Crago, Peter & Anor v Multiquip Pty Ltd & Anor [1997] FCA 1325

FEDERAL COURT OF AUSTRALIA

PRACTICE & PROCEDURE - whether orders which have been entered, should be set aside - whether the respondents consent - whether there is actual and present consent - whether the applicants are entitled to specific performance - whether there is an estoppel.

Federal Court Rules, O 35 r 7(2)

PETER CRAGO & ANOR v MULTIQUIP PTY LIMITED & ANOR NG 655 of 1994 LEHANE J SYDNEY 20 NOVEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 655 of 1994

BETWEEN: PETER CRAGO & ANOR

Applicant

AND: MULTIQUIP PTY LIMITED & ANOR

Respondent

JUDGE(S): LEHANE J

DATE OF ORDER: 20 November 1997

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The motion, in so far as it seeks relief under O 35 r 7, is dismissed. 2. 11 December 1997 is the date fixed by which a notice of appeal from the orders made on 10 September 1997 may be filed and served.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 655 of 1994

BETWEEN: PETER CRAGO & ANOR

Applicant

AND: MULTIQUIP PTY LIMITED & ANOR

Respondent

JUDGE(S): LEHANE J

DATE: 20 NOVEMBER 1997

PLACE: SYDNEY

EX TEMPORE REASONS FOR JUDGMENT HIS HONOUR: On 10 September 1997 I made final orders in this matter by which the application was dismissed with costs. On the same day I published reasons for judgment. The orders were entered on 22 September 1997. By notice of motion filed on 26 September 1997 the applicants seek an order that the orders made on 10 September and the reasons therefor published on 10 September be withdrawn. The applicants also seek certain consequential orders. Because the orders made on 10 September have been entered, the motion was treated as one by which the applicants sought an order, under O 35 r 7(2) of the Federal Court Rules, setting aside the orders of 10 September. The entry of the orders is a fact of considerable significance. Before entry the court has a general discretion to set aside a final judgment or order. The principles on which that discretion is exercised have been examined in a number of authorities and need not be considered in detail now. It is sufficient to say that the discretion is exercised sparingly and considerable weight is given to the importance of finality in litigation; but it will be exercised in the clear case where the interests of justice require it. On the other hand, once an order has been entered, authority binding on this court makes it clear as a general proposition that the court no longer has power to set aside the order. It is sufficient for present purposes to refer to the judgment of the Full Court in Caboolture Park Shopping Centre Pty Limited v White Industries (Queensland) Pty Limited (1993) 45 FCR 224 in which these matters are discussed in detail. To the general rule thus laid down there are some well established, specific exceptions. They are those set out in sub r (2) of O 35 r 7. It was accepted in argument on the motion that the only exception relevant for present purposes is that set out in para (2)(f). The effect of the exception is that a final order which has been entered may be set aside where the party in whose favour the order was made consents. The respondents are the parties in whose favour the orders were made on 10 September 1997. As a matter of fact, neither respondent now consents to the setting aside of the orders. The applicants contend, however, that they should be treated as having consented in circumstances which I shall proceed briefly to describe. One of the issues in the proceeding was whether machines manufactured by the first respondent known as the E2O and E3O, represented by it (as I held) to be suitable for the incubation of ostrich eggs, were in fact, owing to certain design characteristics, unfit for that purpose. In the course of the interlocutory stages of the proceeding a number of questions were agitated between the parties as to the extent of discovery and evidence in relation to that issue. It is unnecessary to trace the course of that in any detail. What is important is that on 14 September 1995 an agreement was reached between the applicants and the first respondent. The agreement was noted by the court on that day. It provides as follows: 1. The First Respondent undertakes not to read at the trial or seek to elicit in oral evidence or rely upon as evidence relevant to the issue of liability in these proceedings any affidavit material or other fact document or evidence which relates to: (a) the number of incubators and hatchers manufactured and/or sold by the First Respondent as designed or suitable for the incubation or hatching as the case may be of ostrich eggs (b) the number of customers or other persons who at any time used or have used for incubation or hatching of ostrich eggs incubators or hatchers manufactured or sold by the First Respondent (c) the number of or absence of complaints or enquiries in the nature of complaints made to the First Respondent or of which the First Respondent is or was at any time aware pertaining or apparently pertaining to problems experienced in the incubation and/or hatching of ostrich eggs in incubators and/or hatchers manufactured by the First Respondent. except in answer to any such evidence led by the Applicants PROVIDED always that this is without prejudice to the ability of either party to lead evidence (if otherwise admissible) from any specific individual users of Multiquip incubators and hatchers. The applicants now submit that the effect of that agreement was that the first respondent might not rely, as to the issue to which I have referred, on evidence concerning any of the particular matters set out in paragraphs 1(a), (b) and (c) of the agreement. The submission proceeds to a contention that the agreement was binding on the parties to it and determined the way in which they were obliged to conduct the litigation. It is then said that the agreement was performed by the parties during the trial, that is to say that no party acted otherwise than in accordance with its obligations under the agreement, but that nevertheless the judgment of the court proceeded on a basis, evident from my reasons of judgment, which was inconsistent with the agreement and inconsistent with the way in which the trial had been conducted. Particularly, the applicants cite a number of examples of inferences drawn and findings made in my reasons for judgment relying upon evidence which emerged during the trial to the effect that the two machines in question were in use in large numbers throughout Australia for the purpose of hatching ostrich eggs and, to a large extent, were used successfully. The final step in the argument is that the first respondent is now, by force of the agreement or perhaps by force of an estoppel arising from it, precluded from withholding its consent to the setting aside of a judgment which, it was submitted, proceeds upon a footing inconsistent with the basis upon which it had agreed to conduct the litigation and did so. It is said also that the second respondent is in no different position than the first. That is said to be so on the basis of arrangements between the two respondents as to the ultimate responsibility for any judgment against the second respondent and as to the manner in which, as between the respondents, the trial was to be conducted. The second respondent, which is not itself a party to the agreement of 14 September 1995, denies that it is bound by the agreement and maintains that if the present motion were to succeed against the first respondent there is no basis on which it could succeed against the second respondent. The immediate difficulty with the applicants' submission is that the relevant exception to the general rule about setting aside an order which has been entered is expressed to be one which applies where the party in whose favour the order was made consents. That is cast in terms of an actual and present consent, and actual and present consent is lacking. It is, I suppose, conceivable that a party might in some circumstances be held to have consented even though it does not voluntarily do so; and those circumstances might possibly arise on equitable principles, in either of two ways. One might be where the agreement relied upon is one of which specific performance would be granted, so that there is in the availability of that remedy a basis for saying that, because equity regards as done that which ought to be done, the consent which ought to be given has been given. A similar result might perhaps be reached - this is the other of the two possibilities - by an application of principles underlying the developing doctrines concerning estoppel. If one first considers specific performance, what is immediately apparent is that an entitlement to specific performance does not depend upon mere proof of an agreement to act in a particular way. Without going into a degree of detail which is unnecessary for present purposes, it may be said as a general proposition that the remedy of specific performance both requires as a condition of its availability proof of a number of matters and is subject also to a number of discretionary considerations. One cannot treat specific performance as if it had been granted in circumstances where a party's entitlement to the remedy has not been established. Establishing an entitlement to specific performance is, of course, a matter for evidence and argument in appropriate proceedings; so far as the material before me on the motion goes, it is clear, I believe, that I cannot proceed on the assumption that if, as a matter of construction, the agreement of 14 September 1995 imposed an obligation on the respondents to consent, in some circumstances, to have the order set aside, specific performance of that agreement would in the present circumstances be granted. In considering the appropriateness of specific performance it would be necessary, among other things, to consider the course which the trial actually took and in that respect, while no party attempted, in argument on the motion, an exhaustive analysis of what took place during the trial, a number of things are evident. One is that a substantial amount of evidence was admitted, largely without objection, as to the widespread use of the machines. Secondly, the first respondent in written submissions suggested that I should draw inferences, substantially those which in fact I drew, from that among other evidence. Thirdly, it is not suggested that the applicants at the trial objected to those submissions or suggested that I should not take them into account in the way I did. Indeed, no reference was made during the trial to the existence of the agreement upon which the applicants rely. If one turns to the possibility of an estoppel it is, in my view, clear that the kinds of discretionary considerations which would be relevant in considering the availability of specific performance are also likely to be relevant in determining whether there is an estoppel. The matter could be finally determined only upon a close analysis of evidence concerning the conduct of the trial and the course of dealings between the parties between the time when the agreement was made and the conclusion of the trial. In summary, it would be relevant, both to the state of the contractual obligations between the parties at the conclusion of the trial and to discretionary matters relevant to the application of any principle of equity, that evidence of the sort to which I have referred, though not evidence of the precise detail of numbers of machines sold or of complaints, was admitted without objection and the submissions to which I have referred were made, again without objection. Those considerations have the result, I think, that I need not consider in detail other particular matters relied upon by the applicants. For example, among the considerations arising from the course of the trial, the applicants refer particularly to what was said to be a failure to ask questions in cross-examination of expert witnesses called by the applicants designed to challenge their opinions by reference to evidence as to the widespread use or satisfactory use of the machines. It would be necessary, if that matter were to be pursued, for the court to be referred in detail to the particular cross-examination, but what is more important for present purposes is that if there were a submission to be made on the basis of the rule in Browne v Dunn the time for making it was at the trial. I am aware that, as is almost invariably the case, I speak with the benefit of hindsight not available to the parties during the trial. It may in retrospect be unfortunate that the existence of the agreement was not made apparent, and its effect if necessary argued, at the trial; but the considerations to which I have referred necessarily produce the result, in my view, that I cannot grant the applicants the relief which they seek. No consent being either freely given or established I have no power to make the order sought. The consequence is that the motion, so far as it seeks relief under O 35 r 7, must be dismissed. [Discussion ensued as to an extension of time to lodge a notice of appeal]. In my view, the appropriate course is to make an order under O 52 r 15(1)(a)(iii) fixing, as the date by which a notice of appeal from the orders made on 10 September 1997 may be filed and served, 11 December 1997. I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Lehane