Gann v Hosny (No 2) [2017] VSCA 318 (2 November 2017)

Last Updated: 2 November 2017

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2017 0050

JASON WILLIAM GANN	Applicant
V
JOSEPH HOSNY	Respondent

---

JUDGES:	SANTAMARIA, KAYE and ASHLEY JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	2 November 2017
MEDIUM NEUTRAL CITATION:	[2017] VSCA 318

---

PRACTICE AND PROCEDURE – Costs – Costs of application for leave to appeal – Where application for leave to appeal had no prospects of success – Where applicant failed to establish elements of alleged fraud and perjury – Where conduct of applicant impugned – Costs payable on indemnity basis – Supreme Court (General Civil Procedure) Rules 2015 r 64.38.

---

APPEARANCES:	Counsel	Solicitors
On the papers

SANTAMARIA JA

KAYE JA

ASHLEY JA:

Brief procedural history

1 The respondent was the successful plaintiff in a common law proceeding heard and determined in the County Court. On 6 June 2012, following a seven-day trial, the respondent was awarded judgment in the sum of $325,000 (‘the damages judgment’).^[1]

2 The applicant subsequently sought leave to appeal against the damages judgment, relevantly, on the ground that it had been procured by fraud on the part of the respondent of which the applicant had only recently become aware.

3 On 16 March 2015, this Court granted the applicant leave to appeal and allowed the appeal to the extent that the hearing and determination of the question whether the damages judgment had been procured by fraud be remitted for consideration by the County Court (‘the remittal appeal’).^[2]

4 On 12 April 2017, a judge in the County Court dismissed an application by the applicant to set aside the damages judgment on the ground that it had been procured by fraud.^[3]

5 On 20 October 2017, this Court refused the applicant leave to appeal from the decision made on 12 April 2017 to dismiss the application to set aside the damages judgment.^[4] At the time of publishing its reasons, the Court directed the parties to file written submissions in relation to the costs of the application for leave to appeal.

6 The respondent now seeks orders, relevantly, that the applicant pay the costs of the respondent on an indemnity basis, including any reserved costs in respect of the remittal appeal and the present application for leave to appeal, and that the respondent be entitled to interest on the damages judgment and costs from the date of the damages judgment.

The remittal appeal and subsequent dismissal of the applicant’s claim

7 On 12 December 2014, this Court granted the applicant an extension of time in which to apply for leave to appeal from the damages judgment.^[5] Subsequently, the applicant applied for leave to appeal on the sole ground that the damages judgment had been procured by fraud.^[6]

8 As indicated above, on 16 March 2015, this Court granted the applicant leave to appeal and allowed the appeal to the extent that the hearing and determination of the question whether the damages judgment had been procured by fraud be remitted for consideration by the County Court. This Court made the following orders:^[7]

In ‘Other Matters’, we note:

1. The hearing concerned an application brought by the appellant, filed on 22 January 2015, seeking leave to issue a subpoena to the Victorian WorkCover Authority. Prior to the hearing, the parties were asked to address the Court on the issue of how the allegation of fraud, the appellant’s single ground of appeal, should be determined. Prior to the hearing the President made a determination under s 11(1A) of the Supreme Court Act 1986 (Vic).
2. The respondent, by his counsel, undertook to the Court that he will not seek to enforce the judgment entered in his favour on 6 June 2012, whether in Australia or elsewhere in the world, until the hearing and determination of the issue of fraud by the County Court, or further order.

100. It is anticipated that:
     1. subject to any contrary direction of the County Court judge, if the judge who hears and determines the issue of fraud rejects the allegation of fraud, the original judgment will stand, but if the judge finds that the fraud is proved, he or she should make a reassessment of the damages;
     2. provided that Judge Davis does not recuse herself, the decision as to whether Judge Davis should hear the issue of fraud is to be determined by the Chief Judge of the County Court;
     3. the costs of the appeal will be determined after the determination of the issue of fraud.

The orders are:

1. The appeal is allowed to the extent that the issue of whether [the damages judgment] was procured by the fraud of the respondent is referred to the County Court for hearing and determination by such judge as the Chief Judge considers appropriate.
2. The appeal is otherwise dismissed without an adjudication on the merits.

3. The costs of the appeal are reserved.

9 By writ dated 18 June 2015, the applicant formulated his claim that the damages judgment be set aside on the ground of fraud. He pleaded a number of matters in support of that allegation.^[8] By his defence, the respondent put in issue many of those matters. The issues were litigated before a judge in the County Court on 24, 25 and 28 November 2016. On 12 April 2017, the judge dismissed the applicant’s claim.

The application for leave to appeal

10 On 10 May 2017, the applicant filed his application for leave to appeal from the decision to dismiss his claim that the damages judgment be set aside on the ground of fraud.

11 The proposed grounds of appeal were various.^[9] They were as follows:

1. The learned trial judge erred in finding that the Applicant had not discharged the burden of proving the Respondent’s fraud.
2. The learned trial judge erred in that the judgment was against the evidence or the weight of the evidence or not reasonably open on the evidence.
3. The learned trial judge erred by failing to consider the whole or a substantial part of the Applicant’s case.
4. The learned judge erred by determining the proceeding by reference to matters other than the evidence and by taking into account irrelevant considerations.
5. The learned judge erred by drawing inferences that could not be drawn from the evidence.
6. The learned trial judge erred by treating the evidence adduced in proof of the Respondent’s claim for pecuniary loss as not evidence adduced in proof of his claim for non-pecuniary loss.

7. The learned judge erred by misdirecting himself as to the law.

8. The learned judge erred by not treating as fresh evidence the evidence of the Respondent’s post-trial admissions made by his plea of guilty and by the agreed statement of facts presented on the plea.

12 On 20 October 2017, this Court refused the applicant leave to appeal. The Court held that, not only did the applicant’s proposed appeal not have a real prospect of success,^[10] but that it had no prospect of success at all.^[11] The Court reserved the question of costs and directed the parties to file written submissions in relation to the costs of the application for leave to appeal.

13 As indicated above, the respondent now seeks orders, relevantly, that the applicant pay the costs of the respondent on an indemnity basis, including any reserved costs in respect of the remittal appeal and the present application for leave to appeal, and that the respondent be entitled to interest on the damages judgment and costs from the date of the damages judgment.

Costs

14 Rule 64.38 of the Supreme Court (General Civil Procedure) Rules 2015 provides that this Court ‘may make any order for the whole or any part of the costs of an application or appeal as it thinks fit’. This Court has an absolute and unfettered discretion in resolving the question of costs. The discretion must be exercised judicially, not arbitrarily, capriciously or on grounds unconnected with the litigation. Generally, the costs of an appeal, like the costs of a trial, follow the event.^[12]

15 In our opinion, the costs order which the respondent seeks should be granted for four reasons, the first three of which are related.

16 First, as is plain from the reasons of this Court in refusing leave to appeal, the application for leave to appeal was entirely without merit and should have been recognised from the beginning as hopeless and without any prospect of success.

17 Secondly, on reviewing the evidence at the first trial and the admissions said to have been made in the charge matter, it was not sensibly open to the applicant to argue that the trial judge who delivered the damages judgment was somehow misled by the respondent or his evidence.

18 Thirdly, at the second trial the applicant had comprehensively failed to establish the elements of the alleged fraud and perjury on the part of the respondent.

19 Fourthly, echoing Ashley JA in his reasons for refusing leave to appeal, the applicant’s conduct in bringing the present proceeding, bearing in mind the circumstances in which that proceeding was brought, could only be described as deplorable. That conduct is described in the reasons of Ashley JA.^[13]

Interest

20 By the operation of s 73(4) of the County Court Act 1958, the respondent is entitled to interest accruing on the damages judgment from the time the judgment was given. It seems to us that it is unnecessary for this Court to make any orders with respect to interest.

Conclusion

21 The order of the Court will be that the applicant is to pay the costs of, and incidental to, the present application for leave to appeal and any reserved costs with respect to the remittal appeal on an indemnity basis.

---

^[1] Hosny v Victoria Racing Club [2012] VCC 661 (Judge Davis).

^[2] Gann v Hosny [2015] VSCA 43 (Whelan and Ferguson JJA). On 12 December 2014, this Court granted the applicant an extension of time in which to apply for leave to appeal: Gann v Hosny [2014] VSCA 344 (Weinberg JA and Ginnane and Sloss AJJA).

^[3] Gann v Hosny [2017] VCC 402 (Judge Brookes).

^[4] Gann v Hosny [2017] VSCA 303 (‘Reasons of 20 October 2017’).

^[5] Gann v Hosny [2014] VSCA 344.

^[6] Gann v Hosny [2015] VSCA 43 [3].

^[7] Ibid [11]–[12].

^[8] Reasons of 20 October 2017 [33].

^[9] Reasons of 20 October 2017 [35].

^[10] See Supreme Court Act 1986 s 14C.

^[11] Reasons of 20 October 2017 [2], [23] (Kaye JA), [113] (Ashley JA).

^[12] Major Engineering Pty Ltd v Helios Electroheat Pty Ltd (No 2) [2006] VSCA 114 [5] (Chernov and Ashley JJA and Mandie AJA).

^[13] Reasons of 20 October 2017 [76], [79], [112].