Kambouris v Kiatos [2016] VSCA 266

Court of Appeal (Vic)|2016-11-11|Before: Mr P, Judd J, Leish JA

PRACTICE AND PROCEDURE - Application for extension of time - Reasons for delay - Delay caused principally by default of legal practitioners - Explanation sufficient in circumstances - Prospects of success - Application for leave to appeal not shown to be futile - Application granted.

1 The applicant, Polyxeni Kambouris, by application filed 29 August 2016 seeks an extension of time to file an application for leave to appeal, after the time for filing or service has expired.

2 By writ filed 24 December 2007, Kambouris sought relief against the first defendant, Bill Floros, arising out of her liability as guarantor for debts of a joint venture proposal, which included her husband.

3 On 8 January 2009, Floros died and Theo Tahmazis was substituted as the representative of his estate.

4 On 12 February 2010, Kambouris was given leave to join two solicitors, Con Kiatos and Ella Gorenstein, as defendants to the proceedings.

5 On 20 March 2013, the trial, on liability only, was heard before Judd J over five days. The claims against Floros and Gorenstein were compromised and, ultimately, the trial only proceeded against Kiatos.

6 On 24 May 2013, Judd J found that, at the time that Kambouris had entered into the relevant guarantees:

(b) Kiatos had represented to her that two mortgages, including a mortgage given by his wife (Anna Papakostas), continued to secure her position with respect to her liability under the guarantees;

(c) Kambouris gave her security to the bank in the belief that her liability was secured by an indemnity agreement and mortgage given by each of Floros and Papakostas; and

(d) Kiatos was aware that Papakostas had not in fact executed an indemnity agreement or given a mortgage.[1]

7 In the circumstances, Judd J held that Kiatos had breached his duty of care to Kambouris and, it appears, also his retainer. He found that Kambouris had 'suffered loss and damage by reason of the breach'.[2] Accordingly, Judd J decided that Kambouris was entitled to judgment against Kiatos with damages to be assessed. He referred the assessment of damages to an associate judge.

8 The assessment of damages proceeded before Lansdowne AsJ over 10 days commencing on 4 March 2015. Kambouris claimed damages arising from the forced sale of properties belonging to her in satisfaction of her obligations under the guarantees. On 30 April 2015, Lansdowne AsJ delivered her reasons for decision,[3] finding against Kambouris on the basis that she had failed to establish that Kiatos's breach had caused her any substantial loss and damage. In particular, she found that, had Kambouris been aware that the relevant mortgages had not been signed, she would have taken advice and then, in all probability, proceeded to sign the guarantees anyway.[4]

9 On 1 June 2015, after hearing further submissions, Lansdowne AsJ ordered that Kiatos pay Kambouris nominal damages in the amount of $100 and otherwise that Kambouris pay Kiatos's costs.

10 On 16 June 2015, the solicitors for Kambouris served on the solicitors for Kiatos a notice of appeal dated 16 June 2015. The solicitors for Kambouris also filed the notice of appeal to the Trial Division through the electronic filing system, CITEC.

11 By letter dated 19 June 2015 to the solicitors for Kambouris, the solicitors for Kiatos suggested that the correct appeal procedure was for Kambouris to apply for leave to appeal to the Court of Appeal; and that she should discontinue her appeal to the Trial Division.

12 By email dated 29 June 2015 to the solicitors for Kiatos, the solicitors for Kambouris stated that 'after consulting with Counsel we are inclined to agree with your interpretation'. The email concludes:

We would be grateful if your client would consent to the appeal being lodged out of time.

The fault was of the lawyers, not our client and the extension will be in the order of three weeks as outlined above.

In those circumstances we would suggest there is no prejudice to your client.

13 In his affidavit of 11 September 2015, Anthony Chimonis, the principal of the solicitors for Kambouris, stated that after the above correspondence:

We proceeded on the basis of the Court of Appeal being appropriate jurisdiction due to the complexity of the case. Counsel had completed his preparation, but after a final review he determined and advised that the appropriate jurisdiction was in fact the Trial Division of the Supreme Court.

14 As a result of that decision, Chimonis deposed that he made inquiries as to the status of the notice of appeal dated 16 June 2015 and that the document had been submitted for filing but 'due to an error message the Notice of Appeal had not been received by the Supreme Court'.

15 By letter dated 9 September 2015 to the solicitors for Kiatos, the solicitors for Kambouris confirmed their position that the appeal to the Trial Division was correct and stated that their client intended to pursue her appeal rights in the Trial Division.

16 By notice of appeal filed 11 September 2015, Kambouris initiated an appeal to the Trial Division and sought leave to appeal out of time 'on the ground that, having sought to file a notice of appeal on 16 June 2015, her lawyers incorrectly took the view that the decision needed to be appealed to the court of appeal'.[5]

17 The application and appeal was heard before Judd J on 11 March 2016. At that hearing it was successfully argued on behalf of Kiatos that the application and appeal to the Trial Division were incompetent.

18 On 24 May 2016, Judd J delivered his reasons and dismissed the application with costs.

19 Chimonis deposed that the following occurred after the application was dismissed:

(a) in the week that the decision was handed down, counsel was briefed to prepare the necessary documents for an appeal to the Court of Appeal;

(b) by an email dated 3 June 2016 to counsel, Chimonis requested a conference with counsel to discuss finalising the appeal documents;

(c) by an email dated 21 June 2016 to Chimonis, counsel stated that the appeal papers would be ready by the following Friday, being 24 June 2016;

(d) by an email dated 5 July 2016 to Chimonis, counsel stated that work to complete the appeal would be an additional four days but noted: 'I am prepared to limit it to three days. Let me know when the client is prepared to put the money in trust';

(e) by an email exchange between counsel and Chimonis on 6 July 2016, Chimonis requested a breakdown of the $20,000 paid in fees and counsel referred him to his fee memoranda. Chimonis stated there was a need to 'get this Appeal back on track';

(f) by an email dated 7 July 2016 to counsel, Chimonis stated that his client would deposit fees once the date that the documents would be ready had been confirmed; and

(g) by an email of the same date to Chimonis, counsel gave a non-responsive reply, refused a conference and said nothing about when the documents would be ready except that he was busy for the next day and a half.

20 On 11 July 2016, on the instructions of Kambouris, alternative counsel was briefed to prepare the appeal documents.

21 On 29 August 2016, Kambouris filed the application for leave to appeal, and the application for an extension of time currently before this Court.

22 The proposed grounds of appeal include that Lansdowne AsJ erred in law in determining causation after, it is alleged, that issue had already been determined in favour of Kambouris by Judd J. Other proposed grounds contest the finding that Kambouris would have signed the guarantees at a later point in time, and that she had failed to prove that had she not signed the guarantees this would have prevented the losses she claimed.

23 In deciding whether an extension of time to seek leave to appeal should be granted, the Court will take into account several factors, including: (a) the length of delay; (b) the reasons for delay; and (c) the extent of any prejudice suffered by the respondent if the extension is granted.[6] An extension of time will not be granted if the appeal 'is so devoid of merit that it would be futile to do so'.[7]

24 On behalf of Kiatos, it was submitted that the application should be refused because:

(a) there was inadequate explanation for the delay; and

(b) the appeal had such low prospects of success that an extension of time would be futile.

25 On behalf of Kiatos, it was submitted that the application was filed approximately 430 days out of the time permitted under r 64.05 of the Supreme Court (General Civil Procedure) Rules 2015; and the explanation suffered from the following deficiencies:

(a) there was inadequate explanation for the delay of more than three months from the date of the decision of Lansdowne AsJ until the filing of the appeal to the Trial Division on 11 September 2015;

(b) to the extent that the delay, after the dismissal of the purported appeal in the Trial Division, was due to the failure to put funds in trust for counsel, such explanation is unsatisfactory; and

(c) there was no evidence about Kambouris or her husband checking on the progress of the intended appeal or the failure to provide funds to counsel.

26 We reject these submissions because the explanation by Chimonis for the delay prior to filing the purported appeal to the Trial Division on 11 September 2015 includes the following facts:

(a) a notice of appeal dated 16 June 2015 was served on the solicitors for Kiatos;

(b) consideration was given to the suggestion by the solicitors for Kiatos that the appeal was incompetent but on counsel's advice it was ultimately decided to proceed with an appeal to the Trial Division;

(c) after it was decided to proceed with an appeal to the Trial Division, the solicitor for Kambouris made inquiries and discovered that the purported notice of appeal dated 16 June 2015 had been rejected; and

(d) on 11 September 2015, the appeal documentation, which had been drawn by fresh counsel, was filed and served.

27 From the above facts, we conclude that for this period of delay:

(a) at all times Kambouris was proposing to appeal the decision of Lansdowne AsJ;

(b) from 16 June 2015, the solicitors for Kiatos were aware of the appeal and suffered no prejudice by reason of this delay; and

(c) the fault for the failure to file the notice of appeal dated 16 June 2015 lay principally with Kambouris's lawyers.

28 We reject the proposition that the evidence discloses that Kambouris acted unreasonably with respect to payment of counsel's fees during the period after the dismissal of the application before Judd J. The evidence, referred to above, discloses the following:

(a) counsel was briefed to prepare papers for the the application for leave to appeal to the Court of Appeal in the week of Judd J's decision; and, after a number of follow-up communications, counsel stated that the appeal papers would be ready on 24 June 2016;

(b) Kambouris had paid $20,000 with respect to counsel's fees but approximately two weeks after the period for filing the application had expired, counsel estimated that an additional three days' work would be necessary for the completion of the appeal papers and required further fees to be paid into trust;

(c) Chimonis advised counsel that a further $10,000 would be paid into counsel's account 'by close of business tomorrow' once counsel had confirmed when the documents would be ready;

(d) counsel did not give any commitment as to when the documents would be ready; and

(e) as a result, fresh counsel, who had not previously been involved in the case, was briefed.

29 Although the applicant's material should have explained how it took the new counsel two months to prepare the application notice of appeal that was ultimately filed on 29 August 2016, we consider it reasonable to infer that this delay was the result of fresh counsel having been briefed to prepare the necessary documentation.

30 Further, we reject the submissions that it was necessary for Kambouris to swear an affidavit in support of the application. Chimonis's affidavit sets out the circumstances and attributes the responsibility for the delays to the lawyers. The evidence does not suggest that, in the circumstances, the failure to provide funds to counsel was unreasonable.

31 In the circumstances, the applicant has provided a sufficient explanation for the series of delays that has occurred.

32 Mr De Young, counsel for Kiatos, argued persuasively that the proposed appeal was futile. In summary, he submitted as follows:

(a) the assertion that Judd J had determined causation for the purposes of the calculation of damages was bound to fail because, among other things, Kambouris had provided no particulars of loss and damage before Judd J and led no evidence as to causation;

(b) the amended statement of claim alleged two alternative causation pathways and Kambouris had, after the decision of Judd J, elected to pursue the 'no transaction case' by which she claimed, and failed to prove, that she would not have signed the guarantees at all had she known, when she did sign them, that the mortgages had not been signed. Kambouris had chosen not to particularise or pursue her alternative 'different transaction' case, by which she had pleaded that she would have insisted upon provision of proper security before proceeding with the guarantees;

(c) the appeal seeks to challenge factual findings which depended partly on credit and were amply supported by the evidence; and

(d) the guarantees which Kambouris signed in fact put her in a better financial position than she had been in previously.

33 In light of the detailed submissions which were made as to the merits of the proposed appeal, the Court reserved its decision to allow further consideration of the parties' oral and written submissions together with the reasons under appeal.

34 It may be accepted that, even in the presence of a satisfactory explanation for delay and a lack of prejudice, a court will refuse leave to extend time for the filing of an appeal if the appeal is so devoid of merit that it would be futile to extend the time.[8] However, it is not appropriate that 'an appellate court goes into much detail on the merits in considering whether the time for an appeal should be extended ... because ordinarily it only has limited materials and arguments'.[9]

35 In this case, the underlying facts are quite complex. While considerations of credit played a significant part in the findings sought to be appealed, the findings also drew on the history of financial arrangements involving Kambouris, her husband and others.[10] There is an apparent incongruity between the finding of Judd J that the actions of Kiatos caused Kambouris loss and damage and the decision of Lansdowne AsJ, which makes it impossible to say, on the necessarily limited material to which the Court has been taken, that the appeal would be futile. Further, the circumstances in which Kambouris abandoned her 'different transaction' case may require detailed consideration of the conduct of the trial. We do not consider it appropriate to consider the merits of the appeal in any further detail. It suffices to say, after consideration of the parties' oral and written submissions, that we do not consider that the proposed appeal in this case is so devoid of merit that it would be futile to extend the time.

36 There is no issue that a decision to extend the time for appealing is in the discretion of the Court and should be determined by 'consideration of whether justice as between the parties is best served by granting or refusing the extension sought'.[11]

37 For the reasons set out above, we do not consider that the applicant has failed to give an adequate explanation for the delay. Further, it should be noted this is not a case where a proposed appellant 'has indicated that [she] proposes not to appeal and that indication has been acted on [but rather a case] where, although [she] has allowed time to elapse, [she] has throughout the relevant period plainly indicated that [she] intends to appeal'.[12]

38 In Murphy v Doherty,[13] the Appeal Division of the Supreme Court considered an application for leave to serve a notice of appeal nearly 11 months out of time. The delay was explained on the basis that the solicitor for the applicants had wrongly advised that there was no right of appeal from the Trial Division on the entry of summary judgment. In allowing the application, Tadgell J, with whom Cummins J agreed, stated:

The Court does not like to see parties to litigation penalized because of default, through incompetence or negligence, or for any other reason, of their legal advisers.[14]

39 We agree with those sentiments and will order that the time for the filing of the application for leave to appeal in this matter be extended, nunc pro tunc, from 29 June 2015 to 29 August 2016.

[1] Kambouris v Tahmazis [2013] VSC 271 [15], [19].

[3] Kambouris v Tahmazis [No 2] [2015] VSC 174.

[5] Kambouris v Kiatos [2016] VSC 276 [5] (Judd J).

[6] Jackamarra v Krakouer (1998) 195 CLR 516, 519-24 (Brennan CJ and McHugh J).

[7] Muto v Secretary, Department of Planning and Community Development [2013] VSCA 85 [13] (Nettle AP and Neave JA).

[8] Slaveski v Victoria [2009] VSCA 6 [77] (Kellam JA, with whom Dodds-Streeton JA agreed).

[9] Jackamarra v Krakouer (1998) 195 CLR 516, 521-2 (Brennan and McHugh JJ).

[10] Appellate review of findings about reliance may not be subject to the restrictions applicable to other factual findings by a trial judge: Chappel v Hart (1998) 195 CLR 232, 246 n 64 (McHugh J). See also BNP Paribas v Pacific Carriers Ltd [2005] NSWCA 72 [46] (Handley JA); and in the context of liability of a solicitor Falkingham v Hoffmans (a firm) [2014] WASCA 140; (2014) 46 WAR 510, 552 [218] (Pullin, Buss and Murphy JJA).

[11] Hughes v National Trustees Executors and Agency Co of Australasia Ltd [1978] VicRp 27; [1978] VR 257, 263 (McInerney J).

[13] (Unreported, Supreme Court of Victoria Appeal Division, Tadgell and Cummins JJ, 4 February 1994).

Supreme Court (General Civil Procedure) Rules 2015

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