Kuek v Phillips [2017] VSCA 322

1 On 16 December 2016 the Magistrates' Court of Victoria ordered the applicant to pay the respondent $36,527.97. An appeal from that order was heard by J Forrest J, who dismissed the appeal and ordered the applicant to pay the respondent's costs on an indemnity basis.[1] The applicant seeks leave to appeal from the orders of J Forrest J. For the reasons which follow we have concluded that the application for leave to appeal should be dismissed.

2 Before turning to the proposed grounds of appeal it is necessary to set out in some detail the lengthy history of the proceedings. The matters set out below are not controversial. They are largely derived from an agreed summary which was filed in advance of the application for leave to appeal.

3 The applicant is an Australian lawyer trading as Access Law. Prior to 2012 the respondent worked as a disability advocate representing her clients on a no win, no fee basis. When cases involving her clients failed to settle before human rights organisations, she would obtain the services of a law firm and support that law firm in pursuing her client's claim.

4 Between 2006 and 2011 the respondent referred 46 cases to the applicant and performed work as a law clerk in respect of them. There was no written agreement between the applicant and respondent as to how the respondent would be paid for the work she undertook.

5 In 2007, the respondent introduced her client, Vida Benic and her disabled son, Stefan, to the applicant. The applicant agreed to act, and commenced proceedings, for Stefan Benic against the Catholic Education Office in 2007 and against the State of Victoria in 2008. The respondent undertook law clerk work in the Benic proceedings.

6 Subsequently, the applicant and Vida Benic had a falling out and Vida Benic retained Arnold Thomas & Becker to act for Stefan Benic. Arnold Thomas & Becker eventually negotiated settlements for Stefan Benic in respect of his claims against the Catholic Education Office and the State of Victoria, and the costs payable to Access Law.

7 Negotiations between the applicant and the respondent in respect of what might be paid to the respondent stalled. The applicant did not pay the respondent any money.

8 On 19 December 2013, on behalf of the respondent, Arnold Thomas & Becker filed a complaint against the applicant in the Magistrates' Court of Victoria. In her statement of claim, the respondent claimed the applicant was indebted to her in the sum of $19,537.70 for a total of 456.25 hours work, pursuant to an agreement by which the applicant engaged the respondent for reward to work for the applicant as a law clerk at the rate of $60 per hour. The complaint was purportedly endorsed in accordance with rule 5.09(1) of the Magistrates' Court (General Civil Procedure) Rules 2010, but the amount claimed in the endorsement was $0 together with costs of $391.

9 The complaint was served on 13 January 2014. On 28 January 2014 the applicant's then solicitor (Alfred P Mayuka) sent a letter to Arnold Thomas & Becker enclosing a cheque in the sum of $391 and contending that the proceedings had come to an end pursuant to r 5.09(4). The letter stated that the "conclusion of the proceeding dissolves the controversy it was concerned with," but then went on to state that the applicant, Mr Kuek, remained "willing to resolve the matter amicably". Arnold Thomas & Becker rejected the applicant's contention that the proceeding had come to an end and returned the cheque.

10 Between 25 March 2014 and 18 January 2016, the respondent's lawyer and the Magistrates' Court exchanged correspondence without the applicant's knowledge.

11 On 1 May 2015 the Magistrates' Court dismissed the respondent's complaint pursuant to rule 21.11 of the Magistrates' Court Rules. This rule provides that where a defendant has not filed a notice of defence and the complainant has failed to obtain an order in default of defence against the defendant, the complaint stands dismissed against the defendant.

12 On 31 December 2015, the respondent sent a summons to the Magistrates' Court seeking an order for reinstatement of the proceedings. On 4 January 2016 Holzer M made interlocutory orders in chambers, without notice to the parties, reinstating the complaint and granting leave to the respondent to file and serve an amended complaint.

13 On 18 January 2016, the applicant was served with the respondent's amended complaint and the interlocutory orders made by Holzer M on 4 January 2016.

14 On 5 February 2016 the applicant filed a defence to the respondent's amended complaint. In his defence, the applicant contended, inter alia, that the amended complaint was an abuse of process because the proceeding had come to an end upon payment of the amount set out in the rule 5.09(1) endorsement and because the order reinstating the proceeding had been made in denial of natural justice.

15 On two occasions the Magistrates' Court ordered the respondent to provide further and better particulars of her claim. Each of these orders was complied with. On 8 July 2016, the respondent consolidated and incorporated the further and better particulars into a further amended statement of claim which was filed and served.

16 On 17 August 2016 the applicant filed an amended defence to the respondent's further amended statement of claim.

17 Radford M presided in the hearing of the proceeding from 12 to 16 December 2016.

18 The respondent contended that she was entitled to $27,375 on the basis that she had been employed by the applicant and was entitled to be paid for services which she had provided to the applicant. The applicant's case was that the proceeding was an abuse of process and that he was not indebted to the respondent for any sum of money. His case was that the amount (if any) payable to the respondent was entirely at his discretion.

19 On the first day of hearing Radford M heard a submission on behalf of the applicant that the proceeding was an abuse of process on the basis that the orders made by Holzer M on 4 January 2016 were in excess of jurisdiction and in denial of natural justice. After hearing submissions, Radford M adjourned to the next day to consider his decision. On 13 December 2016, Radford M rejected the applicant's submissions.

20 Radford M then heard a further submission on behalf of the applicant that the proceeding was an abuse of process because, by reason of the payment of $391 under cover of the applicant's letter of 28 January 2014, the proceeding had come to an end pursuant to r 5.09(4).

21 In the course of his submissions opposing the applicant's submissions, the respondent's counsel said the following:

We have an attempt by the Defendant in the most outrageous manner, in a manner akin to Shylock in the stories of old, to rely upon a strict literal legal right when it is patently obvious to any reasonable person, let alone any legal practitioner, that there is an amount claimed. Because when you look in the body of the complaint it says as much. And it is quite simply an outrageous abuse to even run this argument.[2]

Now Mr Kuek and reasonable can't be used in the same sentence in this instance.[3]

23 Radford M rejected the applicant's submission that the proceedings were an abuse of process. In the course of delivering his reasons Radford M stated:

While the Plaintiff has made an error in relation to two parts of what is described in the complaint quite clearly on the face of the document the Plaintiff is claiming something more than $0. It alleges a cause of action, it claims in the prayer of relief the sum of $19,537.70. Clearly the payment of $391 has only a reference to costs and no reference to the principle relief being sought in the prayer of relief contained in the complaint. In the circumstances I cannot see how the payment of $391 would in any way in all the circumstances lead to a just result when quite clearly the Plaintiff has claimed in the prayer of relief the sum of $19,537.70. And again I note that the Defendant is a lawyer and quite clearly has sought to take advantage under the rules by seeking to rely upon a strict and literal interpretation of that rule and quite apparent on the face of the document and in the interests of justice he shouldn't do so. Furthermore if I'm wrong in all the foregoing, it is able and I don't believe that the overarching obligations contained in the Civil Procedure Act have been complied with in the sense that it leads to an efficient and prompt resolution of all the matters between the parties. And in that respect I also turn to the letter of the 28th January 2014 where the intent to pay the $391 by Mr [Mayuka] on behalf of his client asserts that they enclosed a cheque of $391 and that they assert now dissolves the controversy but then goes on to say that notwithstanding the above Mr Kuek remains willing to resolve the matter amicably. Those two paragraphs are in complete conflict. It's quite apparent to me that the writer was tendering the cheque in circumstances where he believed that there was still outstanding issues to be litigated or resolved between the parties. And that in my view is not consistent with the overarching obligation under the Magistrates Court Procedure Act and rules. It's for those reasons that I'm going to decide that the tendering of the cheque or the payment of the cheque more specifically in the sum of $391 does not amount to a payment that ends the proceedings.[4]

24 Immediately after Radford M delivered the reasons set out above, the applicant's counsel made an application for him to recuse himself on the grounds of apprehended bias. In support of this submission, he relied upon:

(i) the disparaging remarks about the applicant made by the respondent's counsel as set out above;

(ii) Radford M's failure to stop, or seek an explanation from the respondent's counsel in respect of those comments;

(iii) Radford M's statement that the applicant had not complied with the overarching obligations in the Civil Procedure Act 2010;

(iv) Radford M's remarks regarding the inconsistency in the contents of the letter of 28 January 2014.

25 In the course of an exchange between Radford M and the applicant's counsel, His Honour stated that he had completely disregarded the respondent's counsel's remarks regarding the applicant.

26 Radford M rejected the recusal application. His reasons for doing so included the following:

Further, I made no finding as to credit in my reasoning against Mr Kuek. In the circumstances I can't see looking at the matter objectively how the hypothetical reasonable observer would think that I had pre-judged the Defendant by not in effect pulling up the Plaintiffs barrister on what was clearly gratuitous comments that did not feature in any way in my detailed reasoning's or rulings. In applying the test in paragraph 12 and 13 of the judgement I don't believe objectively a reasonable observer would have come to that conclusion. That's the second point with me giving reasons in the second application about the $391 payment made by the Plaintiff to the Defendant. Not being in accordance with the overarching obligations of the procedure act and rules. It was part of my reasoning to determine the preliminary point that I was asked to determine by the Defendant. The Defendant may not like my decision but that is not the test ... As to the third point, that is in a letter from Mr Mayuka to the Plaintiff's solicitor. I observe that Mr Mayuka's correspondence had an internal inconsistency and this internal inconsistency was inconsistent with the matter being resolved on its merits when the dispute amounted in the proper, oh sorry, and the pre-relief was said to be 19 odd thousand dollars not $391. That was a matter that I took into account in my reasoning. Again, I made no adverse findings of credit upon Mr Kuek. In the circumstances, on points two and three that I have just referred to by the Defendant in applying the objective test in Johnson v Johnson, again I don't believe how a fair minded person would reasonably apprehend that I had pre-judged the Defendant. In the circumstances the application is refused.[5]

27 Following Radford M's rejection of the recusal application, the substantive trial took place.

28 Both the respondent and the applicant gave evidence. At the close of evidence, the respondent's counsel submitted that the court was entitled to award the respondent damages based on a proportion of the costs recovered by the applicant in both Benic cases. He submitted that the court should award damages in the sum of $13,759.12 on that basis.

29 The applicant's counsel made submissions about the proposition that the damages could be based on a proportion of costs reserved. He submitted it was not known what costs had been "taxed off". He also submitted that the respondent had been denied the opportunity when giving evidence to challenge a claim for damages calculated on a pro rata basis.[6]

30 On 16 December 2016 Radford M ordered the applicant to pay the respondent $13,759.12 plus interest of $4,179.75 plus costs of $18,589.10. He gave reasons orally. There is no transcript recording Radford M's reasons.

31 The solicitors for both the applicant and the respondent filed affidavits in support of the appeal under s 109 of the Magistrates' Court Act 1989 annexing the notes which they took at the time the Magistrate's reasons were delivered. The notes are consistent in recording Radford M's conclusions that:

(b) Ms Phillips worked on the two Benic files for which she claimed payment;

(c) some of the work done by Ms Phillips was claimed in the bills of costs drawn up by Mr Kuek;

(d) Mr Kuek received payment for the bills of costs rendered in relation to each of the Benic files, although not the full amount of the submitted bill;

(e) Mr Kuek's contention that he was not obliged to pay any amount to Ms Phillips, on the basis that the arrangement between them was discretionary, was unfounded and rejected;

(f) the agreement between them was that Mr Kuek would pay Ms Phillips a percentage of the total value of her work on the file consistent with the percentage recovered by him in relation to the bill of costs; and

(g) on the basis of this arrangement Ms Phillips was entitled to $13,759 (plus interest and costs), being 70% of the total value of her services, as per her worksheet.

32 The applicant appealed from the orders of the Magistrates' Court pursuant to s 109 of the Magistrates' Court Act 1989. Appeals under s 109 are confined to questions of law. The notice of appeal identified four questions of law:

(i) Did Magistrate Radford err in law in rejecting the appellant's preliminary submissions that the interlocutory orders Magistrate Franz Holzer made on 4 January 2016 were made in excess of jurisdiction and/or made in denial of natural justice to the appellant?

(ii) Did Magistrate Radford err in law in his interpretation, and application, of rule 5.09 of the Magistrates' Court (General Civil Procedure) Rules 2010?

(iii) Did Magistrate Radford err in law in refusing the appellant's application for his recusal?

(iv) Did the trial before Magistrate Radford miscarry?

Question 1: Reinstatement order of Holzer M on 4 January 2016

33 As to whether the order of Holzer M on 4 January 2016 was made in excess of jurisdiction, Forrest J observed that Holzer M was exercising an express power of reinstatement conferred by rule 21.13(1) of the Magistrates' Court (General Civil Procedure) Rules 2010. His Honour considered that the court, having exercised an express grant of power, maintained jurisdiction unless an order to the contrary was made.[7] Further, His Honour noted that it had been open to Mr Kuek to challenge the reinstatement order. Rule 46.10(b) confers power upon the Magistrates' Court to set aside an order which affects a person where the application for the order was made without notice to the person affected. His Honour concluded that in the absence of any such application the court retained jurisdiction to hear the claim.[8]

34 Earlier in this judgment, we have referred to the correspondence from Mr Kuek's solicitor to the respondent on 28 January 2014 attaching a cheque for $391. It was argued both before Radford M and Forrest J that Mr Kuek had been denied natural justice by not having had an opportunity to rely upon the terms of this letter in opposition to the making of an order reinstating the proceedings.

I enclose herewith Mr Kuek's cheque in the sum of $391.00 in payment of the aggregate amount sought pursuant to the r 5.09(1) endorsement. Pursuant to r 5.09(4), the proceeding must now come to an end. The conclusion of the proceeding dissolves the controversy it was concerned with.

Notwithstanding the above, Mr Kuek remains willing to resolve the matter amicably. In this respect, I respectfully suggest that your client abandon the litigious stance she has assumed. Instead, she should detail her claims comprehensively to enable appropriate consideration to be given to them.

36 After quoting the letter of 28 January 2014, Forrest J observed:

It needs only a sense of basic fairness to understand the ignoble and amateurish suggestion of Mr Kuek that accompanied the tender of the cheque - which was sensibly returned by Ms Phillips. Mr Kuek's conduct in this regard was, I think, inappropriate and inconsistent with his overarching obligations to the Court (both at common law and under the Civil Procedure Act 2010 (Vic) ('CPA')). More fundamentally, it would not have made a shred of difference to Magistrate Holzer's decision to reinstate the proceeding.[9]

Question 2: Rule 5.09 should have resulted in the dismissal of the claim

37 In January 2014, rule 5.09(1) and (4) provided as follows:

(1) If the plaintiff claims a sum of money only, the complaint must be indorsed with a statement as follows -

If you pay the amount of $ and costs of $ to the plaintiff or the plaintiff's Australian lawyer without giving notice of defence, you may avoid further costs.

(4) If a complaint is indorsed in accordance with paragraph (1), and the defendant pays the amounts claimed within the time limited for giving notice of defence, then the proceeding must come to an end.

38 Both before Radford M and Forrest J, the applicant contended that by operation of rule 5.09(4) Ms Phillips' complaint came to an end as a consequence of the tender of a cheque in the sum of $391. Forrest J concluded that the applicant's reliance on r 5.09(4) as a bar to Ms Phillips' claim was totally misconceived:

First, the terms of r 5.09(1) were not engaged so as to arguably terminate the proceeding provided by sub-rule (4). The only specified amount was for costs. There was no endorsement with the amount claimed so sub-rule (1) was not complied with and therefore (4) could not be utilised.

Second, even if r 5.09(1) was engaged the conditions of sub-rule (4) were not satisfied as it was clear there was either no amount claimed, or alternatively by reference to the substance of the claim, the amount claimed was $19,537. If it was the former, sub-rule (4) had no operation and if it was the latter then it was not paid.

Third, the endorsement was, as the Magistrate noted, entirely inconsistent with the substance of the claim contained in the complaint, which sought $19,537. It was, to use the Magistrate's words, 'a clear and plain error' which could not conceivably invalidate the substance of the claim.

Fourth, the asserted tender contained in the letter was disingenuous and misleading. The letter referred to an "aggregate amount" of $391. There was no such aggregate, as it was crystal clear from the substance of the claim that the amount sought was just short of $20,000 - and that the amount claimed in the indorsement was confined to costs alone.

Finally, if it was necessary, then the Magistrate's reliance on the provision of the CPA was correct. Section 47(1) of the CPA enabled the Magistrates Court, in furthering "the interests of the administration of justice", to make any order in relation to case management that it considered appropriate. Magistrate Radford's rejection of Mr Kuek's argument was such an order and the provision of the CPA clearly trumped r 5.09.

The end result is that the Magistrate was plainly right in rejecting the argument. I repeat what I said earlier: this letter and Mr Kuek's conduct asserting that the claim was finalised by a payment of $391 fell well short of the standard of conduct expected of a lawyer in this state - and this should have been recognised by his counsel - both before the Magistrate and on the appeal.[10]

39 We have set out earlier in this judgment the exchanges between Radford M and the applicant's counsel relevant to this ground. In Ebner v Public Trustee[11] the High Court made it clear that the governing principle in relation to apprehended bias is that a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide.

40 Forrest J accepted the applicant's submission that Radford M had erroneously posed the test as to whether 'a reasonable lay observer would harbour an apprehension of bias'. Nevertheless, Forrest J concluded:

Whatever test was applied, no reasonable observer could, would, perhaps, or most importantly, might, have thought that the Magistrate was not capable of exercising an affected, independent judgement of the case.[12]

41 The Notice of Appeal stated: 'The trial before Magistrate Radford miscarried' and then set out seven sub-paragraphs of particulars. Following these, the notice contended:

In the circumstances, Magistrate Radford erroneously:

(a) Displayed ostensible bias;

(b) Ignored relevant considerations;

(c) Relied on irrelevant matters; and

(d) Denied the appellant a fair hearing.

42 Forrest J considered that this appeal ground was, in the main, unintelligible.[13] However, based on his exchanges with the applicant's counsel, he considered that there were three bases for the applicant's contention that the trial miscarried:

(a) The determination by the Magistrate of the amount owed by Mr Kuek to Ms Phillips was outside the pleaded case;

(b) That there was no evidence to support the conclusion reached by the Magistrate; and

(c) That Mr Kuek did not have an opportunity to meet the case that was ultimately the subject of determination by the Magistrate.[14]

43 Forrest J's criticism of the drafting of this ground of appeal was well justified. The three grounds of complaint which His Honour distilled from the multitude of grounds under this ground, accurately summarised the basis upon which the applicant contended that the trial had miscarried.

44 As to the first of the complaints, Forrest J concluded:

So, as to the first complaint, the pleadings (the statement of claim and defence) plainly demonstrated that the contest was over what, if any, amount was owed by Mr Kuek to Ms Phillips for her services. As I have said, Ms Phillips alleged that she was owed $27,000 based on $60 per hour for slightly more than 450 hours of work on two pieces of litigation. Mr Kuek, in his defence, denied that he owed Ms Phillips anything.

Endeavouring, as counsel for Mr Kuek attempted to do so, to use the pleadings as a straight-jacket in a simple case of money owed for work and labour performed on Mr Kuek's behalf, was disingenuous.[15]

45 Forrest J noted that in the Magistrates' Court proceedings it was Mr Kuek's counsel, during cross-examination of Ms Phillips, who had introduced evidence in respect of a proportional payment. His Honour set out extracts from the cross-examination of Ms Phillips during which she gave evidence that on occasions she had received payments based on the proportion of fees recovered by Mr Kuek. Part of the extracts which he set out reads:

MR ADAMI: Yes and you had gotten paid only after generally speaking when my client had the money to pay you from the court order is that correct?

MS PHILLIPS: Yes or the settlement yes.

MR ADAMI: Yes or the settlement. So you would submit your running sheet and there would be a negotiation about the amount and then my client would offer you some money. That's right isn't it?

MS PHILLIPS: Yeah, I am not sure there was a negotiation. What I would do is submit it and trust that the work would be transferred into the format as much as it could be ... and that I would be reimbursed. There would be some instances where Gabriel would tell me that only 70% of what his costs were so he would only give myself and the barrister 70% of what ours were but that was not really negotiated as much as his decision.

...

MR ADAMI: Sometimes it was a fixed figure he would negotiate with you and sometimes it was a percentage figure you would each be paid whatever the amount was in a particular percentage of your costs compared to what was received if you know what I mean.

MS PHILLIPS: Yes that is what I was advised.

MR ADAMI: Sometimes it was we have been told by the court that we will get 83% of what we have claimed and therefore we will take 83% of your costs, 83% of his costs and -

MS PHILLIPS: Yes.

MR ADAMI: So sometimes it would be just a fixed sum and sometimes it would be a percentage sum that you were awarded.

MS PHILLIPS: Yes.[16]

Having raised the point that this proportional arrangement was the basis upon which payments had been made by Mr Kuek to Ms Phillips in the past, and thus provided the foundation for the Magistrate to reach a conclusion that this was the basis for the arrangement on these two files, the proposition now put by Mr Kuek is close to bizarre. It was his counsel who established the evidentiary foundation for the ultimate finding. To now contend that there was no basis is untenable.[17]

47 His Honour concluded that the issue as to the arrangements in the past fell within the parameters of the dispute over payment for work done by Ms Phillips. The evidence as to those arrangements provided the foundation for an argument that there was an implied contract between Ms Phillips and Mr Kuek.[18]

48 As to the complaint that Mr Kuek did not have an opportunity to meet the case ultimately found by the Magistrate, his Honour concluded:

By the time Mr Kuek gave evidence it was known (particularly as it had been adduced by Mr Kuek's counsel) that one of the suggestions as to what may be owed was the manner of payment which had been adopted in the past and therefore the proportionality of the recovery made by Mr Kuek:

MR KUEK: Yes, in most cases the money we have divvied up it would have been money that we have recovered on a party taxation it would invariably less than Julie and I wanted to be paid. The way it would be to divide it up with the money that we recovered...

MR ADAMI: Yes.

MR KUEK: So the idea was to make sure that all the stakeholders in this had a fair and equitable distribution of funds that were recovered from the work we all put in.

The result is that Mr Kuek had every opportunity to dispute that this was the arrangement - and he did so, both in evidence in chief and in

cross-examination - asserting to the end that any payment for Ms Phillips' work depended entirely on his discretion. That was the position he defended at trial, and he had every opportunity to address alternative versions proffered by Ms Phillips.[19]

49 As to the contention that there was no evidence to support the conclusion reached by the Magistrate, his Honour cited with approval the statement of Bell J in Rugolino v Howard:[20]

These principles have been established in the decided cases, usually in the context of defining the proper role of a judge on appeal. So in Roads Corporation v Decakis, Batt J held 'the question whether there is any evidence of a particular fact is a question of law.' Therefore a finding of fact is open to challenge as 'erroneous in law', but only if 'there is no probative evidence to support it'. Similarly in S v Crimes Compensation Tribunal, Phillips JA said 'making a finding of fact would ordinarily give rise to an error of law only if 'it is shown that the fact finding tribunal arrived at a finding that was simply not open to it.' His Honour emphasised that the question was not whether the finding was 'reasonably open', for that implied the court on appeal could test the finding against a reasonableness standard, but whether the finding was open at all.[21]

50 Forrest J concluded that there was evidence to support the Magistrate's finding that there was an implied contract that Ms Phillips be paid founded upon "the percentage recovery arrangement utilised in the past".[22]

51 Forrest J ordered that Mr Kuek pay Ms Phillips costs on an indemnity basis. His Honour considered that three of the four grounds pressed by Mr Kuek were totally unmeritorious.[23] As to the bias ground, His Honour concluded that the recusal application was ill advised and should not have been made.[24] Although His Honour accepted that Radford M had applied the incorrect test in respect of the recusal application, he considered that the application could not possibly have succeeded even if he had applied the correct test.

Proposed Ground 1: The learned judge erred in law in failing to hold that the proceeding before Magistrate Radford was an abuse of process by reason that Magistrate Holzer's interlocutory order was legally invalid.

52 Mr Gyorffy QC, who appeared for the applicant, did not make any oral submissions in support of this ground. He relied upon the applicant's written case. The proposed ground of appeal has no real prospect of success.

53 The applicant made no submission before Forrest J, either in writing or orally, that the proceeding before Radford M was an abuse of process by reason of Holzer M's interlocutory order being legally invalid. There is no basis for a finding that Forrest J erred in failing to make a finding which he was not invited to make.

54 Insofar as Forrest J did make a finding that Holzer M's interlocutory order was legally valid, that finding was plainly correct. Rule 21.13(1) of the Magistrates' Court (General Civil Procedure) Rules 2010 conferred power on Holzer M to reinstate the proceeding. Further, there is no merit in the applicant's contention that Holzer M 'was not seized of jurisdiction to make an order' permitting an amendment. Section 47(1) of the Civil Procedure Act 2010 conferred power on the Magistrates' Court to make 'any order it considers appropriate' for the management of a case. Section 48 is to similar effect in the context of pre-trial procedures. Finally, Mr Kuek could have but did not challenge the reinstatement order under Rule 46.10(b).

55 The form of the complaint required an amendment because it erroneously claimed $0. An amendment was therefore necessary to regularise the proceeding. The applicant's contention that he was denied natural justice by not being given an opportunity to make submissions in opposition to the reinstatement of the proceeding is unfounded for the reasons Forrest J gave.

Proposed Ground 2: The learned judge erred in law (a) in his interpretation and application of r 5.09, and (b) in treating the overarching obligations of the Civil Procedure Act 2010 as applicable to a proceeding that, by operation of r 5.09(4), 'must come to an end'.

56 Mr Gyorffy made no oral submissions in support of this ground. He relied upon the written case. Proposed Ground 2 has no real prospect of success.

Ultimately, the issue on this point is the interpretation and application of r.5.09(4) as it stood in 2014. The applicant submits that on a proper reading of r.5.09(1) the respondent's original Complaint was manifestly endorsed in accordance with r.5.09(1).

If, by r.5.09(4), the proceeding must come to an end, the respondent was not entitled to make her application to the Magistrates' Court for a listing of her application; Magistrate Holzer should not have made the orders of 4 January 2016; the proceeding was an abuse of process; the Magistrates' Court should not have permitted the proceeding to continue; and Magistrate Radford should not have proceeded to hear the matter.[25]

58 Earlier in this judgment we have set out the passage in the judgment of Forrest J where his Honour dealt with a submission in virtually identical terms to that set out above. His Honour's reasoning discloses no error. The applicant's contention that the endorsement on the respondent's complaint claiming $0 was in accordance with r 5.09(1) is incorrect. The only specified amount was $391 for costs. There was no endorsement of the amount claimed so sub-rule (1) was not complied with and r 5.09(4) was not engaged.

Proposed Ground 3: The learned judge failed to refer to relevant considerations when arriving at his decision to reject the applicant's contention that Magistrate Radford ought to have recused himself from presiding over the hearing. The relevant considerations were that in the course of arriving at his r 5.09 ruling Magistrate Radford concluded the applicant had not complied with the overarching obligations of the Civil Procedure Act 2010 and that the applicant's tender of payment in the sum of $391 was in complete conflict with his willingness to resolve the dispute amicably.

59 In the appeal proceedings before Forrest J the applicant contended that Radford M erred in law in refusing the recusal application because he applied the wrong test. In particular, the applicant submitted that Radford M erred by applying a test of whether a fair-minded lay observer would reasonably apprehend that he would not bring an impartial and unprejudiced mind to the resolution of the question he was required to decide. Forrest J accepted that Radford M had applied an incorrect test but concluded (in effect) that whatever test was applied the Magistrate had to reject the application.

60 The applicant challenges Forrest J's reasoning on the grounds that his Honour failed to refer to relevant considerations, namely, that Radford M had concluded that the applicant had not complied with the overarching obligations under the Civil Procedure Act 2010, and that he had concluded the applicant's tender of $391 was in complete conflict with his willingness to resolve the dispute amicably.

61 Forrest J concluded that the conduct of the applicant in asserting that the claim was finalised by a payment of $391 fell well short of the standard of conduct expected of a lawyer in Victoria.[26] We agree with this conclusion.

62 The overarching purpose under s 7(1) of the Civil Procedure Act is to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute. The applicant's conduct in purporting to bring the proceedings in the Magistrates' Court to an end by payment of $391 in respect of a claim which, on its face, was for an amount in excess of $19,500 was inconsistent with this overarching purpose.

63 If a judicial officer made a finding that a legal practitioner had breached the Civil Procedure Act in circumstances where there was no proper foundation for doing so, such a finding might legitimately be called in aid of an application for recusal on the ground of apprehended bias. That is not this case.

64 To similar effect, Radford M's finding that the applicant's tender of payment in the sum of $391 was in complete conflict with his willingness to resolve the dispute amicably, was also correct. Earlier in this judgment we have set out the terms of the correspondence forwarded to Ms Phillips on 28 January 2014. On the one hand, Mr Kuek asserted that as a result of the payment the proceeding had to come to an end by virtue of r 5.09(4) and that the controversy had been "dissolved". On the other hand, he proposed that Ms Phillips 'detail her claims comprehensively to enable appropriate consideration to be given to them with a view to "amicable" resolution.' It is plain from the terms of the correspondence that Mr Kuek recognised that notwithstanding the tender of the cheque for $391 there was an ongoing dispute with Ms Phillips which had not been resolved. We agree with Radford M's conclusion that the applicant's tender of the $391 as a purported 'dissolution' of the controversy was in conflict with his expressed willingness to resolve the dispute amicably. This was not a finding which could legitimately be called in aid of the application for Radford M to recuse himself on the ground of apprehended bias.

65 Neither the finding that the applicant breached the Civil Procedure Act nor that his tender of a payment of $391 was in complete conflict with his willingness to resolve the dispute amicably, were relevant considerations. Both findings were correct. Neither finding was a matter which could legitimately be relied upon by the applicant in support of his recusal application. Accordingly, the failure of Forrest J to refer to either matter in that context reveals no error of law. Proposed appeal Ground 3 has no real prospect of success.

Proposed Ground 4: The learned judge erred in law in that he (a)(i) mischaracterised, (ii) misconstrued, and/or (iii) failed to give due consideration to, the applicant's ground and submissions that the trial before Magistrate Radford had miscarried; and - (b) failed to refer to relevant considerations, namely the respondent's and applicant's testimony that payment to the respondent was at the applicant' discretion; and - (c) failed to hold that the final order of Magistrate Radford was vitiated by apprehended bias.__[27]

66 As refined during the course of his oral submissions, Mr Gyorffy focussed attention on the finding by Forrest J that by the end of the trial Radford M had three options in respect of the arrangement between Ms Phillips and Mr Kuek:

(a) She was an employee paid at an hourly rate of $60 for working up to 450 hours on the files as per her worksheet;

(b) She was an employee and that the arrangement between herself and Mr Kuek was based on an implied contractual arrangement (implied on the basis of previous cases she had worked on) that she be paid an equivalent percentage of her worksheet from the outstanding amount recovered by Mr Kuek in relation to his bill of costs ['the proportionate payment option']; or

(c) She was never an employee of Mr Kuek's and that her only entitlement to a payment was dependent upon a discretionary allowance by Mr Kuek, notwithstanding that he may have received payment for work performed by Ms Phillips.[28]

67 Mr Gyorffy submitted that there was a further option open to Radford M, namely that Ms Phillips' entitlement to be paid was at the applicant's discretion or conditional on negotiations between Ms Phillips and Mr Kuek. He took the court to various passages in the transcript which he submitted supported this further option.

68 Mr Gyorffy submitted that the evidence of both the applicant and the respondent supported a finding that Ms Phillips did have an entitlement to be paid, albeit that the quantum of any payment was to be the subject of negotiation with Mr Kuek. He submitted that the applicant's case had not been that Ms Phillips' payment was a matter entirely within Mr Kuek's discretion.

69 The difficulty with this submission is that it is inconsistent with the way the applicant's case was conducted before Radford M. During final submissions before Radford M the following exchange took place between His Honour and the applicant's counsel:

HIS HONOUR: In the absence of an agreement, how was it meant to be done?

MR ADAMI: It was done at his discretion.

HIS HONOUR: So it's completely 100% discretionary?

MR ADAMI: Yes. But the fairest way that he applied it was that in cases where there was no success, with his speculative arrangements with the clients, he would not seek to recover, although he had the opportunity to do that.[29]

70 The appeal heard by Forrest J was confined to a question of law. His Honour correctly concluded that in such an appeal a finding of fact is only open to challenge if there is no probative evidence to support it.[30] Forrest J correctly concluded that there was evidence before Radford M which supported a finding that Ms Phillips was an employee of Mr Kuek and that the arrangement between herself and Mr Kuek was based on an implied contractual arrangement that she be paid a percentage for her work equivalent to that recovered by Mr Kuek in relation to his bill of costs. In an appeal confined to questions of law, there was no basis for the applicant to challenge Radford M's findings of fact underpinning the existence of an implied contractual arrangement.

71 Mr Gyorffy submitted that it was unfair for Radford M to have permitted the respondent's counsel to contend on the final day of hearing that Ms Phillips had an entitlement to be paid on a pro rata basis. Mr Gyorffy submitted that Radford M had permitted the respondent to change the way in which she put her case after the close of evidence.

72 Irrespective of any inconsistency between the proportionate payment option and the pleaded case, evidence emerged during the course of the hearing which supported the proportionate payment option. That evidence was adduced during the course of Ms Phillips' cross-examination. Forrest J was correct to find that in circumstances where the evidence of pro rata payments emerged during the course of the hearing, the respondent's counsel was entitled to rely upon that evidence in his final submissions. Further, if the applicant's counsel considered there to be unfairness in the circumstances in which the proportionate payment option was pressed, he could have made an application to recall the applicant and/or the respondent for the purpose of further testing the evidentiary foundation of the proportionate payment option. No such application was made.

73 The applicant's contention that Magistrate Radford acted unfairly in receiving and accepting submissions based on the proportionate payment option, has no substance.

Proposed Ground 5: J Forrest J erred in ordering the applicant to pay the respondent's costs on an indemnity basis.

74 Costs are in the unfettered discretion of the court.[31] The discretion to award costs on an indemnity basis is unlimited,[32] though it is usually made only where there are unusual or special circumstances.[33] Forrest J concluded that three of the four grounds of appeal were totally unmeritorious. The fourth ground, challenging Radford M's dismissal of the recusal application, was 'only arguable because of a slip of the tongue'.[34]

75 Mr Gyorffy QC accepted that the decision to award indemnity costs was a discretionary decision and that therefore the challenge to the decision was subject to the principles in House v The King.[35] He submitted that those principles were engaged because Forrest J 'has just gone too far'.

76 We reject this submission. The decision to award indemnity costs was plainly open to His Honour. This is particularly so in circumstances where His Honour concluded that three of the four grounds of appeal were totally unmeritorious.

77 We will hear the parties on the question of costs.

[1] Kuek v Phillips [2017] VSC 332 ('Reasons').

[2] Transcript of Proceedings, Phillips v Kuek (Melbourne Magistrates' Court, D13851250, Magistrate Radford, 13 December 2016) 8.

[4] Ibid 12. The transcript quoted is unrevised and any apparent errors have not been corrected.

[5] Ibid 20-21.The transcript quoted is unrevised and any apparent errors have not been corrected.

[6] Transcript of Proceedings, Phillips v Kuek (Melbourne Magistrates' Court, D13851250, Magistrate Radford, 15 December 2016) 22-23.

[7] See Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 225 CLR 364, 370-371 [13]-[16]; 2 Elizabeth Bay Road v Owners - Strata Plan No 73943 [2014] NSWCA 409; (2014) 88 NSWLR 488, 509-510 [100].

[10] Reasons [54]-[59] (emphasis in original) (citations omitted).

[11] [2000] HCA 63; (2000) 205 CLR 337, 344 [6].

[20] [2010] VSC 590.

[23] Transcript of Proceedings, Kuek v Phillips (Supreme Court of Victoria, S CI 2017 00048, J Forrest J, 21 June 2017) 5.

[25] Applicant's Written Case dated 18 July 2017, 5 [19]-[20].

[27] This is the ground as set out in the application. The written case also includes in this proposed ground an assertion of a failure to provide adequate reasons. No written or oral submission was directed to this assertion.

[29] Transcript of Proceedings, Phillips v Kuek (Melbourne Magistrates' Court, D13851250, Magistrate Radford, 15 December 2016) 15.

[30] Reasons [106] citing Rugolino v Howard [2010] VSC 590 [10].

[31] Supreme Court Act 1986 (Vic) s 24.

[32] Bass Coast Shire Council v King [1997] 2 VR 5, 29.

[35] [1936] HCA 40; (1936) 55 CLR 499, 505.