr Myles's expertise was determined through a voir dire. In addition, Mr Girgis's counsel's cross-examination of Mr Myles on the margin issue was limited to the following exchange: "Q. There you say also that 30% is regarded as an industry norm - A. Mm-hmm. Q. --and this is based on your experience is it? A. Correct."
Further, he points out Mr Girgis's counsel accepted the matter should proceed on the basis of a 30% margin on the quantum meruit claim which should be applied to the base cost of labour and equipment. Mr Oueik submits that having not objected to the 30% figure at the hearing, and having encouraged its use in the determination of the issues (which resulted in orders that the parties prepare tables of submissions using calculations based on a 30% margin), Mr Girgis should not now be permitted to run an argument on appeal which conflicts with his conduct of the trial.
Mr Oueik submits that even if Mr Girgis is correct about the calculation of the quantum meruit claim this would lead only to an alteration of the judgment in the sum of $6,044.56, which Mr Oueik contends is not a significant sum.

Findings of a false affidavit, lying under oath and fraudulent use of a credit card

Mr Oueik submits there was a proper basis for all the findings on these matters.
He submits there was ample evidence to infer his credit card had been used fraudulently. There was no correlation between Mr Girgis's expenses and the amounts charged to his credit card. [25] Indeed, he points out that on two occasions during his evidence, Mr Girgis sought certificates under s 128 of the Evidence Act 1995 (NSW). Further, Mr Girgis admitted that the affidavit he relied on in the Local Court proceedings was false. Mr Girgis had chased up payment of the invoice of $11,350.63 without disclosing that he had already charged $54,000 to Mr Oueik's credit card.
Mr Oueik submits that Mr Girgis has not identified any uncontroverted testimony or contemporaneous documents that would compel the acceptance of his evidence. He submits it is not clear how the primary judge could arguably be wrong in making his credit-based finding as to the evidence the credit card had been used fraudulently.

Reply submissions

Mr Girgis acknowledges the amount in dispute is below the statutory threshold, but submits that the bias point puts the entire judgment amount at stake.
Mr Girgis submits that apprehension of bias remained a live issue through the period the primary judgment was reserved; there is no evidence that the complaint was a deliberate attempt to create the apprehension of bias; nor is there evidence he was subjectively aware the complaint would be forwarded to the primary judge. He filed an affidavit affirmed on 3 December 2018 in which he asserted he did not send the complaint about the primary judge to the Judicial Commission for the purpose of creating an apprehension of bias or to create an appeal point in the event he lost the case.

Consideration

For present purposes, we accept that a copy of Mr Girgis's complaint to the Judicial Commission was forwarded to the primary judge on 18 April 2018. We do not accept that the primary judge's failure to refer to that complaint in the primary judgment creates any reasonable apprehension of bias on his Honour's part or raises an arguable issue that such a conclusion might be warranted.
We do not accept that the mere fact of receipt of a complaint means that his Honour was not "capable of putting such allegations out of his … mind in the further determination of the case". [26] As we have noted, the complaint did not suggest that the matters to which it referred meant the primary judge ought to recuse himself. That would be a serious step for his Honour to have taken after a trial of 4 days in which it appears none of the matters the subject of the letter had been the subject of complaint. Although the complaint was made on 22 March 2018, Mr Girgis made no attempt to apply to the judge to recuse himself. Judgment was delivered on 22 June.
In our view, the primary judge would have been entitled to form the view that Mr Girgis had waived any right to seek the recusal of the judge on the basis of the matters he alleged had occurred in the course of the trial, [27] or, at least, did not object to his Honour proceeding to determine the case. His Honour was also entitled to form the view that if Mr Girgis was of the view that any matters in the complaint might affect his determination of the case, it was open to him to draw those matters to Mr Oueik's attention and ask that the court be reconvened to determine whether his Honour ought to recuse himself.
It is a curious submission, in our view, that absent any of these circumstances, the mere failure of the primary judge to refer to the complaint in his reasons meant that his Honour was disqualified from taking a step he was not asked to: namely, refrain from determining the case.
In our view, Mr Girgis has not identified any matter, on an objective basis, which would demonstrate that the mere receipt by the primary judge of the complaint, and his Honour's failure to disclose it, gave rise to an apprehension of bias, let alone the implicit submission that his Honour had not brought an impartial mind to bear upon the issues to be decided. [28]
Secondly, Mr Girgis's complaint about the primary judge's use of the "industry standard margin of 30%" was clearly not the approach he took at trial. Once the objection to Mr Myles's expertise was resolved (and Mr Girgis has not identified any reason to conclude there was any arguable error on his Honour's decision in that respect), it is apparent that Mr Girgis's counsel did not challenge in any, or in any effective way, Mr Myles' opinion about the 30% margin.
Further, as Mr Oueik submits, Mr Girgis's counsel accepted, in response to a question from the primary judge, that it was correct to "determine the base cost of labour and equipment and apply a 30% margin to that." The suggestion that the primary judge confused the notion of a "mark up" and a "margin" is not a matter which could arguably be challenged if leave were to be granted.
Thirdly, insofar as Mr Girgis complains that the primary judge erred as a matter of fact in rejecting his evidence concerning the agreement with Mr Oueik, it is sufficient to note that the primary judge completely rejected Mr Girgis as a witness of truth. Mr Girgis has not identified any incontrovertible facts or uncontested testimony which demonstrate, on even an arguable basis, that the primary judge's conclusion in this respect was erroneous. [29]
Fourthly, insofar as Mr Girgis seeks to complain about the injustice he will suffer if the primary judge's findings of fraud and perjury remain, while that may be a legitimate consideration, "it is not the law that anyone who has been found dishonest should be granted leave to appeal." [30]
The same can be said about Mr Girgis's concern about the matter having been referred to the ODPP for investigation. This court will not lightly interfere with a conclusion of a primary judge that the evidence disclosed matters which warranted investigation in that context. In any event, as we have said, Mr Girgis has not identified any arguable basis upon which it might be found that the primary judge erred in failing to accept him as a witness of truth nor, we would add, in concluding that Mr Girgis had engaged in criminal conduct arising from the use of Mr Oueik's credit card and by swearing an affidavit in the Local Court which he knew to be false and lying under oath.
Mr Girgis submits that acceptance of his submission that there was an apprehension of bias could lead to the primary judgment being set aside. Even if that were the case, it would be only be on the basis that there should be a new trial. Having regard to the fact that Mr Girgis does not dispute that, at best, even on his quantum meruit claim he would could only improve his position by an amount of $6,044.56, and having regard to the costs which have already been expended on this dispute, that is another reason for refusing leave to appeal. Where small claims are involved there must be early finality and determination of the litigation, otherwise the costs involved are likely to and in this case, clearly would, swamp the money sum involved in the dispute. [31]
In our view, Mr Girgis has not demonstrated any substantial reason warranting appellate review of the primary judgement. In particular, he has not demonstrated any error of principle which if uncorrected will result in substantial injustice. In such circumstances, there being only a small amount in issue, leave to appeal should be refused with costs. [32]

Endnotes

Oueik v Girgis (District Court (NSW), unrep, 22 June 2018).
District Court Act 1973 (NSW), s 127(2)(c)(i).
For convenience, unless the context otherwise requires, we refer to the respondents together as "Mr Oueik".
Primary judgment at [48].
Ibid at [63].
Ibid at [3].
Ibid at [43].
Ibid at [79].
Ibid at [90].
Ibid.
Ibid at [92].
Ibid at [152].
Ibid at [155].
Ibid at [122].
Ibid.
Ibid at [124].
Ibid at [126].
Ibid at [148].
Ibid at [127].
Ibid at [166].
Ibid at [158] - [165].
Interpretation Act 1987 (NSW) s 36(2)(b).
(2001) 52 NSWLR 705; [2001] NSWCA 305.
At [156].
Primary judgment at [94] - [99].
Kumargamage v Rallis (No 2) [2001] NSWSC 710 at [21] per Austin J.
Vakauta v Kelly (1989) 167 CLR 568 at 577 - 579 per Dawson J; at 587 - 588 per Toohey J (Brennan, Deane and Gaudron JJ agreeing); [1989] HCA 44.
Michael Wilson & Partners Limited v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at [67] per Gummow ACJ, Hayne, Crennan and Bell JJ.
Cf Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [28] per Gleeson CJ, Gummow and Kirby JJ.
Zelden v Sewell Henamaste Pty Ltd [2011] NSWCA 56 at [17] per Campbell JA (Young JA agreeing).
See Carolan v AMF Bowling Pty Ltd t/a Bennetts Green Bowl [1995] NSWCA 69 at 6 per Cole JA.
See Collier v Lancer (No 2) [2013] NSWCA 186 at [7] - [8] per Ward and Leeming JJA. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 December 2018

Interpretation Act 1987(NSW)s 36(2)(b).

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