New South Wales Court of Appeal CITATION: Malouf v Prince (No 2) [2010] NSWCA 51 HEARING DATE(S): 12 February 2010 JUDGMENT DATE: 23 March 2010 JUDGMENT OF: McColl JA at 1; Macfarlan JA at 1; Nicholas J at 1 DECISION: 1 Dismiss the applicant's original and amended notices of motion with costs. 2 Respondent to pay the costs of the application for leave to file the notice of motion dated 12 February 2010. CATCHWORDS: PROCEDURE – application to set aside or vary orders filed within 14-day time limit prescribed by rules – amended application seeking more extensive orders filed outside 14-day limit – whether Uniform Civil Procedure Rules 2005 (NSW), 36.16 confers power to entertain amended application - PROCEDURE – powers of Court – whether s 14, Civil Procedure Act 2005 (NSW) confers power to dispense with requirements of Uniform Civil Procedure Rules 2005 (NSW), 36.16 - PROCEDURE – whether costs order should be varied LEGISLATION CITED: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 CATEGORY: Principal judgment Bailey v Marinoff [1971] HCA 49; 125 CLR 529 Bennette v Cohen (No. 2) [2009] NSWCA 162 Deputy Commissioner of Taxation v Meredith (No. 2) [2008] NSWCA 133 FS Architects Pty Ltd v Rockcote Enterprises Pty Ltd; FS Architects Pty Ltd v Carelli [2009] HCASL 52 Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd; Jeffery & Katauskas Pty Ltd v Rickard Constructions Pty Ltd (subject to Deed of Company Arrangement) [2009] HCA 43; (2009) 239 CLR 75 CASES CITED: Malouf v Prince [2008] NSWCA 15 Malouf v Prince [2009] NSWCA 159 Newmont Yandal Operations Pty Ltd v J Aron Corp [2007] NSWCA 195; (2007) 70 NSWLR 411 Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336 Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd (No 2); Carelli v FS Architects Pty Ltd (No 2) [2008] NSWCA 205 Spina v Permanent Custodians Limited (No 2) [2009] NSWCA 419 PARTIES: John Malouf - Applicant Stephen Thomas Prince - Respondent FILE NUMBER(S): CA 40173 of 2008 COUNSEL: C R C Newlinds SC and A T S Dawson - Applicant F G Lever SC - Respondent SOLICITORS: Attwood Marshall Lawyers (QLD) - Applicant Walters Solicitors - Respondent LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 24/07 LOWER COURT JUDICIAL OFFICER: McLoughlin DC J LOWER COURT DATE OF DECISION: 11/06/08, 12/06/08 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40173/08 DC 24/2007 McCOLL JA MACFARLAN JA NICHOLAS J Tuesday 23 March 2010 John Malouf v Stephen Thomas Prince (No 2) Judgment 1 THE COURT: On 24 June 2009 the Court made the following orders in Malouf v Prince [2009] NSWCA 159 ("Malouf 1"): "1 Application for leave to appeal refused with costs. 2. Motion to allow further evidence dismissed. 3 Applicant to pay the costs of the application before Beazley JA, for leave to appeal and the motion to allow further evidence. 4. Respondent's motion for dismissal of the application for leave to appeal dismissed. 5. No order as to costs in respect of the respondent's motion." The history of the proceedings is sufficiently set out in Malouf 1. 2 The orders were entered the same day when, according to the court's records, they were "recorded in the court's computerised court record system": Uniform Civil Procedure Rules 2005 ("UCPR") 36.11(2). 3 On 8 July 2009 the applicant filed a notice of motion (the "original notice of motion") in which, relevantly, he sought the following orders: "1 That orders 1 and 3 made on 24 June 2009 be vacated and substituted with the following orders a Application for leave to appeal refused. b Each party bear their own costs of the proceedings in this Court, save as to the costs before Beazley JA. c The costs of the hearing before Beazley JA be costs in the cause in the District Court proceedings. 2 Such other order or orders as to the Court seem fit. 3 Costs. 4 As can be seen, the original notice of motion sought only to challenge the orders for costs made in Malouf 1. 5 On 11 September 2009 the applicant filed an amended notice of motion in which, relevantly, he sought the following orders: 1 That the Court recall paragraphs 1, 2, 9, 12, 14, 15, 17 and 18 of its reasons for judgment delivered on 24 June 2009. 2 That the orders made on 24 June 2009 be set aside and substituted with the following orders: a Leave to appeal from the whole of the decision and orders made below on: i 11 June 2008 (save as to the order that the solicitor for the Applicant (the plaintiff below) indemnify the Applicant in respect of the costs order made against the Applicant); and ii 12 June 2008 (save as to (1) the order requiring the parties to mediate and (2) as to the direction that the solicitor for the Applicant (the plaintiff below) show cause as to why he should not indemnify the Applicant in respect of the costs order made against the Applicant). Application for leave to appeal granted. b Appeal allowed. c The decision and orders made below on: 1 11 June 2008; and 2 12 June 2008, be set aside save as to the order made on 12 June 2008 requiring the parties to mediate. d The respondent pay the appellant's costs of this appeal and the hearings below on 11 and 12 June 2008. e The costs of the hearing before Beazley JA be costs in the cause in the District Court proceedings. 3. Further and in the alternative to order 2, that orders 1 and 3 made on 24 June 2009 be set aside and substituted with the following orders: a Application for leave to appeal refused. b Each party bear their own costs of the proceedings in this Court, save as to the costs before Beazley JA. c The costs of the hearing before Beazley JA be costs in the cause in the District Court proceedings." 6 The amended notice of motion sought to challenge not only the costs orders made in Malouf 1, but also sought to set aside the substantive order refusing leave to appeal and substitute an order granting leave to appeal and allowing the appeal. It also sought to have those paragraphs of the reasons in Malouf 1 critical to the making of the order refusing leave to appeal recalled. The recall application was, accordingly, ancillary to the claim for order 2. 7 The power of the Court to set aside or vary a judgment or order is found in UCPR 36.16 which relevantly provides: " 36.16 Further power to set aside or vary judgment or order (1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order. … (3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it: (a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or … (3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered. … (3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B)." 8 On 12 October 2009 Beazley JA varied the costs order she had made in the stay application in the proceedings (Malouf v Prince [2008] NSWCA 15 (at [26])), with the consequence that the applicant no longer sought order 1(c) in the original notice of motion or order 2(e) in the amended notice of motion. 9 The respondent accepted that as the original notice of motion was filed on 8 July 2009, it was filed within the 14 days limited by UCPR 36.16(3A). However he submitted that the Court could not entertain the amended notice of motion to the extent it sought to challenge orders not challenged within that period. 10 The applicant submitted that on the proper construction of UCPR 36.16(3A), the power of the Court to set aside or vary was not confined to a judgment or an order specified in a notice of motion filed within the 14 day time limit, but extended to such others as might be specified by an amendment of the notice of motion made after expiry of the time limit. In other words, it was contended, in substance, that the effect of filing a notice of motion within time under UCPR 36.16(3A), albeit limited to challenging only one order, was to expose all the orders made to being set aside or varied. 11 The 14-day window afforded by UCPR 36.16(3A) creates an exception to the principle that ordinarily a court has no power to set aside a final judgment after it has been entered: Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd (No 2); Carelli v FS Architects Pty Ltd (No 2) [2008] NSWCA 205 (at [8]) per Campbell JA (McColl JA and Handley AJA agreeing) (Special Leave Refused: FS Architects Pty Ltd v Rockcote Enterprises Pty Ltd; FS Architects Pty Ltd v Carelli [2009] HCASL 52); see also Bennette v Cohen (No. 2) [2009] NSWCA 162 per Tobias JA (at [9]) (Ipp and Campbell JJA agreeing); Deputy Commissioner of Taxation v Meredith (No. 2) [2008] NSWCA 133 (at [6] – [7]) per Basten JA (Ipp JA agreeing). 12 In Bennette v Cohen the Court considered an application purportedly pursuant to UCPR 36.16 but which was filed outside the 14-day period referred to in subrule (3A). Tobias JA (at [9]) held that the court had no power to accede to that application, even if it was otherwise minded to do so. His Honour observed: "9 ...This lack of power is confirmed by r 36.16(3C) which prohibits the Court from extending the time limited by sub-rule (3A)." 13 The principle to which Campbell JA referred in Rockcote reflects the general rule stated in Bailey v Marinoff [1971] HCA 49; 125 CLR 529 (at 530) by Barwick CJ on an appeal from this Court that: "Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed." See also Newmont Yandal Operations Pty Ltd v J Aron Corp [2007] NSWCA 195; (2007) 70 NSWLR 411. 14 In Deputy Commissioner of Taxation v Meredith (No. 2) Basten JA explained: "15 The clear purpose of [UCPR 36.36] is to allow a window of 14 days after entry of judgment, in courts where entry takes place automatically and largely contemporaneously with the delivery of judgment. The removal of the power to extend the 14-day period makes it sufficiently clear that the intention is that the period is not variable, but reflects the need for judgments and orders to be final and certain as to their operation." 15 Bennette v Cohen (No 2) and Deputy Commissioner of Taxation v Meredith (No. 2) establish that the Court has no power to entertain an application pursuant to UCPR 36.16 where the notice of motion seeking relief is filed outside the 14-day window. The question this Court has to determine is whether the UCPR 36.16 power the Court has when a notice of motion is filed within the 14-day window, extends to an application to vary or set aside an order which was not sought within the 14-day window. 16 In our view the Court does not have that power. Nothing in the language of UCPR 36.16 supports such a construction. Rather, the language of the rule makes it plain that the matter the Court is empowered to determine is the question raised by a notice of motion filed within time for the setting aside or variation of a judgment or order. 17 The words "as if the judgment or order had not been entered" in subrule (3A) direct attention to the judgment or order addressed by the notice of motion filed within the 14-day window. The use of the definite article "the" with "judgment or order" where appearing serves to identify the judgment or order as that with which that notice of motion is concerned. The inability to extend the time period for which subrule (3A) provides confirms the limited nature of the Court's power. This is consistent with the fact that UCPR 36.16 operates as an exemption from the general rule earlier referred to. However the gateway to relief is narrow. If it were otherwise it would undermine "the need for judgments and orders to be final and certain as to their operation": Deputy Commissioner of Taxation v Meredith (No. 2) (at [15]). 18 The applicant submitted, in the alternative, that it was open to the Court to dispense with all the requirements of UCPR 36.16 pursuant to s 14 of the Civil Procedure Act 2005 (NSW) ("CPA") and so determine the issues raised by the amended notice of motion. Section 14 provides: " 14 Court may dispense with rules in particular cases In relation to particular civil proceedings, the court may, by order, dispense with any requirement of rules of court if satisfied that it is appropriate to do so in the circumstances of the case." 19 The applicant did not point to any authority to support his s 14 submission. 20 In Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd; Jeffery & Katauskas Pty Ltd v Rickard Constructions Pty Ltd (subject to Deed of Company Arrangement) [2009] HCA 43; (2009) 239 CLR 75 the plurality (French CJ, Gummow, Hayne and Crennan JJ) observed in dicta (at [23]) that s 14 was arguably limited in its application "to rules imposing some duty on parties and [did] not extend it to a rule imposing limitations on the power of the court to order costs." UCPR 36.16 plainly falls into the former category insofar as it requires the applicant for an order to file a notice of motion within the 14-day window. 21 There are decisions of this Court which contemplate that a costs order could be varied notwithstanding that no notice of motion was filed within the 14-day window where there had been an oral application to vary it within that period, and if either UCPR 36.16(3) or s 14 were invoked: see Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 (at [9] - [12]); Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336 (at [6]); Spina v Permanent Custodians Limited (No 2) [2009] NSWCA 419 (at [9]). No such oral application was made in this case either in relation to the orders sought in the original or amended notices of motion. 22 It is unnecessary to conclude whether s 14 affords the power for which the applicant contends, because counsel for the applicant frankly acknowledged that even if the s 14 power was available, the Court would be guided in the exercise of the discretion that section plainly affords by the need for finality of judgments and orders. He also accepted that he could not point to any circumstances, such as an explanation for the failure to include in the original notice of motion the claim for orders 1 and 2 in the amended notice of motion, which might attract any s 14 discretion. Absent identification of any such circumstances, rejection of the s 14 submission was inevitable. 23 However, in our opinion there is another obstacle to the s 14 submission. Even if the Court were to dispense with the requirement that the applicant file a notice of motion, the Court would be required to consider the application in accordance with the general rule in Bailey we have extracted above. The applicant properly conceded that he could not bring his case within any exception to the general rule in Bailey. 24 Accordingly we would conclude that the Court does not have power to determine the claim for order 2 in the amended notice of motion, nor, even if it could dispense with UCPR 36.16 pursuant to s 14 (a point it is unnecessary to decide), are there any circumstances which would attract the exercise of that discretion. That being the case, it is unnecessary to address the ancillary claim for order 1 in the amended notice of motion. 25 That leaves for consideration the claim in the original notice of motion to vary the order made in Malouf 1 that the applicant pay the costs of the application for leave to appeal, a claim the applicant repeated no doubt out of abundant caution in the application for order 3 in the amended notice of motion. The alternative order sought in the original notice of motion was an order that "each party bear their own costs of the proceedings in this Court". In oral submissions the applicant sought an order that the respondent pay his costs, an order he conceded faced difficulties if the order refusing that leave stood. 26 The applicant submitted that it was appropriate to make the new costs order if the ground for the Court refusing leave to appeal in Malouf 1 was that the injustice suffered by the primary judge's refusal of the adjournment of the trial had been effectively remedied by the stay Beazley JA ordered on 13 June 2008. 27 Whilst the matter relied upon by the applicant is relevant to the exercise of the Court's discretion as to costs, the order that the applicant pay the costs of the leave application should stand, in our opinion, because the findings in Malouf 1 (at [15]), as elaborated below, amply support the proposition that the application for leave to appeal would have been dismissed even if Beazley JA had not granted a stay. 28 It is convenient to set out paragraph [15] from Malouf 1: "15 Accordingly, the only remaining issue is his Honour's costs orders. The applicant addressed detailed arguments to the factual findings the primary judge made in refusing the adjournment application. As is apparent from Beazley JA's judgment, the primary judge's findings were based, in part, on the primary judge's credit findings in relation to the applicant's solicitor. In order to mount an arguable case for leave to appeal it would be necessary for the applicant to demonstrate that his Honour's factual findings were affected by an error of the sort identified in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118. In my view, the applicant has not demonstrated on an arguable basis that his Honour's findings of fact were inconsistent with any incontrovertible fact, glaringly improbable or contrary to compelling inference. Accordingly, in my view, the applicant has not demonstrated that he has any arguable prospect of success if granted leave to appeal from the costs orders." 29 The thrust of the applicant's submissions was that, on the evidence before his Honour, it was not open to the primary judge to order him to pay the costs of the unsuccessful adjournment application. This submission turned on the proposition that it was not open to his Honour to conclude that the applicant's solicitor, Mr Mills, was aware that the matter was listed for trial at the Lismore sittings and, the contention that but for its misapprehension of that evidence, the Court should have granted leave to appeal. The Court was again taken to the evidence in detail but, in our opinion, further review serves only to confirm the conclusion in Malouf 1, at [15] set out above. 30 The applicant's case before the primary judge was that Mr Mills never received a notice of listing, and was unaware that the matter had been listed for trial at the sittings of the Lismore District Court commencing 10 June 2008. 31 In his reasons of 11 June 2008 the primary judge found: (i) Mr Mills attended a status conference on 9 April 2008 when he indicated to the registrar the matter was ready to proceed; (ii) Mr Mills sent an email to Mr Dawson which established that Mr Mills was aware the matter was listed for hearing in the June sittings, a conclusion which plaintiff's counsel, Ms C Smith, conceded; (iii) that the plaintiff was totally unprepared to proceed, and Mr Mills had taken his chances that the matter would not be accommodated in the sittings, and had done nothing. His Honour repeated these findings in his reasons of 12 June 2008. 32 His Honour said that where the evidence of Ms Newbold, the respondent's solicitor, and of Mr Mills was in conflict, he preferred the evidence of Ms Newbold. 33 The following is a summary of relevant evidence. 34 Mr Mills said that he attended the status conference on 9 April 2008, and on returning to his office the same morning he sent an email to Mr Dawson which, relevantly, included the following: "Appeared at status conference this morning, matter adjourned to Lismore District Court for mention at callover during sittings beginning 10 June 2008. I am informed by one of our New South Wales lawyers who has matters in the list for the sittings starting on Monday that because of the length of the list the matter is unlikely to be reached during the June sittings. In any event, the other side have indicated they will agree to the case being given a special fixture given the length of the trial and number of witnesses." 35 His evidence proceeded (T, 11 June 2008, p 4, line 36 – p 5, line 20): "HIS HONOUR Q Just read that last sentence for me? A "In any event the other side have indicated that they will agree to the case being given a special fixture, given the length of the trial and the number of witnesses". … Q This indicates that you expected the matter to come to trial during these sittings? A No that's not the case your Honour. Q I'll just read what it says, "I am informed by one of our New South Wales lawyers who has matters in the list for the sittings starting on Monday that because of the length of the list matter is unlikely to be reached during the June sittings", what does that mean, it means it's in for hearing doesn't it? A Yeah, what I meant by that your Honour is that the matter would be listed for callover and at the callover -- Q Well that's not what that means? A Well that was the intention. Q "In any event the other side have indicated they will agree to the case being given a special fixture" that I assume is during the currency of the sittings? A That was my expectation your Honour." … "HIS HONOUR Q But you told the registrar it was ready for hearing, is that right, there's no qualification about that? A That's probably right your Honour. KINSELLA Q In the normal course if you were familiar with the civil directions issued by Judge Garling some years ago that when a case is listed for hearing it is listed for hearing at the next sittings of the court which in this case was 10 June? A Yes. Q You knew that? A I knew that it was coming to Lismore for trial, I didn't know that the trial was going to start on 10 June." and, in re-examination (T p 10, l 21 – 32): "Q Just one question Mr Mills in relation to the e-mail that you sent to Mr Dawson you did make the comment in there that matters in the list for the sittings starting on Monday but because of the length of the list the matter is unlikely to breached during the June sittings, could you please explain to the court what you meant – what exactly you meant by that statement? A What I meant by that is I didn't realise that we were going to be number one or number two in the list." 36 In response to the primary judge's statement that the email meant the matter was in the list for hearing, Ms Smith said (T p 12, l 15 – 18): "SMITH: With respect I don't think there's any doubt that Mr Mills is admitting that he knew the matter was in for hearing however he did not expect that it being in for hearing meant it would be heard on 10 June." 37 In his affidavit of 4 June 2008 (par 9) Mr Mills stated he had not received a notice of listing, although the registrar had sent one to the respondent's solicitors on 9 April 2008 advising that the matter had been listed at 10am on 10 June 2008 for hearing at the Lismore District Court. Mr Mills was not challenged on that evidence. 38 In summary, on 9 April 2008, Mr Mills informed the registrar the matter was ready for hearing, sent the letter to the defendant's solicitors, and sent the email to Mr Dawson. In our opinion, this evidence, taken with the oral evidence, provides ample support for the primary judge's conclusion that Mr Mills was aware that the matter was listed for hearing at the commencement of the sittings on 10 June 2008. 39 Mr Mills' evidence, assuming it was accepted, that he did not receive a notice of listing, did not undermine the validity of the primary judge's findings. Furthermore, his Honour's findings were reasonably open without reference to Ms Newbold's unchallenged affidavit evidence. The respondent's application 40 During the hearing of the present proceedings the respondent sought leave to file in court a notice of motion dated 12 February 2010, in which orders were sought for an extension of time, and that the order made by Beazley JA on 13 June 2008 be varied to read: "That costs of today's Notice of Motion to be costs in the cause in this Court". 41 Submissions were heard on the basis the Court would determine the question of leave when it delivered its reasons on the substantive application. 42 The relevant background is as follows. 43 On 13 June 2008 Beazley JA ordered that the costs of the notice of motion before her be costs in the cause. On 12 October 2009 she varied the order to the effect that the costs be costs in the cause in the District Court proceedings. It appears that the variation was made to reflect the intention that the costs of the proceedings before her were to abide the outcome of the proceedings in the District Court. This is evident from the relevant transcript (p 48, Iine 35 – p 49, line 4) which shows that the applicant's counsel acknowledged that the practical effect of the stay was that his purpose had been achieved, and hence, there may be no appeal. 44 Until the matter was raised before the Registrar of the Court of Appeal on 27 July 2009, the respondent's representatives proceeded on the basis that her Honour's order meant what it said, namely that the costs of the proceedings before her Honour would abide the costs in the Court of Appeal. 45 Notice of the respondent's challenge to the order was given on 22 October 2009 in submissions in opposition to the present application, to which a draft of the notice of motion was annexed. 46 In our opinion the respondent's application should be refused. The intention that the costs order abide the outcome of the District Court proceedings was in accordance with the suggestion made before Beazley JA by counsel for each party. In response to her Honour's question whether the costs should be costs in the appeal, respondent's counsel, Mr R Weaver, said (T p 48, line 39): "There is a difficulty your Honour, if I may, in respect of making them costs in the appeal of course, because if the matter is now remitted and continues, effectively there may be no appeal." 47 We are satisfied that in the circumstances there is no basis upon which this Court should interfere with the order. Accordingly, leave to file the notice of motion should be refused. Orders 48 We propose the following orders: 1. Dismiss the applicant's original and amended notices of motion with costs. 2. Respondent to pay the costs of the application for leave to file the notice of motion dated 12 February 2010. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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