UNIVERSAL TAPE WHOLESALERS PTY LTD v AMP FIRE AND GENERAL INSURANCE CO LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SAMUELS, MEAGHER and HANDLEY JJA 8 March 1991, 8 March 1991 [1991] NSWCA 271 APPEAL — COMPETENCY APPEAL — an appeal must challenge some order of the court in which the initial proceeding was heard rather than an element in the reasoning which produced the order — Commonwealth of Australia vy Bank of New South Wales [1950] AC 235 applied. APPEAL — competency should be challenged by motion (see Pt51 R17A) and a failure to do so may have consequences in costs. Appeal dismissed — no order for costs. Samuels JA ThiS is a somewhat curious appeal from orders made by Judge Flannery in the District Court. It is, I think, unnecessary to deal with the facts in any great detail. In short the plaintiff, the present appellant, sued on a policy of insurance claiming the value of goods which had been stolen, or at least lost, while being conveyed by truck from Sydney to Brisbane. An ordinary summons was filed and claimed $100,000 damages, and the particulars in a schedule specified the precise sum which was claimed, namely, $59,878. The action, which was commenced in May 1986, proceeded at a leisurely pace. Ultimately the plaintiff sought discovery from the defendant and, despite a number of letters, no documents were produced. However, in March 1988 the defendant had brought money into court pursuant to Pt19 of the District Court Rules as they stood at the time. It would seem that the plaintiff took no immediate, or indeed prompt, steps to accept or reject the payment, until February 1989 when a motion came into court which was filed on 20 January 1989 seeking orders that the defendant should serve a verified list of documents. This motion was returned on 17 February 1989, and this brought the opponents face to face and produced some useful step forward in the litigation. According to written submissions filed by the plaintiff before Judge Flannery an agreement was reached by which the plaintiff agreed to accept the amount paid in, leaving for debate the question of interest. Thus, Judge Lloyd-Jones, who heard the matter on 17 February, by consent granted leave to the plaintiff to file in court a notice of acceptance of the money brought in and a notice of motion seeking interest pursuant to s83A(1A) of the District Court Act. This motion and the motion for discovery came on before Judge Flannery on 3 March 1989. It is unnecessary, really, to say more than that the motion for interest failed because this was not a claim for a debt or liquidated amount. So far as the second motion was concerned, that was the motion for discovery. Judge Flannery concluded that the payment in had been made under Pt19 R2, because it was not a payment in of the whole of the sum claimed, and he was plainly of the view that it had been accepted by the notice so that, pursuant to Pt19 R5, all proceedings had been stayed. That being the case there was no point in making an order requiring a verified list of documents to be served, and he 2 UNREPORTED JUDGMENTS dismissed that motion but ordered the defendant to pay the plaintiffs costs in order to mark, I suppose, his displeasure at the dilatory way in which the defendant had received the various requests to which I have already referred. There is a controversy as to whether this was a payment in under Pt19 R1 or Pt19 R2 and, if the latter, whether the notice of acceptance was a valid acceptance of the money so as to agitate the question whether there was a stay. However, the notice of appeal seeks, first of all, to challenge Judge Flannery's decision that interest under s83A(1A) was not recoverable and, in what I must say is a slightly ambiguous fashion, seeks to raise the question of whether or not the notice of acceptance was effective. It is clear - see for example Commonwealth of Australia v Bank of New South Wales [1950] AC 235, especially at 294 - that an appeal can be brought only from some form of order. That definition of appeal, which is what it is, does not, it seems to me, raise any tensions with s128 of the District Court Act. $128(1) provides that an appeal shall lie to the Supreme Court from -"The ruling order direction or decision of the judge in point of law... in an action." The Bank of New South Wales case indicates what is meant by an appeal. In the present case when the matter came on before us Mr Finch, who really has said everything that could be said in support of a difficult case - from his point of view that is - indicated that what he really wanted to challenge was the assumption made by Judge Flannery that the consequence of the notice of acceptance was to stay the proceedings. But, of course, that assumption, if I may continue to call it that, was an essential part of the reasoning which led his Honour to dismiss the motion for discovery. Thus, the only order which can be challenged, since I interpolate that the other grounds of appeal concerning interest are not pressed, was the order disposing of the motion for discovery. Hence the only viable appeal must challenge that order. However, that order was not one in an action but was one in a proceeding ancillary to an action, and thus falls conclusively within the prohibition affirmed by this court in Clutha Development Pty Ltd v Barry (1989) 18 NSWLR p 86. That being the case the appeal is incompetent and we have no option but to dismiss it. The remaining question is one of costs. Ordinarily the proper procedure would be for a respondent faced with a notice of appeal which is incompetent or which seeks relief which the court has not power to afford, is to take out process to strike out the notice of appeal on that ground. That was not done here. Although, of course, the appellant ought to have known that the appeal was incompetent, the procedure to which I have referred necessarily assumes that some appellants will be unaware of the straitened nature of their rights, and it is for the respondent to draw to their attention, by approaching the court, the error into which they have fallen. Because that was not done here the cost of printing the appeal books was incurred, and it may be other costs as well, although, of course, if a motion to strike out the appeal had been filed, contested and determined the respondent would have taken and the appellant would have incurred the costs of that proceeding. The notice of appeal is not crystal clear, it seems to me, but it says enough, joined with the respondent's presumed knowledge of the litigation to which it was party, to indicate that the relief which it sought was beyond the power of the court to grant. WRUVERSAL TAPE WHOLESALERS PTY LTD v AMP FIRE AND GENERAL INSURANCB CO LTD (Handley JA) It was a case, therefore, in my opinion, in which the respondent should have moved to strike out the appeal. Accordingly, I think that it would be unfair to require the appellant to pay the respondent's costs of the appeal. I would, therefore, propose that the appeal should be dismissed with no order for costs. Meagher JA I entirely agree that the appeal must be dismissed. However, for mypart, I am afraid I would dismiss the appeal with costs. If the competence of the appeal had been challenged on the motion clearly the respondent would have been entitled to its costs. The fact that the competence was challenged at the appeal does not seem to me to make very much difference as the bulk of the costs had been incurred. Handley JA I agree with the orders proposed by Samuels JA. As a result of the failure by the respondent to this appeal to apply promptly to have the appeal dismissed as incompetent a period of approximately twenty-one months has elapsed since the decision of Judge Flannery during which this appeal has been pending and, as a result of today's decision, the matter which is in dispute between the parties is no closer to resolution than it was twenty-one months ago. Had the matter been promptly brought to a head by an application to strike out the appeal not only would the costs of preparing the appeal book been saved and perhaps other costs as well, but this long period of delay would also have been avoided. It seems to me in these circumstances appropriate for this court to make no order as to the costs of the present proceedings. I therefore agree with the orders proposed by Samuels JA. Samuels JA: The orders of the court, therefore, are - the appeal is dismissed, no order for costs. Counsel for the Appellant: SG FINCH Counsel for the Respondent: RW SETON Solicitors for the Appellant: GELLS Solicitors for the Respondent: LEIGH VIRTUE and COLLINS