WENTWORTH v WENTWORTH SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY and CLARKE JJA, GROVE AJA 24 November 1995, 21 February 1996 [1996] NSWCA 553 Appeals (by leave) from two interlocutory decisions Appeals (by leave) from two interlocutory decisions of Young J - in first matter, Young J held on two grounds that one party should not execute on certificates of taxation pending set-off by opposing party pursuant to costs orders where taxation not complete - held: first ground sound (court's general discretionary power to require set-off in such circumstances) - second ground (that parties had agreed to set-off) not supported by the evidence - notwithstanding error as to second ground, court regards first ground as sufficiently strong as at time of decision as to justify decision in any event - appeal dismissed - in second matter, Young J had dismissed motions, without decision on merits - the basis being that appellant had asserted bias - held, proper course was either to disqualify himself from dealing with matters, or to decide them on merits - orders set aside. ORDERS 1. In appeal against orders of 12 December 1994: (a) appeal dismissed; (b) no order as to costs. 2. In appeal against orders of 6 March 1995: (a) appeal upheld; (b) orders set aside; (c) no order as to costs of appeal Priestley and Clarke JJA, Grove AJA. Ms K Wentworth (the plaintiff) began proceedings under the Family Provision Act in 1989. Her brother, Mr P Wentworth, was a defendant (the defendant). In the long course of those proceedings there were many interlocutory applications, hearings, applications for leave to appeal and appeals. In many of these costs orders were made, some in favour of the plaintiff, some the defendant. The two present appeals (for which the court gave leave) are against orders made by Young J in applications which arose from disputes between the parties concerning the implementation of the costs orders. The first appeal is against orders made on 12 December 1994, the second against orders made on 6 March 1995. By December 1994, the amount of costs payable under some orders had been agreed, under some had been taxed, and as to others, steps to their finalisation were not so advanced. Some payments had been made. In respect of two orders, certificates of taxation had issued, one on 25 July 1994, the other on 16 August 1994. The plaintiff had directed writs to levy on the defendant's property to the Sheriff pursuant to which on 22 September 1994 he began the process of execution and seized some of the defendant's goods. The defendant obtained an interlocutory stay of the executions. After hearing the parties Young J on 19 December 1994 made orders that the Sheriff suspend execution and refrain from taking any further steps in the process of execution and return the seized property to the defendant. 2 UNREPORTED JUDGMENTS Young J came to the conclusion that he should make the foregoing orders on two bases. The first was the defendant was entitled to an order under the court's inherent power, on the basis of fairness, that there should be set off of the various orders for costs one way or the other in the overall proceedings and that to implement this there should be no execution on any costs order until the ascertainment of the amounts payable under all costs orders was complete, and a final balance struck. He thought this all the more appropriate in the present case, where, in his view, the evidence showed that the plaintiff was "in such financial straits as it may be difficult to balance out the orders after all the taxations are completed if she is permitted to execute on orders in her favour in the meantime". He added, that if through the fault of one party some taxations were needlessly prolonged then it might be that the other party could apply to the court for leave to issue execution on orders in that party's favour. The second basis was that in Young J's view there had been an agreement between the parties containing an implied term that there would be set off of one set of costs against the other when all taxations were completed. This basis depended on Young J's view of a conversation between the plaintiff and a solicitor for the defendant. The differing accounts of the plaintiff and the defendant's solicitor of this conversation are fully set out in Young J's reasons of 12 December 1994. We do not think that either the plaintiff's account or the version of the defendant's solicitor, which Young J preferred, provides a sufficient basis for the implication which Young J drew. However, so far as the first basis of his orders is concerned, we are in agreement with Young J's approach. The court's general control of its own processes must permit it both to prevent possible unfairness in the working out of payment of costs orders and in doing so balance as well as it can the possibilities in a case such as the present: see, in addition to the authorities mentioned by Young J, the decision and discussion of this subject by Bowen CJ in Eq in Ryan v South Sydney Junior Rugby League Club Ltd (1975) 2 NSWLR 660. We also agree with Young J's comment that in a case such as the present, where there are numerous costs orders made at quite long intervals of time from one another, that if a stay is granted such as Young J in effect imposed, then application for variation of the stay may be made if one party is in a position to contend that the other is deliberately prolonging the finalisation of costs assessment procedures in order to postpone unreasonably the day when the eventual balance will be struck. Further, we would observe that in cases such as the present when a court is deciding whether or not to stay enforcement of some duly quantified costs orders pending final quantification of others, matters to be considered in exercise of the discretion must include: the connection between the matters in which the orders for costs have been made; the degree of diligence shown by the person seeking the stay in bringing to finalisation the quantification of the costs to which that person is entitled; and the possibilities, should a stay be refused, of recovery by the person who has paid, of the eventual balance in that person's favour, if the balance falls that way. We thus reach the position that in regard to the orders under appeal, one basis upon which the trial judge decided to make them was sound, the other, in our opinion, was not. URJ WENTWORTH v WENTWORTH (Priestley and Clarke JJA, Grove AJA) 3 Taking into account what was the position in regard to the various costs orders at the time Young J made his orders in December 1994, we do not think we should interfere with the orders that he made. At the same time, we also make it clear that as those orders were interlocutory, it is open to the plaintiff to seek to have them varied or discharged if she can show a proper evidentiary basis for doing so. If the plaintiff should bring any such application then one result of our reasons in the present appeal will be that it will not be open to the defendant to base any opposition to the plaintiffs application upon Young J's earlier finding that an agreement between the parties contained an implication that the plaintiff would not seek satisfaction of costs orders in her favour until the entire process of assessment of all the costs orders was complete. As already stated, we are of the view there was no sufficient material before Young J to support that implication. In our opinion the result of the present appeal should be that the orders made by Young J should remain undisturbed. Relevantly to the costs of the appeal, the plaintiff has failed on the issues of the court's discretion to stay and has succeeded on that of the implied term. Had she not succeeded on the latter issue, it is likely as a practical matter that in any further first instance proceedings concerning enforceability of costs orders, she would have been met by Young J's finding of the existence of the implied term, the first instance judge would be reluctant to look behind Young J's decision, and although not bound to do so would be inclined to act on the basis of what Young J had said. Thus although we think the appeal should be dismissed, the plaintiff has obtained some possible practical benefit from it. In the circumstances we think an appropriate way of dealing with the first instance costs is to leave Young J's order undisturbed. We will deal with the costs of the appeal at the same time as we deal with the costs of the other appeal now to be mentioned. Young J, by his orders of 6 March 1995 against which the second appeal is brought, dismissed with costs two notices of motion by the plaintiff, which sought in various ways, to reach the result that the plaintiff should be able to obtain execution of the certificates of taxation further process on which had been stayed on 12 December 1994. The hearing of the two notices of motion began in an ordinary way. Counsel for the defendant raised three preliminary objections and the plaintiff began to present evidence in her case by way of the reading of an affidavit she had filed. The motions then took a less usual turn. Objection was taken to some of the evidence being read. Young J ruled on the objection adversely to the plaintiff. The plaintiff then asked Young J to disqualify himself from further hearing the proceedings, on the ground of bias. In dealing with this submission Young J said that Wentworth v Rogers (No 9) (1987) 8 NSWLR 388, at 395, "indicates that when one gets a situation where the applicant is accusing the Court of bias, that that is good reason for the Court not to continue further with a review, but leave the party complaining to her right of appeal." A little later he said that the plaintiff by what she said to the court immediately after the ruling had been given on the objection to evidence showed that she could not accept that any ruling made against her could be made other than as a result of bias. He added that it was clear the plaintiff would not accept anything he said. He concluded: "The case, accordingly, failed because of that attitude and the plaintiff should pay the defendant's costs of the motions." 4 UNREPORTED JUDGMENTS In his reasons Young J made it clear that he was treating the plaintiff's motions as in substance a request to him to review his orders of 12 December 1994, those orders having subsequently been formally passed and entered. He also made it relatively clear that for various reasons associated with the nature of such an application in the circumstances that were before him, had he dealt with the application to review on its merits he would have been likely to dismiss it. However, he made it equally clear that the orders he made were not made on the merits (or lack of them as he saw it) of the review application. He said he was highlighting the problems that he saw in the plaintiff's way had the matter proceeded but was not determining any of the points relevant to those problems. The basis on which he dismissed the notices of motion was that contained in the passages quoted above. We are of the view that the basis upon which the judge dismissed the plaintiffs applications was inappropriate. What happened in Wentworth v Rogers (No 9), upon which Young J relied for the procedure he adopted, was different from what he actually did in the present case. In Wentworth v Rogers (No 9) the plaintiff was seeking, on a number of grounds, to have the Court of Appeal set aside an order earlier made by it, and passed and entered. The Court divided the grounds into five categories (at 395). One category included allegations of bias and prejudgment on the part of the Court. A little earlier in its reasons the Court had decided that it had jurisdiction to set aside an order duly passed and entered, but that it was a jurisdiction to be exercised with extreme care. The court considered the five categories of criticism by reference to this view of the relevant jurisdiction and concluded (at 397): "that her claim for the Court to set aside its order dismissing her appeal from Young J is not one which the Court would, in any circumstances, exercise its discretion to entertain." As to the category of criticism involving bias and prejudgment, the Court said that if the plaintiff alleged bias her proper remedy was to seek relief by appeal upon that ground (at 395). However the Court did not then dismiss the application on that basis. It considered the merits of the other matters raised by the plaintiff and found that there was nothing in them to warrant the Court in entertaining the application to set aside its earlier order. In other words, the Court heard the application to its conclusion and dismissed it on its merits. By continuing with the hearing of the application after the complaint of bias the Court was refusing to disqualify itself and finally dealing with the substance of the motion. If the High Court were to think that there had been bias or the appearance of bias in the Court's dealing with the original order or the subsequent application to set aside the original order, then that would furnish a good ground of appeal. If the High Court did not take such a view and if no appeal were successful on any of the other grounds of criticism, then the Court's original order would stand, and the Court's order dismissing the motion to set aside the original order would also stand as an order on the merits of that application to set aside. The difference in the procedure followed by Young J in the present case is that he decided nothing concerning the points raised by the plaintiffs two notices of motion; what he did in substance was to disqualify himself from the hearing of those two notices of motion. URJ WENTWORTH v WENTWORTH (Priestley and Clarke JJA, Grove AJA) 5 We think that the appropriate course would have been either, following what this Court did in Wentworth v Rogers (No 9), not to disqualify himself and to decide the notices of motion on their merits, or, to disqualify himself and leave the notices of motion to be dealt with by another judge. Young J noted in the course of his reasons that a review of the kind which he took the proceedings before him in substance to be would ordinarily take place before the judge who heard the original proceedings. That may be so but it cannot be the case that the judge who heard the original proceedings is the only judge with jurisdiction to hear such a review. If there is a power to review it must be a power of the court not an individual judge. In connection with this same point, it was argued before us that the Court should dismiss the appeal from Young J's orders, because had he treated the applications on their merits they would inevitably have been dismissed. This submission depended in large part upon the assumption that what the applications were seeking was a review of the kind described by Young J. For the plaintiff on the other hand it was argued that the first of the two of her notices of motion, although it certainly spoke largely in terms of seeking a review, also raised the simpler issue of whether leave should now be granted for the enforcement of the certificates of taxation she had obtained. As the orders of 12 December 1994 were interlocutory then clearly there would be jurisdiction in the Court to entertain an application based on material available since 12 December 1994, not to set aside the earlier orders on the ground that they were wrong, but to vary them in light of all the circumstances at the date of the later application. That an application of this kind was on foot before Young J as well as the application to review seems to this Court to be distinctly arguable. The Court is not in a position to say that such an application would have been so hopeless as to warrant our deciding the matter, which was never completed in an evidentiary sense, before Young J. The Court is of opinion that Young J's orders of 6 March 1995 should be set aside. This leaves the position as being that the plaintiffs two notices of motion are still on foot and remain to be decided in the Equity Division. This Court is not in a position to say anything as to their merits and does not do so. If the hearing of the proceedings is conducted on the basis that the plaintiff is doing nothing more than seeking to set aside the orders of 12 December 1995 on the basis that they were wrong when made, then her case will have much of the difficulty indicated by Young J to which we have already briefly referred. If she seeks to conduct the case on the footing that she is asking for a variation or a setting aside of the earlier orders on the basis of all the facts as they stand at the time the case is heard, then no doubt a preliminary question will arise whether the notice of motion of 11 January 1995 is drawn broadly enough to permit that to be done. If the Court then is of the view that it is not, a further question will probably arise whether the plaintiff should be allowed to amend it, and if so, on what terms, to make clear what is the basis upon she wishes to proceed. What would happen to that application would be a matter for the judge. Finally, if the plaintiff eventually proceeded on the footing that she was seeking variation or discharge on the basis of all the matters as they stood at the time of the further hearing, then it would be a matter for the Court on all the material available to it to decide what order should be made. Other matters may arise which we have not mentioned. 6 UNREPORTED JUDGMENTS Whatever results from the foregoing possibilities, the notices of motion will have been decided on their merits. In the circumstances we are of the view that the order for costs of the hearing before Young J of the two motions the subject of the second appeal should be left to the discretion of the judge who next hears them. As to the costs of the second appeal, we have come to the view that they should be considered along with those of the first appeal. They were argued on the same day. There was a good deal of common material. In light of the fate of the two appeals we think the most practical orders to make as to costs is that there should be no order for costs in either appeal. 1. In appeal against orders of 12 December 1994: (a) appeal dismissed; (b) no order as to costs. 2. In appeal against orders of 6 March 1995: (a) appeal upheld; (b) orders set aside; (c) no order as to costs of appeal Counsel for the Appellant: In person Solicitors for the Appellant: Russo and Partners Counsel for the Respondent: GC Lindsay SC, MK Meek Solicitors for the Respondent: Dunhill Madden Butler