Interlocutory Application 3
77 Interlocutory Application 3 concerned an application for a stay of the costs orders of the primary Judge in proceeding ACD19/2021. We note that on the day of the hearing the appellant was plainly conflicted about whether or not he should press this application. We also hold reservations regarding the utility of the stay, particularly given the time in which it has come before the Court, being at the hearing of the substantive appeal. Nonetheless, the appellant pressed the application for the stay of those costs orders pending the outcome of the substantive appeal in proceeding ACD19/2021.
78 The appellant did not rely on any affidavit material in support of this application. At the hearing in oral submissions the appellant submitted as follows:
DR QUACH: What I am suggesting and I have said all along, I had to drag them through the courts - the court over a number of interlocutory proceedings before they were willing to pay. Now, being the person who dragged them through the courts and having to - having to do all of that, then I should be awarded costs because I made them pay by commencing the proceeding. And there have been a number of rulings by the court below and other courts to say that their justification for delaying payment was not legal. I refer to Griffiths Js ruling on 1 August 2019 - 31 August 2019 where he ruled that the subpoenas to the Medical Council were not within the 40 jurisdiction of this court and were irrelevant.
I rely on Quach v Horvath [2021] NSWSC 1401 at paragraph 59 where Harrison J ruled that the complaint from the Canberra Hospital was not jurisdictional ..... to commence an inquiry which ballooned into all these things that MLC is asking access for. So what I'm trying to say is that I made them pay me by dragging them through the courts, having favourable rulings in this court and in the New South
Wales Supreme Court as well as the Full Court of the Federal Court which is against their reasons for delaying payment. For that reason, any order of costs against me for making them pay is a gross injustice.
…
Well, in essence, the prejudice to my position as a person who is bringing MLC to comply with the contract which they breached for several years by not paying - so I think, in my respectful submission, costs should be stayed until the Full Court determines the appeal.
(transcript p 62-63)
79 We note also that the appellant made somewhat misguided submissions concerning correspondence he received from the respondent prior to the hearing before the primary Judge. Relevantly, the appellant submitted that it was unfair of the primary Judge to have made a costs order against him, in circumstances where the appellant alleges the respondent had agreed to pay his costs in what he termed the "letter of forfeiture" dated 11 February 2021. The appellant submitted:
DR QUACH: No, I press the application that I have been treated unfairly by Rares J and in the application for a stay of the order for costs, and it is truly unfair that both parties start the proceeding on 1 March 2021, believing that Rares J would order costs in my favour. That appears in the letter from MLC dated 11 February 2021, where they said they admit the claim and pay your costs. The last page of their paragraph - last page of their letter. And I had every expectation that I would - I would be - - -
COLLIER J: So which letter is this again, I'm sorry?
DR QUACH: Letter of 11 February 2021, letter of forfeiture.
COLLIER J: Is that in the appeal book?
PERRY J: That offer to pay your costs was on the basis that you would accept the $1 million that was being given to you by MLC and that would bring the proceeding to an end, not that you would then bring a - expand the proceedings to make claims for compensation, interest and costs.
…
DR QUACH: If I may, can I refer to the page 1 of 4 March 2 transcript, where they say that that payment was not contingent on the outcome of the proceedings, they were - no - - -
PERRY J: No, but this isn't - you're here, talking about whether you should be paying costs.
DR QUACH: Well - - -
PERRY J: And your point taking the Court to a letter in which you're being offered $1 million effectively on an assumption that the proceedings will come to an end, but, in fact, you didn't bring the proceedings to an end. You then continued with them and the matter went to trial, so why shouldn't they get their costs?
DR QUACH: No. I don't think that's how it transpired, your Honour.
DR QUACH: - - - the letter well. On the last page, it starts off with: "Having admitted your claim and agreeing to pay your costs." With respect, Justice Perry, I don't think that's how Mr Donaldson has presented to the Court when he first spoke about saying that they were willing to pay regardless of the outcome of the trial.
COLLIER J: Okay.
DR QUACH: And that - - -
COLLIER J: I'm sorry, Dr Quach, I just need to - you don't have a copy of the letter here. So I'm looking at page 470:
Costs of the Federal Court proceedings. In addition to you accepting your claim as detailed in this letter MLCL also offers to pay your ordinary "costs" of your litigation against MLC on the basis that you are a self-represented litigant, less any offsets for various costs order made against you by the Court.
However, the next paragraph is:
Having admitted your claim and agreeing to pay your costs as set out in this letter, our client is of the view that the controversy, the subject of the Federal Court proceedings, has now been resolved. That being the case, I invite you to contact me with a view to agreeing on consent orders disposing of the proceedings, which can be provided to his Honour, Rares J. I look forward to hearing from you in this regard and by no later than cob 18 February 2021.
DR QUACH: Yes. But - - -
…
DR QUACH: Because I think - I think, if I may - I need to draw the distinction between what your Honour has said was the letter being an offer to pay, subject to you getting consent orders as opposed to the reason why it hasn't been paid, we need an update - an up-to-date account number. So they, in fact - and in fact today, Mr Donaldson had said, "We will pay it anyway."
COLLIER J: When's that?
DR QUACH: Earlier today.
COLLIER J: Earlier today, Mr Donaldson said they would pay your costs?
DR QUACH: No, they will pay their - they will pay the $1 million.
COLLIER J: Yes. What has that to do with costs?
DR QUACH: Well - - -
COLLIER J: There's a big difference between getting paid a lump sum payout - - -
DR QUACH: Well, your Honour - - -
COLLIER J: - - - and costs.
…
DR QUACH: I'm trying to make the distinction. I'm trying to make the distinction that this was not a deal that I broke. I didn't welsh on this deal and it wasn't agreed to. They have always said - and it has been clear in the court transcript - that they were going to pay anyway, so in relation to the payment of $1 million, that wasn't - that wasn't, as they say, contingent on the outcome of this proceeding. And in regards to the cost side of things, there were - I had to put in, in that interlocutory application which your Honour heard - heard about - for compensatory damages, costs and interest. So the cost part of it needed to be examined by a Court, and in my respectful submission, that needed to be - that needs to be stayed. I mean, that needed to be stayed some time ago and it should be stayed now as well, because I'm pressing it. Because it is substantive injustice for somebody who had to bring a major proceeding in a major court against an insurance company to make them pay.
COLLIER J: And you lost.
(emphasis added, transcript pp 56-63)
80 In reply, Counsel for the respondent submitted that the appellant's submissions had strayed from an application seeking a stay into, rather, a challenge to the primary Judge's costs orders, where no ground of appeal related to the exercise of discretion of the primary Judge in ordering costs against the appellant. In addition, Counsel submitted that the appellant had failed to adduce any evidence or satisfactory reason to justify the Court exercising its power to grant the stay, pending the outcome of the appeal.
81 In National Retail Association v Fair Work Commission (No 2) [2014] FCA 664 the Court made the following observations in respect of stay applications:
11. Relevant principles to which the Court ought have regard in the present circumstances include the following:
• An order granting a stay is an interlocutory order at the discretion of the primary judge, although the discretion must be exercised judicially: National Australia Bank Limited v Norman [2009] FCAFC 13 at [44].
• Further, the discretion of the Court in granting a stay ought not be exercised lightly, and only in circumstances where there would be so adverse and serious a consequence that interlocutory intervention should take place notwithstanding that there has not been an opportunity for full consideration of the appeal: Nikolaides v Legal Services Commissioner [2005] NSWCA 91 per Bryson JA at [18]; Thomson v Young [2013] NSWCA 300 at [8]. Circumstances warranting the grant of a stay have been described as "exceptional" (Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No. 1) [1986] HCA 84; (1986) 161 CLR 681 at 683; Rahme v Commonwealth Bank [1993] HCA 62; (1993) 117 ALR 618 at 620; Petrotimor Companhia de Petroleos S.A.R.L. v Commonwealth of Australia [2003] FCAFC 82 at [24]; Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256).
• To that extent the balance of convenience plays an important role in determining whether an order ought be made: Bannister & Hunter Pty Ltd v Transition Resort Holdings Pty Ltd [2014] NSWCA 87 per Ward JA at [18].
• The Court may be minded to refuse a stay where it is satisfied that there are no serious questions for the determination in the appeal or review: Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 at [18]; ACES Sogutlu Holding Pty Ltd v Commonwealth Bank of Australia [2014] NSWCA 84 at [6]. Conversely, the Court may be minded to grant a stay where, on a preliminary assessment of the case, the Court is satisfied that grounds of appeal or review have merit: Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 695; Attorney-General for the State of Queensland v Fardon [2013] QCA 299 at [15].
• The Court may be minded to grant a stay where it is satisfied that any subsequent appeal or review would be rendered nugatory should a stay be refused: Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 695; Jennings Construction Limited v Burgundy Royale Investments Proprietary Limited [1986] HCA 84; (1986) 161 CLR 681; Paringa Mining & Exploration Co PLC v North Flinders Mines Ltd (No 2) [1988] HCA 53; (1988) 165 CLR 452; National Australia Bank Limited v Norman [2009] FCAFC 13 at [43].
• Decisions at first instance should not be treated as merely provisional. A successful party in litigation is entitled to the fruits of its judgment, and courts should not be disposed to delay the enforcement of orders. A sufficient basis must be shown to outweigh these considerations: Keane JA in Cook's Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453 at 455; Attorney-General for the State of Queensland v Fardon [2013] QCA 299 at [15]; Julia Farr Services Inc v Hayes [2003] NSWCA 142 at [24].
• The Court will consider whether a stay is warranted in the interests of justice: Alexander v Cambridge Credit Corporation Limited (1985) 2 NSWLR 685 at 694; NSW Bar Association v Stevens [2003] NSWCA 95 at [83]; ACES Sogutlu Holding Pty Ltd v Commonwealth Bank of Australia [2014] NSWCA 84 at [5].
82 Applying these principles to the application currently before the Court, we are not persuaded that a stay of the costs orders made by the primary Judge in the substantive judgment should be granted. We so find for the following reasons:
The appellant did not file any affidavit or material in support of his interlocutory application for a stay of the costs order, to which the Court could have regard.
The appellant has not demonstrated that there would be so adverse and serious a consequence that interlocutory intervention should take place to stay the costs order made at first instance, notwithstanding that there has not been an opportunity for full consideration of the appeal presently before the Court in ACD19/2021.
The appellant has made no submissions in relation to the balance of convenience in this case.
In relation to the question whether there are serious questions for the determination in the appeal or review, I note again that the appellant did not appeal from the exercise of the primary Judge's discretion concerning the costs order. It may be that there are other serious questions for determination in the appeal, however the appellant has not argued that the costs order should be stayed for that reason.
To the extent that a successful party in litigation is entitled to the fruits of its judgment, and courts should not be disposed to delay the enforcement of orders, examination of the Court file in ACD18/2019 reveals that, following the substantive decision of Rares J presently the subject of appeal:
• An order for security for costs was made by Cheeseman J against the appellant on 20 May 2022 in the sum of $39,395; and
• The costs order of Rares J of 2 March 2021 has already been the subject of taxation, resulting in an order by Registrar Parkyn of 1 July 2022 fixing the respondent's costs in the amount of $169,612.17 and the issue of a certificate of taxation.
Plainly there has been significant activity by the parties in respect of the costs orders of Rares J following the filing of Interlocutory Application 3 on 9 December 2021, including orders for security for costs and taxation of those costs. The appellant has not demonstrated why the respondent should be denied the benefit of those orders.
83 Perhaps the most compelling reason the Court should refuse the appellant a stay of the costs order of Rares J of 2 March 2021 is that the primary reason the appellant argues for such a stay simply lacks merit. In summary, the appellant argues that the primary Judge's costs order in favour of the respondent was "unfair" because the respondent had, in essence, made an unconditional, irrevocable and open-ended offer to the appellant to pay all of his costs, indefinitely, in connection with his litigation against it. The appellant in particular relied on the so-called "letter of forfeiture" from the respondent to him of 11 February 2021.
84 This argument is fundamentally misguided. The letter of 11 February 2021 was a letter from the lawyers of the respondent to the appellant in which the respondent offered to pay the appellant a settlement amount of $1,014,625.65 referable to the period from 9 August 2014 until 28 February 2021, and noted its view that entitlement to further benefits under the appellant's policy was subject to attendance by the appellant at a doctor regularly for treatment and provision of a Treating Doctor's Report. The letter concluded:
Costs of the Federal Court proceedings
In addition to accepting your claim as detailed in this letter, MLCL also offers to pay your ordinary costs of your litigation against MLCL on the basis that you are a self-represented litigant, less any offsets for various costs orders made against you by the Court.
Resolution of the Federal Court proceedings
Having admitted your claim and agreeing to pay your costs as set out in this letter, our client is of the view that the controversy the subject of the Federal Court proceedings has now been resolved. That being the case, I invite you to contact me with a view to agreeing on consent orders disposing of the proceedings which can be provided to his Honour Justice Rares. I look forward to hearing from you in this regard and by no later than COB 18 February 2021.
85 The primary Judge observed in relation to this correspondence:
MLC seeks to resolve the matter
47. On 11 February 2021, MLC's solicitors wrote an open letter to Mr Quach in which it noted that many of its important evidentiary requirements, that were conditions necessary to establish a claim, had not been met. The letter said that, nevertheless, MLC had determined that it would waive those important requirements, accept his claim for total disability from 9 August 2014 to 28 February 2021 and refund premiums that Mr Quach had been paying in the meantime. That involved MLC agreeing to pay Mr Quach a total of $1,014,625.65 which it intends to pay without deduction of any tax, once Mr Quach gives it details of a bank account to which it can transfer the money.
48. The letter said that because his policy will continue, some way into the future, until he is aged 65, it wanted to remind him of pertinent information about which he needed to satisfy it in respect of any further payments. Those are that, first, if he was not working in any capacity, he would fall within the definition of total disability, provided that his inability was caused by injury or sickness, and of the corresponding requirement in the case of partial disability. Secondly, the policy required him to be treated regularly by an appropriately qualified doctor in order to be eligible to receive benefits. The letter stated:
Accordingly, to be entitled to further benefits under your policy you must, amongst other things, attend a doctor regularly for treatment and have a Treating Doctor's Report completed so that MLCL can assess whether you continue to be Totally Disabled or Partially Disabled, and confirm that you are undergoing treatment as required by the policy. Please note that these ongoing requirements are at your own cost.
Given these provisions, should you wish to pursue an ongoing claim, MLCL may also contact your treating doctor or specialist by phone and request a medical report directly from them. MLCL may also ask you to attend an Independent Medical Examination by one of their chosen specialists. MLCL will pay for these if required.
We may also require financial information about your earnings.
49. MLC offered to pay Mr Quach's ordinary costs of the proceeding on the basis that he was a litigant in person, less any offsets for various costs orders already made against him. The letter also said that, having admitted his claim and agreed to pay costs, MLC was also of the view that the controversy between the parties had now resolved and asked Mr Quach to contact its solicitors with a view to agreeing consent orders.
50. As is evident from his unfortunate, self-defeating behaviour in the way he has pursued his claim under the policy and his conduct of this litigation and others, Mr Quach is not a man to come to any sensible agreement. On 20 October 2017, F. Gleeson and Simpson JJA and Sackville AJA made orders under the Vexatious Proceedings Act 2008 (NSW) against Mr Quach: Quach v New South Wales Health Care Complaints Commission [2017] NSWCA 267.
86 It does not appear to be in dispute that Dr Quach did not accept the terms of the offer of the respondent, although it also appears that he has been paid the settlement monies offered by the respondent in the letter of 11 February 2021 (transcript p 17). Plainly the offer of 11 February 2021 by the respondent to pay the appellant's costs was referable to settlement of the proceedings in ACD18/2019, consent orders being provided to the primary Judge, and discontinuance of the proceedings by the appellant. None of this happened. There is no merit in the appellant's interlocutory application, being founded on his erroneous belief that he could continue the proceedings and the respondent would fund that further Court action against it.
87 Interlocutory Application 3 is dismissed.