FEDERAL COURT OF AUSTRALIA PRACTICE AND PROCEDURE – judgment and orders – slip rule – whether Court proceeded under a misapprehension in making its previous order – whether previous order of the Court should be set aside. COSTS – costs order in favour of non-party not providing material assistance on the substantive application – whether costs order should have been made. Federal Court of Australia Act 1976 (Cth), s 43. Federal Court of Australia Rules, O 35, r 7(2). Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300, followed. Bent v Gough & Anor (1992) 36 FCR 204, (FC), cited. Caboolture Park Shopping Centre Pty Ltd (in liq) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 (FC), cited. Knight v F P Special Assets Ltd (1992) 174 CLR 178, cited. Ricegrowers Co-Operative Ltd v ABC Containerline NV (1996) 138 ALR 480 (FCA/Tamberlin J), cited. THEO v OFFICIAL TRUSTEE IN BANKRUPTCY & ORS QG 160 of 1996 THEO v OFFICIAL TRUSTEE IN BANKRUPTCY QG 16 of 1998 BLACK CJ, SACKVILLE AND FINN JJ BRISBANE 23 JULY 1998 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY matter no: QG 160 of 1996 BETWEEN: SOL THEO Applicant AND: OFFICIAL TRUSTEE IN BANKRUPTCY FIRST Respondent ANTHONY JAMES BENNETT AND KENNETH PHILP SECOND RESPONDENTS matter no: QG 16 of 1998 BETWEEN: SOL THEO Applicant AND: OFFICIAL TRUSTEE IN BANKRUPTCY Respondent JUDGES: BLACK CJ, SACKVILLE AND FINN JJ DATE OF ORDER: 23 JULY 1998 WHERE MADE: MELBOURNE THE COURT: 1. DIRECTS that Anthony James Bennett and Kenneth Philp be joined as respondents to the applicant's application to set aside Order No 5 made by the Full Court in Proceedings QG 141 and QG 160 of 1996 ("Order No 5") and to the applicant's motion for leave to appeal from the orders made by Kiefel J in Proceedings QB 1422 of 1990 on 2 September 1996 ("the September Orders") (the motion for leave to appeal being proceedings QG 160 of 1996). 2. ORDERS that Order No 5 be set aside, but only insofar as it relates to paragraph 2 of the September Orders ("the Costs Orders"). 3. GRANTS leave in Proceedings QG 160 of 1996 to the applicant to appeal from the Costs Orders. 4. ALLOWS the appeal from the Costs Orders. 5. ORDERS that the September Orders be modified by deleting the Costs Orders. 6. DISMISSES as incompetent the applicant's motion (QG 16 of 1998) for leave to appeal from the costs orders made by Cooper J on 24 August 1995 in Proceedings QB 1422 of 1990. 7. REFUSES leave to the applicant to file an application to set aside the orders (other than Order No 5) made by the Full Court in Proceedings QG 141 and QG 160 of 1996. 8. DIRECTS that there be no order as to costs in relation to the applications dealt with by these orders (Proceedings QG 160 of 1996 and QG 16 of 1998) and the application for leave referred to in paragraph 7. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY MATTER NO: QG 160 of 1996 BETWEEN: SOL THEO Applicant AND: OFFICIAL TRUSTEE IN BANKRUPTCY FIRST Respondent ANTHONY JAMES BENNETT AND KENNETH PHILP SECOND RESPONDENTS MATTER NO: QG 16 of 1998 BETWEEN: SOL THEO Applicant AND: OFFICIAL TRUSTEE IN BANKRUPTCY Respondent JUDGES: BLACK CJ, SACKVILLE AND FINN JJ DATE: 23 JULY 1998 PLACE: MELBOURNE REASONS FOR JUDGMENT The Applications The first application There are two applications before the Court. The first is an application by Mr Theo to set aside an order made by a Full Court, as presently constituted, dismissing an application by him for leave to appeal from orders made by Kiefel J. (We refer to the order made by the Full Court as "Order No 5".) Her Honour, on 2 September 1996, had dismissed a motion by Mr Theo to stay certain orders made by Heerey J on 1 August 1996, in proceedings instituted by the Official Trustee against Mr and Mrs Theo. Her Honour also ordered that Mr Theo pay the costs of the Official Trustee and of the trustees for sale appointed pursuant to the orders of Heerey J "of and incidental to the motion". The Full Court made orders, of which Order No 5 was part, when disposing of two proceedings. The first was an appeal from the orders made by Heerey J (the appeal was QG 141 of 1996). The second was an application for leave to appeal from the orders made by Kiefel J on 2 September 1996 (the application for leave to appeal was QG 160 of 1996). We treat the present application by Mr Theo to set aside Order No 5 as being made in Proceedings QG 160 of 1996. Mr Theo brings the first application in the present proceedings under the "slip rule", Federal Court Rules ("FCR"), O 35, r 7(2). The Full Court gave as its reason for making Order No 5 that it was unnecessary to deal with Mr Theo's application for leave to appeal from Kiefel J (designated as QG 160 of 1996), because the Court in any event had allowed an appeal from the judgment of Heerey J and set aside the orders made by his Honour. Mr Theo says that the Court made Order No 5 because of an accidental slip or omission, namely, a failure to appreciate that allowing the appeal from Heerey J did not obviate the need to address certain aspects of Kiefel J's costs orders. Mr Theo contends that Order No 5 should be set aside, his application for leave to appeal should be granted, the appeal should be allowed and the costs orders made by Kiefel J should be set aside. The parties to the first application Mr Theo named the Official Trustee as the only respondent to his original application for leave to appeal from the judgment of Kiefel J. He did not name the trustees for sale as respondents to that application, notwithstanding that Kiefel J had made a costs order in their favour on 2 September 1996, and that Mr Theo sought to set aside that order. When the present applications were called, Mr Hack announced his appearance for the Official Trustee and Mrs Mullins announced hers for the trustees for sale. She stated that the trustees for sale consented to being joined as respondents to Mr Theo's application to set aside Order No 5. She also stated that, if the Court were minded to set aside Order No 5 under FCR, O 35, r 7(2), the trustees for sale consented to being joined as parties to the application for leave to appeal from the judgment of Kiefel J and to the appeal (should leave be granted). The second application The second application is a notice of motion (designated as QG 16 of 1998) filed by Mr Theo, in which he seeks leave to file a notice of appeal from costs orders made by Cooper J as long ago as 24 August 1995. In the proceedings determined by Cooper J (designated as QB 1422 of 1990), Mr Theo and Mrs Theo (in her capacity as trustee of the S Theo Family Trust) sought orders, inter alia, setting aside notices issued by the Official Receiver under s 139ZQ of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act). Section 139ZQ allows a notice to be given by the Official Receiver to a person who has received money or property as a result of a transaction that is void against the trustee. The notice may require that person to pay an amount equal to the money or the value of the property received. Cooper J made orders setting aside the notice. He did so on the ground that the notices did not contain information relating to the value of the properties as required by s 139ZQ of the Bankruptcy Act. Cooper J, although ruling ultimately in favour of Mr and Mrs Theo, made a number of factual findings adverse to them. These included findings that Mr Theo had executed certain transfers in favour of Mrs Theo with intent to defraud creditors and that Mrs Theo was not a purchaser of the relevant properties for valuable consideration. In relation to costs, Cooper J said this: "Mr Theo has succeeded in his application to have the s 139ZQ notices set aside on the basis of the values alleged in the notices but on no other ground. The time taken on the hearing of this matter was almost entirely taken up on issues on which Mr Theo failed. Notwithstanding that the applicants were successful as to part of the application, they may nevertheless, because of their conduct of the litigation, be ordered to pay costs (Cummings v Lewis (1993) 41 FCR 559 at 603). His Honour went on to order Mr and Mrs Theo to pay 80 per cent of the Official Receiver's costs of and incidental to the application, including reserved costs. Mr Theo says that Cooper J did not intend to make the order in the terms he did, or at least made an error when formulating the orders. Mr Theo contends that he should have to pay only a percentage of the costs of the hearing, as distinct from a percentage of other costs incurred by the Official Receiver in the case. He argues that this result follows from the reasons given by Cooper J for making the costs order. The course of events The unfortunate history of this prolonged litigation was set out in our judgment of 7 November 1996 and we see no reason to repeat all the details here. However, in order to understand and address the present applications it is necessary to recount the major events, including those which occurred after the date of our judgment. We learned of some of them only in the course of oral argument. The appeal from Cooper J's judgment We have referred to the orders and findings made by Cooper J on 24 August 1995. Mr and Mrs Theo appealed to the Full Court against the costs orders made by his Honour. The appeal was heard by the Full Court (Ryan, Sackville and Kiefel JJ) on 9 November 1995. On 23 November 1995, the Full Court dismissed the appeal with costs. Mr and Mrs Theo then sought special leave to appeal from the judgment of the Full Court. On 3 December 1996, the High Court dismissed the application with costs. Heerey J's judgment In the meantime, on 1 September 1995, the Official Trustee filed an application seeking, as against Mr and Mrs Theo: · declarations that two transfers executed by Mr Theo in favour of Mrs Theo in 1984 were void as against the Official Trustee; · declarations that Mrs Theo held a one half interest in the two properties on trust for the Official Trustee; and · orders appointing statutory trustees for sale pursuant to s 38 of the Property Law Act 1974 (Qld). The application was heard by Heerey J on 1 August 1996. The Official Trustee relied on the judgment of Cooper J as creating an issue estoppel in relation to the findings of fact adverse to Mr and Mrs Theo. Accordingly, the Official Trustee adduced no evidence to support the required findings on the critical factual questions, other than the judgment of Cooper J. In an ex tempore judgment, Heerey J accepted that this course was appropriate and made the orders sought in the application. His Honour also ordered Mr and Mrs Theo to pay the Official Trustee's costs of the proceedings. The stay application On 22 August 1996 Mr and Mrs Theo filed a notice of appeal, appealing against the whole of the judgment of Heerey J. This appeal was designated QG 141 of 1996. On 28 August 1996, Mr Theo filed an application seeking a "stay of execution relevant to the Honourable Justice Heerey [sic] decision of the 1.8.96". The application bore the same file number (QB 1422 of 1990) as the proceedings determined by Heerey J. The application referred to Mr Theo as the applicant and made no reference to Mrs Theo. Mr Theo filed an affidavit in support of the stay application, expressing the belief that "we have good grounds that our appeal against [Heerey J's] findings will be successful." The stay application was heard by Kiefel J in the course of what was obviously a busy list on 2 September 1996. Mr Hack appeared for the Official Trustee. Mr Philp, one of the trustees for sale, appeared on behalf of the trustees. Mr Philp told Kiefel J that he had been served with a copy of the stay application. He made no application for the trustees for sale to be joined as parties to the proceedings, but did seek to read three affidavits dealing with the actions taken by the trustees for sale. He explained to Kiefel J that the affidavits had been prepared because the trustees apprehended that Mr Theo would make a complaint about their conduct. Her Honour observed that any such complaint was not directly relevant to Mr Theo's stay application. In the event, the affidavits were not read. Her Honour then heard submissions on the stay application. Mr Theo contended that a stay should be granted because he had applied for special leave to appeal to the High Court from the decision of the Full Court upholding Cooper J's judgment. He said that if the High Court overturned the factual findings made by Cooper J, the foundation for Heerey J's judgment would be wanting. Understandably enough, Mr Theo did not advert to the doctrine of issue estoppel and, in particular, whether the doctrine had been correctly applied by Heerey J. He also expressed concerns about the form of the orders made by Cooper J. Mr Hack conceded in argument that Kiefel J had jurisdiction to stay the orders made by Heerey J appointing the trustees and vesting the land in them upon trust for sale. He argued, however, that this was not an appropriate case for the grant of a stay because there was no substantial prospect that the appeal would succeed. Mr Hack suggested that it was unlikely that the High Court would grant special leave to appeal in the pending application by Mr and Mrs Theo. He did not address the issue estoppel point. Mr Philp stated that the trustees' position was that they were appointed by the Court and would simply carry out the orders made by the Court. They did not wish to take part in any dispute between Mr Theo and the Official Trustee. Kiefel J delivered a short judgment in which she held that the application for a stay should be dismissed. Her Honour said that Mr Theo's main point was that the orders made by Heerey J related to the entirety of the two properties. This misunderstood the nature of the orders, which preserved Mrs Theo's interest as a co-owner. Her Honour continued: "From Mr Theo's oral submissions I took it that he disputes the factual correctness of Cooper J's judgment. As I have said, however, I do not consider it to be at all likely that these findings will be interfered with. Nor does there appear to me to be reason to doubt Heerey J's application of them." Kiefel J then heard submissions on costs. Mr Philp asked for an order that Mr Theo pay the costs of the trustees for sale "if your Honour is minded to refuse the application made by Mr Theo for a stay". The following exchange then took place: "MR THEO: The appearance of the Trustees, your Honour - if it is justified or not, I will leave it up to your discretion, your Honour. HER HONOUR: Well, they were served with a copy of the application were they not? MR PHILP: Yes, your Honour, last Thursday. MR THEO: Out of courtesy. It was not addressed to them." On behalf of the Official Trustee, Mr Hack submitted that costs should follow the event. He supported Mr Philp's submission that the costs of the trustees for sale should be paid on a party and party basis. Her Honour ordered that Mr Theo should pay the costs of the Official Trustee and the trustees for sale of and incidental to the motion. Her Honour appears to have given no separate reasons for making these orders. In particular, her Honour did not give reasons for making a costs order in favour of the trustees for sale. The application for leave to appeal from the judgment of Kiefel J On 9 September 1996, Mr Theo filed a notice of appeal, purporting to appeal as of right from the whole of the judgment of Kiefel J. This appeal was designated QG 160 of 1996. The notice of appeal contained six grounds, numbered 3 to 8. The grounds included a complaint that Kiefel J had failed to disqualify herself and that she had erred in relying on the findings of Cooper J when these proceedings were the subject of an application for special leave to appeal to the High Court which had not then been determined. Ground 8 was as follows: "The Hon Justice J KIEFEL erred further in allocating costs in favour of the Trustees appointed to sell, because as she said, the Appellant had given to them a copy of his Notice of Appeal. The fact of the matter is, and Justice J KIEFEL did not consider, that such Trustees asked for such copy, which they were to get anyway from the Australian Government Solicitor's office, and for this the Appellant had simply obliged and offered them TO HAVE THE NOTICE COPIED, which they did." The notice of appeal sought an order setting aside the decision of Kiefel J made on 2 September 1996. The notice of appeal neither joined nor sought to join the trustees for sale as parties to the appeal. On 26 September 1996, the Official Trustee filed a motion seeking orders that the purported appeal be dismissed with costs. This apparently prompted Mr Theo to file, on 30 September 1996, a motion seeking leave to appeal against the orders made by Kiefel J. The notice of motion contained a handwritten annotation that "all other details [remain] the same as per original notice of appeal". Again, no orders were sought joining the trustees for sale as parties to the proceedings. The orders of 3 October 1996 On 30 September 1996, the proceedings again came before Kiefel J. Her Honour on this occasion directed that the trustees for sale appear and they did so on 3 October 1996. On that day her Honour gave a number of directions and ordered Mr Theo to pay the costs of both 30 September 1996 and 3 October 1996, with liberty to apply to have them paid out of the proceeds of sale. On 16 October 1998, Mr Theo filed a notice of motion seeking "leave to appeal against [Kiefel J's] directions" given on 3 October 1996 (QG 182 of 1996). The Full Court decision of 7 November 1996 On 7 November 1996, the appeal from the judgment of Heerey J and the application for leave to appeal from the judgment of Kiefel J came on for hearing before the Court as presently constituted. Mr Theo appeared in person. Mr Hack appeared for the Official Trustee. The trustees for sale, not being parties to either the appeal in the application for leave to appeal, did not appear. On that day we delivered a judgment in which we held that it was not open to Heerey J to rely on the doctrine of issue estoppel in order to make findings of fact adverse to Mr and Mrs Theo. We pointed out that, since the Official Trustee had been unsuccessful in the proceedings against Mr and Mrs Theo, the findings of fact made by Cooper J were not legally indispensable to the conclusions reached by his Honour. Thus the doctrine could not be invoked so as to rely on those findings in the later proceedings before Heerey J. In response to a submission by Mr Hack that the matter should be remitted for a further hearing we said this: "In these circumstances, we consider that it would not be appropriate to remit the matter for rehearing. The Official Trustee has elected to rely upon the conclusive effect of findings which it knew were contested. It has been unsuccessful in this endeavour. It should not have the opportunity yet again to proceed against Mr and Mrs Theo. Whatever the factual findings that might be made on any further hearing, the point has been reached where an end must be brought to this litigation." We expressed our conclusion as follows: "The appeal should be allowed. The declarations and orders made by the trial Judge must be set aside. The Official Trustee's application must be dismissed. The Official Trustee must pay the costs of the first appellant here and below. The application for leave to appeal from the orders of Kiefel J refusing a stay is refused on the basis that it is unnecessary in view of the other orders we have made. We reserve liberty to the trustees for sale to apply within 21 days or such further time as the Court allows." We then made the following orders: "1. The appeal be allowed. 2. The declarations and orders of the trial Judge be set aside. 3. The respondent's application be dismissed. 4. The respondent pay the costs of the first appellant before the trial Judge and on appeal. 5. The application for leave to appeal from the orders of Kiefel J refusing a stay be dismissed. 6. Liberty be reserved to the trustees for sale appointed by the orders of the trial Judge to apply to the Court within 21 days or such further time as the Court may order." Order No 6 was added at the request of Mr Hack, who asked that the trustees for sale have liberty to apply to a Judge of the Court "in the event there are issues involving them which need to be worked out". The litigation, despite our observations, has not reached an end. Following the judgment of 7 November 1996, it continued unabated. Dismissal of the application for leave from the orders of 3 October 1996 On 20 December 1996, Mr Theo appeared before Kiefel J in relation to a claim for damages brought by him against the Official Trustee, the Official Receiver and the trustees for sale. On that day, Mr Hack appeared for the Official Trustee and Official Receiver and Mrs Mullins for the trustees for sale. While the proceedings appear to have been listed to deal with Mr Theo's claim for damages, he sought to withdraw his application for leave to appeal against the orders of 3 October 1996. Kiefel J, after some discussion, dismissed the application for leave to appeal from the orders made on 3 October 1996, reserving only the question of costs as between Mr Theo and the Official Trustee. No order as to costs was made as between Mr Theo and the trustees for sale. The Full Court decision of 28 April 1997 Not to be daunted, Mr Theo filed a further motion seeking leave to appeal from the orders made by Kiefel J on 20 December 1996. This application apparently retained the number QG 182 of 1996 given to Mr Theo's motion for leave to appeal against the directions made on 3 October 1996. By a separate motion (No 216 of 1996) Mr Theo moved the Court "for clarification orders in regard to the Full Court of the Federal Court of Australia order of the 7.11.96 and, in particular, paragraph 5 of the relevant orders...". The two motions were heard on 28 April 1997 by a Full Court comprising Burchett, Drummond and Mansfield JJ. In a judgment delivered on that day, their Honours held that the orders made by Kiefel J on 20 December 1996 were an exercise of the Court's appellate jurisdiction and there was no right of appeal to a Full Court from those orders. Accordingly, the motion for leave to appeal in respect of the orders made on 20 December 1996 had to be dismissed as incompetent. In any event, there was nothing to suggest that the discretion exercised by Kiefel J had miscarried. The Court said that the second motion amounted to a claim by Mr Theo that the Full Court had made a mistake in the judgment given on 7 November 1996. However, there was no jurisdiction for one Full Court to hear an appeal from an earlier Full Court. That was a matter for the High Court, should it grant special leave to appeal. The Full Court nonetheless made these additional observations: "The orders of the Full Court have been duly entered. Of course, it retains certain limited powers of correction of errors under the slip rule. But there is no reason to think that anything of that nature occurred in the present case. A grant of leave to appeal against what was simply an exercise of discretion by a judge at first instance in relation to a costs order would be a comparatively rare event. Kiefel J was certainly aware on 2 September 1996 that it was possible the appeal might succeed; she nevertheless thought that in the circumstances, the application for a stay having been brought on a misconceived basis, Mr Theo should be ordered to pay the costs of it. In such a case, the success of the appeal does not lead to the conclusion that there should be leave to bring yet another appeal against her Honour's exercise of discretion. Mr Theo's ultimate escape, by virtue of the Official Trustee's mistakes, from the consequences of the findings of fraud made against him by Cooper J does not in this case entitle him to be permitted to go back for his hat. It should not be overlooked that the Full Court, in refusing the Official trustee a remittal of the principal proceeding for rehearing, expressly exercised a discretion on the basis that 'the point has been reached where an end must be brought to this litigation'. That statement in the Court's reasons was followed, almost immediately, by its refusal of leave to Mr Theo. Although the Court commented that its orders made the allowance of a stay 'unnecessary', there is no reason to think it had changed its mind about the need for finality, and no reason to think it saw anything to question in Kiefel J's exercise of her discretion. Nor was there any convincing ground to see it as unjust that Mr Theo, who had in two substantial proceedings profited by legal errors on the part of the Official Trustee, should himself be held to a costs order made in an application which he had based inappropriately upon a proposition not sustainable in law." Mr Theo's special leave application to the High Court In the meantime, Mr Theo had sought special leave to appeal to the High Court from Order No 5, made by us on 7 November 1996. That application was heard by the High Court (Gaudron, McHugh and Kirby JJ) on 5 December 1997. In the course of the hearing, Gaudron J expressed the view that the statement made by us in the judgment of 7 November 1996, that it was unnecessary to consider the special leave application, appeared to have been wrong. The transcript of the argument shows that Mr Hack, who appeared for the Official Trustee, conceded that an error had been made, and that McHugh and Kirby JJ seemed to accept that the concession had been correctly made. It is somewhat curious that, although Mr Theo made a brief and incomplete reference to the motions heard by the Full Court on 28 April 1997, the judgment given by that Full Court appears not to have been drawn to the attention of the High Court. In the result, the High Court ordered that the application for special leave be stood over "to enable Mr Theo to make written application to the Registrar of the Federal Court to have the matters relisted before the Full Court...attaching a transcript of today's proceedings and serving notice of that application on the trustees for sale together with notice that Mr Theo will be applying to have them joined as parties in the proceedings in the Full Court should they be listed. We would reserve to both parties, in that event, leave to apply to this Court on seven days' notice." Mr Hack stated to the High Court that, if the matter were returned to the Full Court, the Official Trustee would not argue that any application by Mr Theo did not come within the slip rule. He also indicated that no action would be taken by the Official Trustee to enforce the costs order pending this Court's consideration of the matter. The High Court reserved the costs of the application for special leave to appeal. On 7 December 1997, Mr Theo requested that his application for leave to appeal from Order No 5 be relisted before the same Full Court as had determined the appeal from Heerey J. It was this request that led the Court to be reconvened. The Official Trustee's offer On 28 January 1998 the Official Trustee wrote an open letter to Mr Theo, in the following terms: "I refer to earlier dealings in relation to your application to have the Full Court of the Federal Court re-consider the Orders made by it on 7 November 1996 and in particular your complaint that the Full Court ought to have set aside the Order made by Kiefel J on 2 September 1996 whereby you were ordered to pay my client's costs of, and incidental to, the motion seeking a stay. 2. My client is concerned that the costs involved in having the matter reconsidered by the Full Court are likely to be far in excess of the amount of the costs encompassed by the Order. My client wishes to avoid the incurring of unnecessary costs, not only legal costs but also the costs incurred in having the Full Court re-convened. 3. Accordingly, my client, the Official Trustee, has instructed me to advise you that he will undertake not to enforce the Order for costs made in his favour by Kiefel J on 2 September 1996 and not to seek to recover the amount of those costs. To that end I suggest that a Consent Order be filed varying the Order made on 2 September 1996 by deleting the obligation to pay the Official Trustee's costs of and incidental to the motion. 4. Consistent with this approach, my client would propose that the application for special leave to appeal be dismissed by consent with no order as to costs. 5. I should stress:- (a) that this proposal does not affect the Order for costs made against you on 2 September 1996 in favour of the trustees for sale, Mr Bennett and Mr Philip [sic]; (b) that this proposal does not affect any other costs Order made in favour of my client. Please let me have your response in writing." Mr Theo responded on 13 February 1998, declining the offer. Mr Theo included among his reasons for declining the offer that he wished to amend the order made by Cooper J on 24 August 1995 that Mr and Mrs Theo pay 80 per cent of the Official Trustee's costs of those proceedings. Mr Theo took this position notwithstanding that a Full Court had dismissed an appeal from Cooper J's orders and that the High Court had refused Mr and Mrs Theo's application for special leave to appeal from the judgment of the Full Court. The application under the slip rule The first question is whether we should accede to Mr Theo's application to set aside Order No 5, in order to correct a mistake in the judgment or order arising from an accidental slip or omission: FCR, O 35, r 7(2). The authorities make it clear that the jurisdiction is to be exercised with great caution. Generally speaking, the power is not to be exercised unless the applicant can show that by accident and without fault on his or her part the order was made without the applicant being heard: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300, at 302, per Mason CJ. His Honour, however, made these further observations (at 303): "[I]t must be emphasised that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to reargue their cases." We think it fair to say we proceeded on 7 November 1996 under a misapprehension, namely, that the costs orders made by Kiefel J on 2 September 1996 had been made in favour of parties to the proceedings. It was not pointed out to us, and we did not appreciate, that the trustees for sale had not been joined as parties. Nor did we appreciate that the trustees for sale had provided no evidence adduced on the stay application. Accordingly, we overlooked that Kiefel J's order that Mr Theo pay their costs was an exercise of power in favour of non-parties, who had not provided material assistance on the application before the Court. Thus we did not consider whether the costs order made in favour of the trustees for sale was an appropriate exercise of the Court's power under s 43 of the Federal Court of Australia Act 1976 (Cth) "to award costs in all proceedings before the Court". We should add that our misapprehension was not a matter of which the Full Court considering the application for leave to appeal from Kiefel J's orders of 20 December 1996 was or could have been aware. Had Mr Theo been represented at the hearing of the appeal before us, it would have been hard to deny that the failure to bring the fact of a non-party order to our attention was his own fault. However, he is and has been unrepresented. While Mr Theo has received his share of procedural indulgences in this litigation, we think that it would be too harsh to attribute our misapprehension solely to his neglect or default. It is regrettable that these prolonged and confused proceedings should require yet another chapter to be added to them. Especially is this so when the issue is merely one of a costs order made in the course of one of many interlocutory applications. Nonetheless, it is clear enough that we proceeded under a misapprehension when making Order No 5 and that the High Court has taken the view that Mr Theo should have the opportunity to apply to this Court under the slip rule. In these circumstances, we think that the appropriate course is to re-open Mr Theo's application for leave to appeal to the extent that it relates to the costs orders made by Kiefel J on 2 September 1996. There is no occasion for us to reconsider her Honour's refusal to grant the stay, since that refusal was overtaken by subsequent events. Nonetheless, her Honour's reasons for taking that course may bear on the costs orders made by her. We therefore set aside Order No 5 and proceed to reconsider Mr Theo's application for leave to appeal insofar as it relates to the costs orders made on 2 September 1996. As we have noted, the trustees for sale consented to be joined as parties to the leave application. Accordingly, we direct that they be joined as respondents to Mr Theo's application for leave to appeal. The costs order in favour of the Official Trustee The Official Trustee was, of course, a party to the stay application determined by Kiefel J on 2 September 1996 and actively opposed that application. The costs order in favour of the Official Trustee therefore does not give rise to the same issues as the order that Mr Theo pay the costs of the trustees for sale. Furthermore, ground 8 of Mr Theo's notice of appeal (incorporated into the application for leave to appeal) specifically challenged only the order for costs in favour of the trustees for sale. We are, however, relieved from the need to consider this aspect of the costs order further by a concession made by the Official Trustee in his written submissions. As Mr Hack explained, the Official Trustee is and, since 28 January 1998, has been prepared to consent to orders varying the costs order made by Kiefel J on 2 September 1996, by deleting Mr Theo's obligation to pay the Official Trustee's costs of and incidental to the motion. In the circumstances, we propose to make orders that will bring about this result. These will include granting leave to appeal and allowing the appeal to the extent necessary to delete the costs order in favour of the Official Trustee. The Official Trustee's costs of the application for leave to appeal and the appeal Mr Hack submitted that, since Mr Theo had refused to agree to the proposal put in the open letter of 28 January 1996, Mr Theo should pay the Official Trustee's costs of and incidental to the application for leave to appeal and of the appeal (if leave were granted). He submitted that, having regard to Mr Theo's refusal, the Official Trustee should have costs on an indemnity basis after 28 January 1996. In our view, the Official Trustee's letter of 28 January 1996 offered Mr Theo all that he could reasonably have expected to achieve on his application for leave to appeal from the costs orders of Kiefel J made on 2 September 1996, insofar as those orders related to the Official Trustee. Indeed, Mr Theo made it clear in his oral submissions that, as against the Official Trustee, he sought only removal of the order that he pay the Official Trustee's costs of the stay application determined on 2 September 1996. Moreover, the reasons given by Mr Theo, in his letter of 13 February 1998, for not accepting the Official Trustee's offer were untenable. As will be seen, there was no proper basis for Mr Theo seeking to reopen the costs order made by Cooper J on 24 August 1995. Nor was there any proper basis for Mr Theo attempting to link the costs orders of 3 October 1996 to his application for leave to appeal from Kiefel J's costs orders of 2 September 1996. The Full Court, in its judgment of 28 April 1997, had refused to disturb the orders of 3 October 1996. Having regard to the Official Trustee's concession, in the ordinary course Mr Theo would have his costs as against the Official Trustee of the application for leave to appeal from the orders of Kiefel J made on 2 September 1996 (insofar as the application relates to the costs orders made on that day) up to and including 28 January 1998. But the Official Trustee would have the costs of the application for leave to appeal and of the appeal after that day (including the costs of Mr Theo's application under the slip rule). In view of the history of this matter, we do not think that, in the ordinary course, the Official Trustee would have received costs on an indemnity basis, notwithstanding the untenable reasons given by Mr Theo for rejecting the Official Trustee's open offer. In our view, however, orders in the form referred to in the previous paragraph should not be made. While the orders would not precisely cancel each other out, each side would have the benefit of costs orders. Having regard not only to the history of the litigation but the need for finality to which we referred, perhaps unduly optimistically, in our judgment of 7 November 1996, we think the appropriate course as between Mr Theo and the Official Trustee, is that there be no order for costs on the application under the slip rule, the application for leave to appeal, or the appeal. The costs order in favour of the trustees for sale There is no reason to doubt that Kiefel J had jurisdiction to award costs of the stay application in favour of the trustees for sale, notwithstanding that they were not parties to that application and did not seek to be joined: see Bent v Gough (1992) 36 FCR 204 (FC); Knight v F P Special Assets Ltd (1992) 174 CLR 178; Caboolture Park Shopping Centre Pty Ltd (in liq) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 (FC); Rice Growers Co-Operative Ltd v ABC Containerline Nv (1996) 138 ALR 480 (FCA/Tamberlin J), at 485. The trustees, quite properly, adopted a position of neutrality in relation to the stay application. There was no need for them to appear on that application, notwithstanding that they had been served with the notice of motion. They might well have chosen to submit to any order of the Court, but to have reserved their right to make an application in the proceedings for any costs incurred by them in carrying out the orders made by Heerey J on 1 August 1996. Indeed, Order No 6 made by us on 7 November 1996 was designed to protect the trustees' position, although we have been told in these proceedings that the trustees did not need to exercise the liberty reserved to them. As we have noted, her Honour did not give reasons for making the costs order in favour of the trustees for sale. But it would seem likely that her Honour made the order largely because she formed the view (receiving no assistance on the issue estoppel point from the legal representatives) that Mr Theo had little prospect of succeeding on the appeal from the judgment of Heerey J. It is true that on 2 September 1996, the trustees for sale came to Court armed with affidavits, but Kiefel J rightly pointed out that the affidavits had no material bearing on the stay application. Her Honour should not be taken to have based the costs order on actions that she regarded as irrelevant to the application made by Mr Theo and with which she dealt. As subsequent events have made clear, as at 2 September 1996 Mr Theo had very good prospects of success on his appeal. Doubtless, her Honour would have reached this conclusion had she been alerted to the issue estoppel question. But because the costs order in favour of the trustees for sale was based on an erroneous view of Mr Theo's prospects on the appeal we think that her Honour's discretion miscarried. In these circumstances, we think the appropriate course is to exercise afresh the discretionary power in relation to costs. Mrs Mullins submitted that the trustees for sale should have been awarded their costs of the stay application because they endeavoured to assist the Court by filing affidavit evidence to rebut complaints they assumed Mr Theo would make. On the material before us, however, there is nothing to indicate that it was necessary or reasonable for the trustees to adopt the course they did. Kiefel J did not allow the affidavits to be read and Mrs Mullins did not suggest that they were relevant to the stay application itself. There is nothing in the evidence to suggest that any complaints made by Mr Theo required the trustees to place evidence before the Court. Whatever the position in other cases, in this instance the trustees took it on themselves to prepare material that turned out to be irrelevant. There were other means for the trustees to protect their own position and to ensure that, if the Court required information, it would be provided. (We should add that the parties seemed to have assumed that the costs order made by Kiefel J covered the costs of preparation of the three affidavits filed in Court by the trustees on 2 September 1996. It is not obvious that the orders made by Kiefel J had that effect. However, nothing turns on this question for present purposes.) For these reasons, we think that the appropriate course is to grant Mr Theo's application for leave to appeal from the costs orders made by Kiefel J in favour of the trustees, allow the appeal and delete the order for costs. We were told that Mr Theo had paid the trustees for sale the costs in accordance with Kiefel J's orders of 2 September 1996. We were not asked to make any further orders by reason of that fact. Doubtless the trustees will repay the appropriate sum. While Mr Theo has succeeded in setting aside the costs order made by Kiefel J, we think that in the present proceedings as between Mr Theo and the trustees for sale, no order for costs should be made. Mr Theo is partly responsible for the procedural difficulties that have arisen. For example, had he joined the trustees for sale on his application for leave to appeal against the orders made by Kiefel J, it is unlikely that we would have misapprehended the position on 7 November 1996. Moreover, it is difficult to see how Mr Theo could have incurred any substantial costs and, in any event, we think it is important (so far as we can) to minimise the opportunities for further disputation between the parties. The motion to set aside the costs orders made by Cooper J Mr Theo contended that the costs orders made by Cooper J did not accurately reflect his Honour's reasons, in that Mr and Mrs Theo should have been ordered only to pay 80 per cent of the costs of the hearing, rather than 80 per cent of the costs of and incidental to the application. We think that this submission misunderstands Cooper J's reasoning. His Honour clearly made the orders he intended to make; those orders flowed from his reasoning. In any event, this Court has no jurisdiction to entertain any application to modify the orders made by Cooper J. An appeal from Cooper J's judgment was dismissed by a differently constituted Full Court, while the High Court dismissed an application for special leave to appeal. The proceedings have therefore concluded. This application took up very little time. It should not be the subject of a costs order. A foreshadowed application by the trustees for sale Mrs Mullins submitted that if the trustees for sale could not claim the costs order against Mr Theo, they were entitled to an order for their costs of the stay application against the Official Trustee. She accepted that this application should have been formalised by the filing of an application for leave to file a cross appeal in Mr Theo's application for leave to appeal from the orders made by Kiefel J on 2 September 1996. We leave to one side the procedural difficulty. There is nothing to suggest that the Official Trustee was responsible for the decision of the trustees for sale to appear on 2 September 1996 and to seek to file affidavits. As we have said, on the material before us, it was neither necessary nor reasonable for the trustees for sale to adopt the course they did on 2 September 1996. There is no basis, therefore, for requiring the Official Trustee to pay their costs of the stay application. Of course, the trustees for sale may have some other avenue by which they can recover their costs, but that is not a matter we can or should consider. Mr Theo's foreshadowed "ab initio" application In oral argument, Mr Theo stated that he wished to move to amend the orders made by us on 7 November 1996 so as to set aside Heerey J's orders ab initio. Mr Theo had not filed any motion to that effect and appears to have given no prior notification of his intention to seek such an order. In answer to questions, Mr Theo said that the point of such a motion was to support his contention that the costs orders made by Kiefel J on 2 September 1996 should be set aside. Under the orders we propose to make those orders will be set aside in any event. It may be that Mr Theo had in mind seeking such an order as a means of attacking the orders made by Kiefel J on 3 October 1996. If this is what he had in mind, we do not think he should be given leave to file a motion to the effect foreshadowed by him. The orders of 3 October 1996 were the subject of an application for leave to appeal (determined by Kiefel J) and a further application for leave to appeal (determined by the Full Court). It is not appropriate to allow them to be attacked by means of a further attempt to modify the orders made by us on 7 November 1996. In any event, Mr Theo has not pointed to anything which would justify us setting aside any of the orders made on 7 November 1996, other than Order No 5. No mistake was made in relation to those orders and Mr Theo did not provide any convincing reason why they should be reopened. To the extent that Mr Theo was seeking to set aside or reopen the orders made on 7 November 1996 (other than Order No 5), we decline to take that course. We would treat him as applying for leave to file an application to set aside one or more of the orders made by us on 7 November 1996 (other than Order No 5) and we would refuse leave. No order for costs should be made in respect of this application for leave. Conclusion We propose to make the following orders: 1. DIRECT that Anthony James Bennett and Kenneth Philp be joined as respondents to the applicant's application to set aside Order No 5 made by the Full Court in Proceedings QG 141 and QG 160 of 1996 ("Order No 5") and to the applicant's motion for leave to appeal from the orders made by Kiefel J in Proceedings QB 1422 of 1990 on 2 September 1996 ("the September Orders") (the motion for leave to appeal being proceedings QG 160 of 1996). 2. ORDER that Order No 5 be set aside, but only insofar as it relates to par 2 of the September Orders ("the Costs Orders"). 3. GRANT leave in Proceedings QG 160 of 1996 to the applicant to appeal from the Costs Orders. 4. ALLOW the appeal from the Costs Orders. 5. ORDER that the September Orders be modified by deleting the Costs Orders. 6. DISMISS as incompetent the applicant's motion (QG 16 of 1998) for leave to appeal from the costs orders made by Cooper J on 24 August 1995 in Proceedings QB 1422 of 1990. 7. REFUSE leave to the applicant to file an application to set aside the orders (other than Order No 5) made by the Full Court in Proceedings QG 141 and QG 160 of 1996. 8. DIRECT that there be no order as to costs in relation to the applications dealt with by these orders (Proceedings QG 160 of 1996 and QG 16 of 1998 and the application for leave referred to in par 7). As we have noted, the High Court has made certain orders in relation to Mr Theo's application for special leave to appeal. Any further orders on that application is, of course, a matter for the High Court. I certify that this and the preceding twenty-one (21) pages are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: 23 July 1998 Counsel for the Applicant: Self represented Counsel for the First Respondent: Mr P E Hack Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second and Third Respondents: Mrs D Mullins Solicitors for the Second and Third Respondents: Bennett & Philp Date of Hearing: 13 July, 1998 Date of Judgment: 23 July, 1998