Plaintiff v Defendant

Supreme Court of Victoria|2014-07-01|Before: WARREN CJ

ADMINISTRATIVE LAW - Application for judicial review - Decision of Appeal Costs Board refusing payment under indemnity certificate - Indemnity certificate filed out of time - Where discretion to accept certificate filed out of time if in the interests of justice to do so -Whether refusal to accept the certificate unreasonable - Whether Appeal Costs Board failed to consider relevant considerations - Application refused - Appeal Costs Act 1998 ss 35D and 35E.

2 Both the award of indemnity certificates and any payments made under them are governed by the Act.

3 Section 35D provides:

An application for payment under this Act must be lodged with the Board not later than 12 months after the final determination of the matter to which the indemnity certificate relates.

4 Section 35E provides:

(1) Subject to subsection (2), if an application for payment under this Act is not lodged with the Board within the time referred to in section 35D, the indemnity certificate expires.

(2) Despite subsection (1), the Board may determine that an application for payment under this Act may be assessed and determined as if the indemnity certificate had not expired, if it considers that it is in the interests of justice to do so.

5 The purpose of the Act is largely benevolent in that it is intended to partially compensate litigating parties who suffer loss through incurring legal costs arising from judicial error or other specific circumstances for which the litigating party is not responsible.

6 Pursuant to s 35D, the plaintiff was required to lodge his application for payment with the Board before 23 September 2012. This did not occur. It was not until 19 November 2012 that Robert Stary Lawyers, who acted for the plaintiff on appeal, wrote to the Board applying for payment under the certificate on behalf of the plaintiff. In that letter, Robert Stary Lawyers stated:

We note the solicitor who had carriage of this matter had left the firm and omitted to advise the principal of this practice [of] the outstanding Appeals Cost indemnity Certificate on this file.

We apologise for the delay in providing the following attachments for your urgent attention.

7 The plaintiff's application was considered by the Board, constituted by Mr Davies, Ms Cole and Ms Wirth, at a meeting on 30 January 2013 and was refused ('the 30 January decision'). The minute of the meeting at which the 30 January decision was made states, '[O]ut of time - write and advise no payment'. On 4 February 2013, the Secretary to the Board informed Robert Stary Lawyers by letter that:

[a]fter careful consideration, the Board has determined that, pursuant to Section 35D of the Appeal Costs Act 1998, no payment can be allowed for this application. This is due to the lateness of the application.

8 Almost three months later, on 1 May 2013, Robert Stary Lawyers wrote to the Board requesting that the Board reconsider its decision to refuse payment under the plaintiff's expired certificate. As part of that application, Robert Stary Lawyers provided the Board with additional material by way of explanation for the delay in lodging the certificate.

9 On 30 July 2013, the Board, this time constituted by only Mr Davies and Ms Cole, that is without Ms Worth, affirmed its decision to refuse the application ('the 30 July decision'). The immediate consequence was that the Board sat without a quorum.[2]

10 On 18 September 2013, following a request by Robert Stary Lawyers, the Board provided reasons for the 30 July decision.

11 The plaintiff filed this proceeding on 26 September 2013. By his Third Further Amended Originating Motion dated 4 April 2014 the plaintiff seeks relief in the nature of certiorari to quash the two decisions of the Board refusing payment under the indemnity certificate. He also seeks a declaration that the interests of justice required the Board to exercise its discretion under s 35E(2) of the Act to determine the application under the expired certificate as if the certificate had not expired. Finally, he seeks relief in the nature of mandamus to compel the Board to exercise its discretion under s 35E(2) of the Act in accordance with the declaration sought.

(1) That the decisions were, in the circumstances set out in the Affidavit of Support, unreasonable.

(2) That the defendant, in reaching the decisions, failed to take into account relevant considerations.

13 Shortly before this proceeding was set down for hearing it became apparent to the parties that the 30 July decision was made without a quorum of the Board as required by s 28 of the Act. This section provides:

(1) The chairperson must preside at a meeting of the Board.

(2) A majority of the members for the time being holding office constitutes a quorum of the Board.

(3) If there is a quorum at a meeting of the Board, the Board may act despite any vacancy in its membership.

14 Throughout 2013, the Board consisted of four members. Three of those members constituted the Board that made the 30 January decision, however only two members attended the meeting at which the Board purported to make the 30 July decision. As was conceded by the defendant, the attendance of only two members of the Board meant that it did not have a quorum as required by s 28(2) and therefore the 30 July decision was not a valid decision for the purposes of the Act.

15 The realisation of the invalidity of the 30 July decision led to a substantial alteration in the way the plaintiff put his case. In earlier versions of his originating motion, the relief sought and the submissions supporting it were directed toward the 30 July decision on the basis that it was this decision that constituted the final determination of the plaintiff's application. The plaintiff sought to impugn that decision primarily on the basis of the reasons provided by the Board on 18 September.

16 When it became apparent that the 30 July decision was invalid, the plaintiff proceeded on the basis that, in order to succeed, he must demonstrate that the 30 January decision should also be quashed and that in doing so he was confined to the material that was before the Board as at 30 January. However, he submitted that facts surrounding the 30 July decision were relevant to the Board's overall conduct and may assist the Court in drawing inferences about the way in which the Board came to the 30 January decision.

17 The plaintiff submitted that the 30 January decision was unreasonable in the circumstances. This was put on two connected bases: first, he submitted that available material gives rise to an inference that the Board failed to turn its mind to the exercise of its discretion under s 35E(2) and in so doing failed to consider a relevant consideration and therefore misunderstood its statutory powers and obligations. Alternatively, he submitted that, even assuming that the Board did purport to exercise this discretion, unreasonableness should be inferred by virtue of the result of the Board's decision.

18 The defendant's primary submission was that there was insufficient material from which the Court could conclude that the Board had failed to act reasonably in coming to its determination in respect of s 35E(2). However, it submitted that even if it were shown that the Board had failed to consider the interests of justice in its determination of the plaintiff's application, the Board was not obliged to consider s 35E(2) before refusing the application.

19 The plaintiff advanced several submissions in support of his contention that the Board was obliged to consider s 35E(2). First, he submitted that the Board acts pursuant to s 35E(1) when it refuses an application on the basis that the certificate has expired. The fact that s 35E(1) is expressly stated to be subject to s 35E(2) creates a clear link between the finding that the certificate has been lodged out of time and the examination of the consequences of the failure to lodge within time.

20 The plaintiff further submitted that despite the express terms of s 35E(2) providing that the Board 'may determine that an application for payment under this Act may be assessed and determined as if the indemnity certificate had not expired, if it considers that it is in the interests of justice to do so ' (emphasis added), may in this context should be taken to mean must. The plaintiff put this argument on the basis of a principle of co-interpretation, which was later withdrawn, and more generally on the basis of the text and context of the Act. He submitted that were it the case that the Board could choose not to address itself to the interests of justice at all when considering a late application, the phrase 'interests of justice' would be otiose. Parliament, he said, would not have directed the Board to a test that could be ignored as this would render the statutory test nugatory and could lead to unjust outcomes.

21 The plaintiff also relied on the second reading speech where the Attorney-General stated that:

[T]he Board will be able to accept late applications if it is in the interests of justice to do so.[3]

22 In essence, the plaintiff contended that the discretion conferred by the word 'may' is limited to the manner in which the Board determines whether the interests of justice are served in a particular case and does not give the Board a discretion as to whether or not to consider whether the interests of justice weigh in favour of allowing an application based on a certificate that has expired. Section 35E(2) confers on the Board a power to consider late applications, and that that power fell to be exercised reasonably having regard to the interests of justice.

23 In support of his submission that the Board did not turn its mind to s 35E(2), the plaintiff relied on the minute of the meeting at which the 30 January decision was made that states, '[O]ut of time - write and advise no payment' and on the letter of 4 February 2013 from the Secretary to the Board advising Robert Stary Lawyers that the application had been refused 'due to the lateness of the application'. Neither of these documents mention s 35E, nor the discretion to consider the interests of justice. On that basis, he submitted that the only reading of the Board's decision open on the available material was that it failed to turn its mind to the exercise of its discretion under s 35E(2) and therefore misunderstood its statutory obligations.

24 The plaintiff also relied on the High Court decision in Minister for Immigration and Citizenship v Li[4] as authority for the proposition that an inference of unreasonableness may be objectively drawn even when a particular error in reasoning cannot be identified. In that case the majority (Hayne, Keifel and Bell JJ) held that:

As to the inferences that may be drawn by an appellate court, it was said in House v The King that an appellate court may infer that in some way there has been a failure properly to exercise the discretion "if upon the facts [the result] is unreasonable or plainly unjust". The same reasoning might apply to the review of the exercise of a statutory discretion, where unreasonableness is an inference drawn from the facts and from the matters falling for consideration in the exercise of the statutory power. Even where some reasons have been provided, as is the case here, it may nevertheless not be possible for a court to comprehend how the decision was arrived at. Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.[5]

25 In support of his submission that such an inference should be drawn in this case, the plaintiff also relied on a number of matters set out in his affidavit of support that he submitted 'must have been apparent to the Board at the time it made its first decision'. Those matters were:

a) This late application involved a simple error of some seven weeks' effect;

b) The application was made by a criminal accused unlikely to be of means;

c) The application came from a firm, Robert Stary Lawyers with many years of distinguished practice and the largest provider of legal aid in Victoria;

d) Robert Stary Lawyers is a firm that conducts numerous criminal cases every year (some 2,500 criminal cases);

e) Robert Stary Lawyers has lodged numerous appeal costs certificates before the Board over the years without any difficulty or criticism;

f) A majority of the fees sought were and are those of Senior Counsel;

g) To treat that certificate as though it had expired would cause hardship to the Plaintiff, or would require the firm and/or counsel to absorb costs in the amount of the certificate granted;

h) The amount in question, some $27,500, is an extremely modest amount in the context of the Board's budget;

i) There would be no tangible harm in the Board treating the certificate as though it had not expired, and it was clearly in the interests of justice to do so.

26 Counsel for the plaintiff conceded that some of these factors were not apparent on the face of the application. However, he submitted that the Board should be taken to have known each of the listed matters at the time it refused the application. He submitted that these were all relevant considerations to be addressed as part of the Board's decision making process. The plaintiff submitted that because these considerations did not lead to the Board accepting the plaintiff's application, the Court should infer that the Board's decision was tainted by a failure to consider a relevant consideration or was otherwise unreasonable.

27 The defendant submitted that neither the minutes nor the letter of 4 February attempted to set out and adjudicate on the factual matters relevant to the 30 January decision. Rather, the defendant submitted, they stated a conclusion of fact. The plaintiff bears the onus of demonstrating the unreasonableness of the decision; it is not for the defendant to justify it. In the absence of reasons, the defendant denied that the plaintiff had established that the Board had failed to consider a relevant consideration.

28 The defendant relied on Kentucky Fried Chicken Pty Ltd v Gantidis[6] as illustrative of the approach that a Court should adopt when faced with a claim that a decision maker failed to take account of relevant considerations in a context where no reasons were provided. In that case Barwick CJ said:

Of course, if it is shown that a Tribunal such as the present, in making an order within its competence, has failed to take into account relevant matters, its determination can be reviewed, as in this case, upon an order to review. So much is a settled facet of the relevant jurisprudence. But that course cannot be taken unless it clearly appears that there has been a material error of that kind. Whether or not it has occurred is a matter of fact and not of surmise. Failure in expressing reasons for decision is a very unsure guide to the resolution of such a fact, though in some cases it may be indicative. But in any case, such a failure to advert to some material circumstance, if it exists, must be weighed in the light of all the circumstances of the proceedings including the nature and extent of the charter of the Tribunal.[7]

29 The defendant further submitted that on the basis of the material before the Board at the time of the 30 January decision, it was open to the Board to refuse the application. None of the matters the plaintiff alleged must have been apparent to the Board were placed directly before the Board and in any case, any weight that was or was not given to those matters by the Board is speculation.

30 In response to the submission that the Board is obliged to consider the interests of justice in determining whether to treat an expired certificate as if it had not expired, the defendant relied on s 45 of the Interpretation of Legislation Act 1984, which provides:

(1) Where in this Act or any Act passed or subordinate instrument made on or after the commencement of this Act the word "may" is used in conferring a power, that word shall be construed as meaning that the power so conferred may be exercised, or not, at discretion.

(2) Where in this Act or any Act passed or subordinate instrument made on or after the commencement of this Act the word "shall" is used in conferring a power, that word shall be construed as meaning that the power so conferred must be exercised.

(3) The provisions of this section shall have effect notwithstanding any rule of construction to the contrary and any such rule is hereby abrogated with respect to this Act and any Act passed or subordinate instrument made on or after the commencement of this Act.

31 As s 45(3) makes clear, s 45(1) applies notwithstanding any principle of interpretation to the contrary. The defendant submitted that even if the plaintiff succeeded in establishing that the Board did not consider s 35E(2), as a matter of construction, the Board was not obliged to do so as s 35E(2) confers a power that may be exercised at the Board's discretion.

32 Whilst I accept that it is s 35E(1) that allows the Board to determine that a certificate has expired, and that s 35E(1) is expressly subject to s 35E(2), in my view, the ordinary meaning of the words used in the provision suggests that it is a discretion, not an obligation that is conferred by s 35E(2). Although there is authority for the proposition that the word 'may' sometimes denotes 'must' and should be read as giving rise to an obligation,[8] in each case, whether this is so is to be decided in the light of the particular statute construed according to the apparent legislative intention and the rules of statutory construction. In this case, I consider s 45(1) of the Interpretation of Legislation Act 1984 is determinative of the issue as it provides that the word 'may' must be construed to mean that the power so conferred may be exercised, or not, at discretion of the Board.

33 The excerpt from the second reading speech on which the plaintiff relied, being that 'the Board will be able to accept late applications if it is in the interests of justice to do so' does not put the matter at large or leave it open ended. The commentary does no more than confirm the words of the statute, namely, that the Board is vested with a discretion to consider applications out of time where, in the view of the Board, the interests of justice warrant it.

34 The plaintiff's submission that such a construction would render the 'interests of justice' section of the provision nugatory should not be accepted. Despite the lack of obligation on the Board, the clear link in the statutory text and importance of the Board's function in fulfilling the objects of the Act means it will often be a consideration of the Board. The word 'may', though used in a permissive context, does not allow a capricious or irrational exercise of the power.

35 In any case, I am not satisfied on the facts that the lack of a reference to s 35(2) in the minute or the letter refusing the plaintiff's application is a sufficient basis on which to draw the inference that the Board did not address 35E(2). The Board has not provided a foundation for assessing its reasoning process. In these circumstances, the plaintiff's task of establishing error on the basis of the Board's failure to consider a relevant consideration is difficult. In the overall circumstances, I do not consider such an error has been demonstrated.

36 In assessing whether the Board has reached a decision which is unreasonable, the Court must scrutinise the scope, subject and purpose of the particular statutory provisions in issue along with the facts as available at the time of the decision.[9] The scope of the phrase 'the interests of justice' is not defined in the Act. It is a phrase that is frequently considered by courts in many contexts, and is one that appears often in legislation. In relation to the use of the phrase in cross-vesting jurisdiction, the Full Court of the Family Court in Re Chapman & Jansen said per Nicholson CJ:

In my view the expression 'the interests of justice' is not one which should be narrowly defined and indeed it may not be particularly helpful to attempt to define it at all. I do not think that it is a concept which courts should find difficult to apply. The interests of justice will vary from case to case, and I think that, in general, in considering applications under this legislation, a broad approach is the approach to be preferred.[10]

37 I consider that the observations of Nicholson CJ apply equally in this case. The phrase 'the interests of justice' is given content by the particular facts and circumstances of a case. In this context, its meaning is broad as it is used as a trigger for the exercise of a discretion to grant relief from the consequences brought about by ss 35D and 35E(1). As part of this inquiry the Board should turn its mind to the actions of the applicant and the consequences, including the financial implications, of granting or not granting the certificate. In doing so, the Board is dependent on the material placed before it. It is not appropriate for the Board to conduct its own investigation where the material provided as part of an application for payment is insufficient to enable to Board to make a reasonable determination in a particular case.

38 In context, the expression 'the interests of justice' may only be about fairness or sympathy for an affected party. Given the underlying benevolent purpose of the Act, the expression may involve consideration of the fact that the application, if refused, would impact on the administration of justice. The expression was doubtless left undefined to enable the Board to exercise a discretion in the broad range of circumstances that may arise in litigation and the legal representation of litigants.

39 In this case, the material placed before the Board by the plaintiff's lawyers was scant. In the circumstances, it is not surprising that the Board did not comment on the interests of justice in the minute or in the letter. There was nothing on the face of the attachments to the application for payment made to the Board that sought to advance a case that it was in the interests of justice for the certificate to be treated as if it had not expired. This is in marked contrast to those cases where the courts have invoked the interests of justice to explain the granting of an extension of time.[11]

40 The Board will assess each application on its merits and on the materials before it. I do not accept that all of the matters set out in the affidavit of support must have been apparent to the Board at the time it made its first decision, nor do I accept that all of those matters were relevant to the Board's task.

41 The Board would have known that the application was seven weeks out of time. I accept this would have been a relevant consideration. I do not consider the Board should be taken to have known from the material that the plaintiff was unlikely to be of means. It would have been apparent to the Board that the application came from Robert Stary Lawyers and the Board may have known that they had lodged many certificates over the years without difficulty. The fact that Robert Stary Lawyers frequently acted for applicants and did so routinely without controversy, or even did so impeccably, was irrelevant. It must be assumed that the one year time limit was fixed by the Parliament after careful consideration and is intended to provide certainty in the operations of the Board and the distribution of the Appeal Costs Fund.

42 The Board would have known that the bulk of the fees were for senior counsel. However the Board could not be taken to have known of the arrangements between counsel, solicitors and client as to fees. Furthermore, assuming that the submission that the amount is modest is accepted, it may not weigh clearly in favour of granting the application for payment. It may mean that the plaintiff's financial circumstances become a correspondingly less significant consideration. In any case, the plaintiff's claim that there would be no harm in treating the certificate as if it had not expired does not follow from the fact that the amount is modest.

43 As is well established, this court is not empowered to substitute its view for that of the Board. Its role in an application for judicial review is to consider whether the decision making process adopted by the Board accorded with requirements at law. The matters advanced by the plaintiff do not provide a basis upon which the Board, acting reasonably, would have been compelled to consider that it was in the interests of justice to treat the expired certificate as if it had not expired. In my view, it cannot be said here, as was said in Li that the Board's decision was plainly unreasonable. There is no sufficient basis in fact upon which the alleged failure to consider a relevant consideration can be inferred.

44 The plaintiff contended that the conduct of the Board following the 30 January decision was relevant in that the letter sent by the Board on 4 February invited the plaintiff to seek reconsideration of the matter which, given the invalidity of the 30 July decision, was practically denied. The Board's failure to ensure a quorum was present at the time of the 30 July decision is regrettable. It is to be expected that an institution such as the Board should be well informed of the necessary conditions for the exercise of its statutory powers. However, notwithstanding this, I do not accept that the letter of the Board was an invitation to request a reconsideration of the 30 January decision. Nor do I accept that the facts surrounding the 30 July decision can usefully shed light on the 30 January decision. In the circumstances, I do not consider that the plaintiff had an entitlement to have his application reconsidered.

45 It was conceded by the defendant that there is nothing in the legislation that prevents the plaintiff from making a further application to the Board for payment under the certificate on the basis of fuller material. In the event that such an application were made, the Board's failure to ensure a quorum was present at the time it purported to make the 30 July decision is potentially relevant as a cause of significant further delay in the making of any application.

46 One assumes that a Board acting reasonably and in accordance with its statutory powers would, in certain cases, allow an application made under a certificate that is lodged seven weeks late. However, the Board must be given sufficient material upon which it can adequately evaluate where the interests of justice lie. Such material was not provided in this case.

47 For these reasons, I do not consider that the 30 January decision should be quashed.

Consequences of the invalidity of the 30 July decision

48 I accept that the 30 July decision is invalid as there was no quorum as required by s 28 of the Act. For the reasons already stated, this invalidity means that the 30 January decision determines the plaintiff's application in this case.

49 The issue arises as to whether the Court should order that the 30 July decision be quashed. The remedy of certiorari is discretionary[12] and it may be refused where it would be futile.[13] In this case, it was submitted by the defendant that the Court should decline to quash the 30 July decision as doing so would be of no utility. I accept this submission.

[1] DPP v Johnson [2011] VSCA 288.

[3] Victoria, Parliamentary Debates, Legislative Assembly, 6 May 2004, 1052 (Mr Hulls, Attorney General).

[8] See eg, Julius v Bishop of Oxford [1880] 5 App Cas 214, 222-3; Finance Facilities Pty Ltd v Federal Commissioner of Taxation [1971] HCA 12; [1971] 127 CLR 106, 134-5; Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61; [1994] 182 CLR 51, 84-5.

[9] See Minister for Immigration and Border Protection v Singh [2014] FCAFC 1 [48].

[11] See generally LexisNexis Butterworths Civil Procedure Victoria, vol 1 (at service 279) [I 3.02.5] 'Extension must be supported on proper material' which states:

Although time fixed by the rules for taking a step in a proceeding may be extended by the court, the rules must prima facie be obeyed, and the court is not justified in extending the time except upon proper material. Were it otherwise, a party in breach would in effect have an unqualified right to an extension of time. This would defeat the purpose of the rules as to time, which is to provide a timetable for the conduct of the litigation. See Ratnam v Cumarasamy [1964] 3 All ER 933; [1965] 1 WLR 8; Wainwright & Son Pty Ltd v Gibson [1921] VicLawRp 2; [1921] VLR 8 at 10; Hughes v National Trustees, Executors & Agency Co of Australasia Ltd [1978] VicRp 27; [1978] VR 257 at 263.

See also Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; (1984) 3 FCR 344, 348 where Wilcox J, in considering the interests of justice in the context of an extension of time to appeal held:

Although the section does not, in terms, place any onus of proof upon an applicant for extension an application has to be made. Special circumstances need not be shown but the court will not grant the application unless positively satisfied that it is proper so to do. The "prescribed period" of twenty-eight days is not to be ignored (Ralkon Agricultural Co Pty Ltd v Aboriginal Development Commission [1982] FCA 153; (1982) 43 ALR 535 at 550). Indeed, it is the prima facie rule that proceedings commenced outside that period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at 416). It is a pre-condition to the exercise of discretion in his favour that the applicant for extension show an "acceptable explanation of the delay" and that it is "fair and equitable in the circumstances" to extend time (Duff at 485; Chapman v Reilly (unreported, Federal Court of Australia, Neaves J, 9 December 1983) at 7).

[12] Fitzgerald v Director of Public Prosecutions (1991) 24 NSWLR 45 at 50; Re McBain; Ex parte Australian Catholic Bishops Conference [2002] HCA 16; (2002) 209 CLR 372; Hanna v O'Shane [2003] NSWSC 1055 at [14]-[18].

[13] Mann v Medical Practitioners Board (Vic) [2004] VSCA 148; (2004) 21 VAR 429 [17].

Legislation Act 1984

At a glance

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Judgment (91 paragraphs)

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Legislation Cited (16)

Cases Cited (6)