GRAHAM V ALUMA-LITE PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MASON P, PRIESTLEY and COLE JJA 21 March 1997, 25 March 1997 [1997] NSWCA 129 Application that Court of Appeal reconsider costs order made at time of delivery of judgment — no sufficient reason shown — application refused. Mason P I agree with Priestley JA. Priestley JA A year ago a court comprising Clarke and Cole JJA and myself gave judgment upholding an appeal by Mrs Graham against a judgment of Hulme J by which he dismissed an application to set aside a default judgment obtained against her by Aluma-Lite Products Pty Ltd. Aluma-Lite was ordered to pay Mrs Graham's costs of the appeal. Last month a notice of motion was filed by Aluma-Lite asking the court to change the order for costs. In support of the application a mass of evidence was put before the court. In what follows I will try to restrict myself to stating the main facts. The proceedings in which Mrs Graham succeeded in the appeal had been brought against her by Aluma-Lite seeking possession of the dwelling in which she lived, of which she was the mortgagor and Aluma-Lite the mortgagee. Aluma-Lite obtained default judgment. An application to set aside the default judgment came before Hulme J. He dismissed it. Mrs Graham sought to appeal against Hulme J's decision. The appeal came on for hearing on 13 November 1995. Mrs Graham had no legal representation. The position was that the appeal was not competent unless leave to appeal were granted. The proceedings were adjourned to 4 December 1995 so that Mrs Graham could argue an application for leave to appeal, and, if necessary, then argue the appeal. She was ordered to pay Aluma-Lite's costs of 13 November 1995S. On 4 December 1995 Mrs Graham appeared without representation. It appears from Aluma-Lite's written submissions of 20 March 1997 that on this occasion the court granted leave to appeal and adjourned the hearing of the appeal so that Mrs Graham might make further efforts to get pro bono assistance. The written submissions also record, perhaps confusingly, that the costs of 4 December 1995 on the summons for leave to appeal should be costs in the appeal, but that Mrs Graham should pay the costs of the day. Mrs Graham's appeal came on for hearing on 7 February 1996. Mr McQuillan of counsel appeared for her, in response to a request from the Manager of the Bar Association's Legal Assistance Scheme. He had only just been briefed and applied for an adjournment. A two day adjournment was granted. The costs of 7 February 1996 were reserved. The appeal was argued on 9 and 13 February 1996. At the conclusion of the oral argument counsel were given a limited time for the lodging of further written submissions. In the written submissions then lodged by Aluma-Lite the final sentence asked that Aluma-Lite have an opportunity to address the court on costs upon the handing down of its reasons for decision. 2 UNREPORTED JUDGMENTS A point emerged in the course of argument in the appeal which, in the court's opinion, meant that an essential step in Aluma-Lite's case against Mrs Graham was lacking, and default judgment should not have been entered. On 20 March 1996, the court published reasons for this conclusion and made orders setting aside Hulme J's decision and the default judgment against Mrs Graham. In stating its orders, the court drew attention to the position that although all that it had been asked to do was to set aside Hulme J's orders refusing to set aside the default judgment, nevertheless, because the defect in Aluma-Lite's case was a fatal one it appeared that there would be no answer to a request that judgment be entered for Mrs Graham in those proceedings. The court also said that since there had been no request for such an order to be made it would not make that order without giving the parties an opportunity to be heard upon it, and reserved liberty to apply for the making of such an order. The court's orders also included an order that Aluma-Lite pay Mrs Graham's costs of the appeal. My understanding of the rules and practice is that the effect of this order was to confirm any earlier orders as to costs made in the proceedings (Pt52A r48) and make any costs which had been reserved earlier in the proceedings Mrs Graham's costs in the appeal (Pt52 r11 and note 52.11.6, p 3125, in Ritchies Supreme Court Procedure New South Wales). When judgment was delivered, the court was not reminded of Aluma Lite's request to be heard on the matter of costs. Had a request then be made for an opportunity to argue that matter, or if such a request had been made within a reasonable time after the delivery of judgment, it would have been proper for the court to have entertained submissions from the parties. So far as the court was concerned, however, nothing further happened until 31 July 1996, when Clarke JA, pursuant to the liberty that had been reserved, gave leave to Aluma-Lite to file a notice of motion. It seems that a form of the proposed notice of motion was before him. It sought orders including but going beyond the order in respect of which the liberty had been reserved. The further orders sought were, in summary, that the costs order made by the court be varied so that Mrs Graham should pay Aluma-Lite's costs in respect of certain matters and that the costs to which Mrs Graham would remain entitled should not include counsel's fees because his work had been undertaken pro bono. Had the leave granted by Clarke JA been promptly acted on, it seems probable that the court would still have entertained the costs arguments which Aluma-Lite wished the court to consider. However, no notice of motion pursuant to the leave granted was filed for another seven months, and a number of relevant events occurred in the meantime. On 22 July 1996 Mrs Graham had set on foot the procedures for assessment of her costs. Mr GG Buckworth was the Cost Assessor. It appears he began the assessment process early in August 1996. On 14 August 1996 Aluma-Lite's solicitor wrote to him enclosing the form of notice of motion which Clarke JA had given leave to file and submitted that Mrs Graham was not in a position to have her bill of costs assessed at that stage. Mr Buckworth indicated that he proposed to proceed with the assessment. Aluma-Lite's solicitor also enclosed a Schedule stating objections to each item of Mrs Graham's bill of costs as excessive. He also made it clear that one issue concerning Aluma-Lite, was whether Mrs Graham could recover under her costs order Mr McQuillan's proper fees and charges. Aluma-Lite's position was that since counsel had appeared pro bono he had no entitlement to fees either from Mrs Graham or Aluma-Lite URJ GRAHAM V ALUMA-LITE PTY LTD (Priestley JA) 3 Aluma-Lite's solicitor continued to write to the Assessor maintaining his position. Mr Buckworth made it plain that he thought the submission that he should not proceed was irrelevant to his task as assessor and that he was going ahead. Aluma-Lite's solicitor still did not file the notice of motion which he had obtained leave to do in July. Evidence filed by Aluma-Lite in the present application showed that its solicitor had been unwilling to incur further legal costs and had been making every reasonable effort to try and reach agreement with Mrs Graham on an overall disposition of the case. He was of the view, and he may very well have been right, that Aluma-Lite could readily take the step, the lack of which had led to its previous judgment being set aside, and then in further proceedings obtain judgment for possession. This view was founded on the basis that his client was the mortgagee of Mrs Graham's dwelling, and she was the mortgagor in default, and once the appropriate procedures had been complied with, there could be no defence to his client's claim for possession. Although there is much to be said for the solicitor's approach in trying to reach a conclusion in regard to the dwelling by negotiation and without further litigation, the approach had defects if his attempts did not succeed. In regard to his client's wish to alter the effect of this court's costs order, time was passing, no practical step was being taken to get the matter before the court and the costs assessor was proceeding with his task, leading to the incurring of further costs. A further flaw, not presently relevant, was that time was lost by not commencing further proceedings for possession, once the failure which had brought the first set undone was cured. On 29 October 1996 the assessor issued a certificate as to his determination of costs. It was $27,322. In arriving at this figure the assessor had reduced Mrs Graham's bill to some extent, apparently giving partial effect to the objections lodged by Aluma-Lite's solicitor. The Assessor's costs of the assessment were $598, which was included in the $27,322 but which was to be paid to the proper officer of the Supreme Court by Mrs Graham. The manager of the New South Wales Bar Association's Legal Assistance Scheme wrote to Aluma-Lite's solicitor by letter dated 1 November 1996 enclosing a copy of the Costs Assessor's certificate. She said the certificate was capable of being enforced as a judgment upon being filed in court and requested payment within fourteen days to avoid further enforcement costs. She asked that the payments be made separately to counsel, the Costs Assessor and the New South Wales Law Foundation Disbursement Fund. Aluma-Lite's solicitor answered by letter dated 10 December 1996. He first noted that any amount which might be owing to Mrs Graham would be more than offset by what she owed to Aluma-Lite. The letter continued: "So that this matter can be disposed of we enclose Short Minutes of Orders so that the Orders made by the Court of Appeal can be entered and that these proceedings be concluded by our client discontinuing the matter. If we do not receive a response from Mrs Graham or yourself on her betray within fourteen days, we will then seek the same Orders by a Notice of Motion and will be seeking the costs of the of the Motion against Mrs Graham." The enclosed Short Minutes of Orders were to the following effect: "By consent the Court Orders that: 1. the orders and judgment of Hulme J made 12 April 1995 in matter No CLD 11419/94 be set aside; 4 UNREPORTED JUDGMENTS 2. the default judgment in that matter entered in November 1995 be set aside and the plaintiff have leave to discontinue that matter: 3. the respondent pay the appellant's costs of the hearing before Hulme J as assessed and the appellant's costs of the appeal as assessed; 4. the respondent should have a certificate under the Suitors Fund Act in respect of the appeals." The letter and the enclosed short minutes of orders did two things. The first was to propose to Mrs Graham that the enclosed orders be made by the court on an agreed basis; what Aluma-Lite was asking for which was different from the orders stated by the court on 20 March 1996 was that instead of judgment being entered for Mrs Graham in the original proceedings against her, Aluma-Lite should have leave to discontinue those proceedings. The second thing the letter did was to say that if Mrs Graham would not agree to the proposed orders being made, then Aluma-Lite would move the court for such orders and seek the costs of the motion from Mrs Graham. In my opinion this change of position by Aluma-Lite was clear notice to Mrs Graham that Aluma-Lite was no longer seeking any variation in the effect of the costs order made by the court on 20 March 1996. On 12 December 1996 Aluma-Lite's solicitor was notified that it was proposed that judgment for the assessed amount be entered on Mrs Graham's behalf. By letter dated 17 December 1996 the manager of the New South Wales Bar Association Legal Assistance Scheme replied to Aluma-Lite's solicitor's letter of 10 December 1996 saying, inter alia: Mrs Graham would not consent to discontinuance of the proceedings until the assessed costs were paid; Mrs Graham would oppose any orders for discontinuing the action until the costs were paid; and she would seek the costs of the notice of motion foreshadowed in the letter of 10 December 1996. On 18 December 1996 a form of judgment for the amount of costs certified by the Costs Assessor was entered on Mrs Graham's behalf. It appears that Aluma-Lite's registered office is at Currumbin in Queensland. Mrs Graham instructed solicitors in Brisbane to take steps to obtain payment of the judgment amount for the assessed costs and a statutory demand for payment under the Corporations Law was served upon Aluma Lite on 8 January 1997. A winding up summons was subsequently issued and served. Aluma-Lite's present notice of motion was filed on 26 February 1997. The substance of Aluma-Lite's application to the court was that the court should now hear submissions which "if accepted, would cause the court to change the costs order announced on 20 March 1996. The principal point in favour of this application was that the court had made the costs order without hearing submissions upon it, although Aluma-Lite had notified the court that it wished to be heard on that order when the court published its reasons. In the course of submissions put in support of the application by counsel for Aluma-Lite the particular matters upon which Aluma-Lite wished to be heard were specified, in narrower terms than indicated in Aluma-Lite's notice of motion. Aluma-Lite wished to be heard on two matters, both concerning Mrs Graham's counsel's fees allowed by the Costs Assessor. The first point was a general one: Aluma-Lite wished to argue that Mrs Graham's costs could include nothing for such fees, since counsel had been acting pro bono. It was asserted that pro bono meant absolutely free of any charge. The second point it was sought to argue was that no costs order should have been made in favour of Mrs Graham in respect of URJ GRAHAM V ALUMA-LITE PTY LTD (Priestley JA) 5 certain appearances of counsel because on the occasions specified matters were argued in respect of which Mrs Graham eventually failed. I will deal with the second point first. In my opinion the court should not at this stage of proceedings entertain further argument concerning the costs of particular issues and events in the course of the appeal proceedings. As indicated earlier, the costs order made by the court has the effect that Aluma-Lite must pay all of Mrs Graham's costs of the appeal, including appearances in the course of the appeal proceedings prior to the actual argument of the appeal except where the court made on any occasion a contrary costs order in respect of some part of the proceedings. Any such orders stand; all other of Mrs Graham's costs in the course of the proceedings are included in the costs order made by the court on 20 March 1996. The reasons why I think argument should not be allowed at this stage questioning the effects of the order made on 20 March 1996 are the time that passed before the notice of motion seeking such further consideration was filed, the events that had taken place in the interim, and the doubt I have that Aluma-Lite would be likely to persuade the court in any event to make a different order. Particular features of the events that took place following the granting of leave by Clarke JA on 31 July 1996 to file the notice of motion it was then proposing to file are the incurring of expense in the course of the assessment of costs by the Costs Assessor and the notification to Mrs Graham by Aluma-Lite in December 1996 that it intended to seek from the court final orders quite different, and indeed, in all relevant respects quite contradictory to those contained in the notice of motion it proposed on 31 July 1996. In regard to the first point Aluma-Lite now wishes to raise, the same reasons as those I have given in regard to the second point are applicable. In addition, the matter raised in that point was something for the Costs Assessor to consider. It appears from the materials before us in this application that submissions were put to him on the point. Presumably, the proper way of pursuing that point would be to pursue whatever avenues of review or appeal may be available against the Costs Assessor. I would not wish to encourage Aluma-Lite to think that if such avenues are available success will lie at the end of the road. Without having heard argument on the matter, it nevertheless seems to me a doubtful proposition. The answer to the question would depend upon an examination of a number of considerations, including the actual terms upon which counsel agreed to do the work he was asked to do on behalf of Mrs Graham by the Manager of the New South Wales Bar Association's Legal Assistance Scheme. The court does not know what the terms of counsel's engagement were. But, in any event, as I have indicated the question, in my opinion, is not one for this court. It is for the Costs Assessor in the first instance and thereafter whatever the Supreme Court Act and Rules provide for review or appeal. In the last connection, counsel for Aluma-Lite indicated that her client might at this stage be out of time for taking whatever is the next appropriate step to seek to have the point dealt with by review or appeal and asked this court to grant an extension of time for taking whatever that step might be. I do not think the court should accede to this request. It seems to me the appropriate course for this court to take is to refuse the application by Aluma Lite that this court should review its own costs order and leave Aluma-Lite to follow the usual course provided by the Supreme Court Act and Rules. 6 UNREPORTED JUDGMENTS Aluma-Lite's notice of motion in its amended form and confined as it was in the course of argument to orders in a somewhat narrower field than it asked for, aimed at having this court specify orders in a somewhat different form from those announced on 20 March 1996. It also asked that an order be made which would bring to an end, one way or the other, the proceedings in which the default judgment was obtained. It seems to me that the most practical outcome is to dismiss the notice of motion leaving formal orders to be entered in accordance with those announced by this court on 20 March 1996, with the exception that an additional order be made, being that in regard to which Clarke JA reserved liberty to apply when judgment was pronounced on 20 March 1996, namely that there be judgment for the defendant in matter No 11419 of 1994. The costs of the present motion to the court should be part of Mrs Graham's costs of the appeal. Cole JA I agree with Priestley JA Notice of motion dismissed Counsel for the Appellant: A J McQuillan Counsel for the Respondent: C A Needham; V M Heath Solicitors for the Appellant: Bar Association Legal Assistance Scheme Solicitors for the Respondent: Patrick Lim and Associates