FEDERAL COURT OF AUSTRALIA Cook v Pasminco Limited [2001] FCA 1277 APPEALS – application for leave to appeal – application for an extension of time within which to file a notice of appeal – whether appeal would be futile – where issue raised on appeal is of public importance COSTS – where order made at first instance directing a solicitor to pay the other parties' costs – issue of public importance Federal Court of Australia Act 1976 (Cth) s 24(1A) Commonwealth v Construction, Forestry, Mining and Energy Union (2000) 98 FCR 31 at [18] followed Senior v Holdsworth; Ex parte Independent Television News Ltd [1976] QB 23 at 32-33 followed Eatts v Dawson (1990) 21 FCR 166 followed Deighton v Telstra Corporation Ltd (Lee, Heerey and R D Nicholson J, 17 October 1997, unreported) followed Gallo v Dawson (1990) 64 ALJR 458 at 459 followed ROSLYN GAY COOK & ORS v PASMINCO LIMITED & ORS N 132 of 2000 IN THE MATTER OF ROSLYN GAY COOK & ORS v PASMINCO LIMITED & ORS CLAS OLAF EINBERG & ORS V PASMINCO LIMITED & ORS N 211 of 2001 STONE J 7 SEPTEMBER 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 132 OF 2000 BETWEEN: ROSLYN GAY COOK FIRST APPLICANT SAMANTHA JOY COOK (by her next friend ROSLYN GAY COOK) SECOND APPLICANT VICKI LEAH BLAD THIRD APPLICANT ASHLEIGH AGARS (by his next friend VICKI LEAH BLAD) FOURTH APPLICANT AND: PASMINCO LIMITED (ACN 004 368 674) FIRST RESPONDENT PASMINCO COCKLE CREEK SMELTER PTY LIMITED (ACN 000 083 670) SECOND RESPONDENT PASMINCO PORT PIRIE SMELTER PTY LIMITED (ACN 008 046 428) THIRD RESPONDENT JUDGE: STONE J DATE OF ORDER: 7 SEPTEMBER 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. the applicants' solicitors, Coleman & Greig, have leave to file and serve within twenty-one days a notice of appeal from the judgments of his Honour Justice Lindgren delivered on 12 December 2000 and 7 February 2001; 2. the applicants' solicitors, Coleman & Greig pay the respondents' costsof and relating to the hearing on 8 June 2001. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 211 OF 2001 IN THE MATTER OF ROSLYN GAY COOK & ORS v PASMINCO LIMITED & ORS BETWEEN: CLAS OLAF EINBERG FIRST APPLICANT PAUL LUCAS SECOND APPLICANT JOHN DENNIS COWLEY THIRD APPLICANT CRAIG MANNERS COCKBURN FOURTH APPLICANT MATTHEW JOHN ROWE FIFTH APPLICANT PAUL GARY GAMBIN SIXTH APPLICANT STEPHEN JOHN BOOTH SEVENTH APPLICANT MARGARET AMANDA PARKIN EIGHTH APPLICANT AND: PASMINCO LIMITED (ACN 004 368 674) FIRST RESPONDENT PASMINCO COCKLE CREEK SMELTER PTY LIMITED (ACN 000 083 670) SECOND RESPONDENT PASMINCO PORT PIRIE SMELTER PTY LIMITED (ACN 008 046 428) THIRD RESPONDENT JUDGE: STONE J DATE OF ORDER: 7 SEPTEMBER 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. the applicants have leave to file and serve within twenty-one days a notice of appeal from the jugdments of his Honour Justice Lindgren delivered on 12 December 2000 and 7 February 2001; and 2. the applicants pay the respondents' costs of and relating to the hearing on 8 June 2001. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 132 OF 2000 BETWEEN: ROSLYN GAY COOK FIRST APPLICANT SAMANTHA JOY COOK (by her next friend ROSLYN GAY COOK) SECOND APPLICANT VICKI LEAH BLAD THIRD APPLICANT ASHLEIGH AGARS (by his next friend VICKI LEAH BLAD) FOURTH APPLICANT AND: PASMINCO LIMITED (ACN 004 368 674) FIRST RESPONDENT PASMINCO COCKLE CREEK SMELTER PTY LIMITED (ACN 000 083 670) SECOND RESPONDENT PASMINCO PORT PIRIE SMELTER PTY LIMITED (ACN 008 046 428) THIRD RESPONDENT IN THE MATTER OF ROSLYN GAY COOK & ORS v PASMINCO LIMITED & ORS N 211 OF 2001 BETWEEN: CLAS OLAF EINBERG FIRST APPLICANT PAUL LUCAS SECOND APPLICANT JOHN DENNIS COWLEY THIRD APPLICANT CRAIG MANNERS COCKBURN FOURTH APPLICANT MATTHEW JOHN ROWE FIFTH APPLICANT PAUL GARY GAMBIN SIXTH APPLICANT STEPHEN JOHN BOOTH SEVENTH APPLICANT MARGARET AMANDA PARKIN EIGHTH APPLICANT AND: PASMINCO LIMITED (ACN 004 368 674) FIRST RESPONDENT PASMINCO COCKLE CREEK SMELTER PTY LIMITED (ACN 000 083 670) SECOND RESPONDENT PASMINCO PORT PIRIE SMELTER PTY LIMITED (ACN 008 046 428) THIRD RESPONDENT JUDGE: STONE J DATE: 7 SEPTEMBER 2001 PLACE: SYDNEY REASONS FOR JUDGMENT Introduction 1 On 12 May 2000 Lindgren J ordered that the application in proceeding N 132 of 2000 be dismissed as incompetent for lack of jurisdiction in this Court. By judgment pronounced on 12 December 2000 ("First Judgment") in proceeding N 132 of 2000, his Honour ordered that the applicants' solicitors, Coleman & Greig ("Solicitors"), pay the respondents' costs of the proceeding on an indemnity basis with the exception of the respondents' costs of their motion seeking that order, which was to be paid by the Solicitors on the usual party and party basis. By judgment pronounced on 7 February 2001 ("Second Judgment"), his Honour ordered the Solicitors to pay, on the usual party and party basis, the costs of a motion brought by the applicants for an order setting aside a subpoena for production issued on the application of the respondents. 2 At the time of publishing the First Judgment, Lindgren J, in accordance with the practice of this Court in certain cases of public interest, prepared a brief summary of his reasons for judgment. As his Honour was careful to point out, the summary is necessarily incomplete and the only authoritative pronouncement of his reasons is that contained in the full reasons for judgment. However the summary conveniently identifies an important and controversial aspect of his Honour's reasons. His Honour stated: "The issue presented for decision involves a tension between two important and valued features of the legal system. First, lawyers must be at liberty, without fear of intimidation, to undertake cases that appear to have little prospect of success. Second, lawyers must not commence a proceeding irresponsibly, in particular, without any, or any proper, consideration of the question whether the proceeding has any prospect of success at all. The applicants sued Pasminco for, relevantly, injury to their health alleged to have been caused by noxious emissions from Pasminco's smelters at Cockle Creek in New South Wales and Port Pirie in South Australia. On 12 May 2000 I ordered that the application be dismissed as incompetent, because it was beyond this Court's jurisdiction. The reason was that the federal claim relied on to attract jurisdiction was 'colourable', 'not genuine' and designed to 'fabricate' jurisdiction. The federal claim on which the applicants relied was that for the purposes of Part VA of the Trade Practices Act 1974, the noxious emissions were goods manufactured by Pasminco which Pasminco was supplying in trade or commerce, to the applicants who were injured in their health because the emissions had defects." 3 His Honour concluded that the Solicitors gave no proper consideration to the question whether the federal claim had any prospects of success. In the First Judgment ([2000] FCA 1819 at [65]), his Honour said: "Unfortunately, in my opinion the conduct of the Solicitors in the present case warrants the award of an order that they pay Pasminco's costs on an indemnity basis. The reason is that on the evidence, including the lack of relevant evidence from them explaining the position, I infer that they commenced the proceeding in this Court based on the [Trade Practices Act 1974 (Cth)] claims, without any or any proper consideration of the prospects of success of those claims. If the Solicitors had believed that those claims had had some prospects of success, they could not have been criticised for having launched the proceeding in this Court in order to obtain the advantages they apparently perceived in litigating here. But they were not entitled to commence the proceeding in this Court irresponsibly, recklessly as to whether the federal claims had any prospect of success. Yet it seems to me that this is precisely what they did. If they had responsibly considered the matter, they would have appreciated that the federal claims had no prospect of success at all." relief sought 4 The Solicitors filed, on 15 February 2001, two notices of motions in proceeding N 132 of 2000 (one being an amended notice of motion, the original notice of motion having been filed on 11 January 2001) seeking leave to appeal from the First and Second Judgments. They also filed, on 7 March 2001, an application for the extension of time in which to file and serve notices of appeal in respect of the First and Second Judgments. This application was filed under a new file number, namely N 211 of 2001. 5 There is no dispute between the parties as to the issues raised by the notices of motion and the application. They are: 1. whether leave to appeal was required in respect of the First and Second Judgments; 2. if leave is not required, whether the Solicitors should be given an extension of time in which to file a notice of appeal; and 3. if leave is required, whether the Solicitors should be granted leave to appeal against the First and Second Judgments. consideration 6 Both before me at the hearing and in written submissions, both parties presented detailed arguments addressing the first question, namely whether leave to appeal is required. The respondents submitted that leave is required for two reasons: (a) the First and Second Judgments are interlocutory; and (b) the Solicitors were not party to the proceeding in which the First and Second Judgments were pronounced. 7 A party seeking to appeal from an interlocutory judgment made by a single judge of the Court requires leave; Federal Court of Australia Act 1976 (Cth) s 24(1A). If application for that leave is not made orally at the time the judgment is pronounced, it must be made within seven days "from the pronouncement of the interlocutory judgment from which leave to appeal is sought or within such further time as the Court or a Judge may allow"; Federal Court Rules O 52 r 10(2). If leave is given, the notice of appeal must be filed and served within twenty-one days after the date when leave to appeal was granted; O 52 r 15(1)(a)(ii). Where leave to appeal is not required, any notice of appeal must be filed and served within twenty-one days after the date when the judgment appealed from was pronounced; O 52 r 15(1)(a)(i). In both cases, the Court may extend the time allowed. 8 The notice of motion that was later amended (see [4] above) was filed within seven days of the First Judgment (taking into account the vacation period; see O 3 r 5 and O 2 r 2). The notice of motion seeking leave to appeal from the Second Judgment was filed within twenty-one days of that Judgment, but not within seven days. Irrespective of whether it was thought that the Second Judgment was interlocutory or final, the notice of motion was inappropriate. If the Second Judgment was interlocutory, it was filed out of time; if the Second Judgment was final, it sought the wrong relief. The notice of motion, later amended, seeking leave to appeal from the First Judgment was within time if that Judgment was interlocutory, but otherwise inappropriate. 9 For reasons that are set out below, I have decided that the Solicitors should be permitted to appeal. If leave is necessary, I would grant that leave; if an extension of time is necessary, I would grant such an extension. It is therefore unnecessary for me to form a concluded view as to whether his Honour's judgments were final or interlocutory. 10 Although the Solicitors were not party to the proceeding in which the First and Second Judgments were pronounced, they may appeal from those judgments with the leave of the Court; Commonwealth v Construction, Forestry, Mining and Energy Union (2000) 98 FCR 31 at [18]. As the First and Second Judgments imposed liability for costs directly on the Solicitors, they are clearly persons aggrieved; Senior v Holdsworth; Ex parte Independent Television News Ltd [1976] QB 23 at 32-33. The respondents have indicated that they do not oppose the Solicitors being given leave to appeal on this basis. They do, however, submit that the judgments are interlocutory and oppose leave being given on this basis. 11 An important factor in deciding whether leave to appeal or an extension of time within which to institute an appeal should be given is the likelihood of success. If the prospect of success is so low as to render an appeal obviously futile, this is a strong indication that leave or an extension of time should not be granted; Eatts v Dawson (1990) 21 FCR 166. The reasons for delay in relation to a request for an extension are also relevant considerations; Deighton v Telstra Corporation Ltd (Lee, Heerey and R D Nicholson J, 17 October 1997, unreported). 12 The principles relevant to an extension of time were stated by McHugh J in Gallo v Dawson (1990) 64 ALJR 458 at 459: "The object of the rule is to ensure that those Rules which fix times for doing acts do not become the instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the Court or Justice to do justice between the parties. This means the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has "a vested right to retain the judgment" unless the application is granted. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice." [citations omitted] 13 In this case the delay was explained as resulting from the error and confusion of the Solicitors and their advisers as to the appropriate course. I do not think that the period of delay is such as to prejudice the respondents. 14 The draft notice of appeal setting out the ground of appeal on which the Solicitors propose to rely should they succeed here shows that there are serious issues to be addressed. As Lindgren J pointed out, the respondents relied on four grounds to support their motion that costs be awarded against the Solicitors and succeeded on only one of those grounds. His Honour also commented at [2000] FCA 1819 at [68], that: "In all the other cases concerning orders for costs against non-parties of which I am aware, what has been in issue is 'litigating at all', whereas the present case is a 'wrong court case'. 15 I am therefore not satisfied that an appeal would be futile although beyond that threshold assessment I am not required to express and I am not expressing any opinion as to the likely outcome of an appeal. It was submitted for the respondents that the grounds in the draft notice of appeal relate substantially to arguments not advanced before Lindgren J. It is a question for an appeal court whether such arguments should be permitted on appeal. It is not a reason for denying leave to appeal. 16 Finally, and most importantly, the seriousness of the issues at stake here is relevant. The award of costs against the legal representatives of a party to litigation is a serious matter, not only for those legal representatives and for all members of the profession, but also for litigants generally. This was recognised by Lindgren J in his comments about the tension between the two "important and valued features of the legal system" to which his Honour referred (see [2] above). Consideration of this is a proper subject for consideration by a Full Court and an appropriate basis for the exercise of my discretion to grant the relief sought. 17 Finally, I should briefly note that, after the hearing, counsel for the Solicitors drew my attention to the case of Harley v McDonald [2001] 2 WLR 1749. Counsel for the respondents objected to the case being raised at that late stage and provided written submissions. In the event, I did not find it necessary to rely on or refer to that case. 18 For the above reasons, I propose to order that the Solicitors have leave to file and serve a notice of appeal within twenty-one days. However, given the fact that the notices of motion and application for an extension of time were necessitated by the Solicitors' confusion and error, I would order the Solicitors to pay respondents' costs of and relating to the hearing on 8 June 2001. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. Associate: Dated: 7 September 2001 Counsel for the Applicant: Mr S D Rares SC with Ms K Rees Solicitor for the Applicant: Mallesons Stephen Jaques Counsel for the Respondent: Mr B McClintock SC with Mr D Batt Solicitor for the Respondent: Allens Arthur Robinson Date of Hearing: 8 June 2001 Date of Judgment: 7 September 2001