Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Boland v Dillon; Cush v Dillon [2015] NSWCA 183 Hearing dates: 12 March 2015 Date of orders: 02 July 2015 Decision date: 02 July 2015 Before: McColl JA [1] Gleeson JA [16] Bergin CJ in Eq [22] Decision: (1) In matter 2009/298338 the Notice of Motion is dismissed, with costs; (2) In matter 2009/298211 the Amended Notice of Motion is dismissed, with costs. Catchwords: ORDERS – ENFORCEMENT – Where costs orders made in appeal in 2010 in which re-trial on limited issue ordered – where appeal from orders dismissed in High Court – where outcome of re-trial favourable to parties against whom costs orders were made – whether party in whose favour costs orders were made should be prohibited from enforcing them Legislation Cited: Civil Procedure Act 2005 Defamation Act 1974 Uniform Civil Procedure Rules 2005 Cases Cited: Australian Beverage Distributors Pty Ltd v Evans & Tate Premium Wines Pty Ltd [2007] NSWCA 57; (2007) 69 NSWLR 374 Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 Burrell v The Queen [2008] HCA 34; (2008) 238 CLR 218 Cush v Dillon; Boland v Dillon [2009] NSWDC 21 Cush v Dillon; Boland v Dillon [2011] HCA 30; (2011) 243 CLR 298 Cush v Dillon; Boland v Dillon (District Court (NSW), Charteris SC DCJ, 19 April 2013, unrep) Cush v Dillon; Boland v Dillon (District Court (NSW), Charteris SC DCJ, 3 September 2013, unrep) Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133; (2008) 75 NSWLR 462 De L v Director-General, Department of Community Services (NSW) (No 2) [1997] HCA 14; (1997) 190 CLR 207 Dillon v Boland; Dillon v Cush [2012] NSWCA 364 Dillon v Cush; Dillon v Boland [2010] NSWCA 165 D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 Forge & Ors v Australian Securities & Investments Commission [No 2] [2007] NSWCA 42; (2007) 69 NSWLR 575 Grace v Thomas Street Café Pty Ltd (No 2) [2008] NSWCA 72 Kelly v Mina [2014] NSWCA 9 Kounnas v Citywide Civil Engineering Pty Ltd [2012] NSWCA 287 Permewan Wright Consolidated Pty Ltd v Attorney-General for the State of New South Wales on the relation of Franklins' Stores Pty Ltd (1978) 35 NSWLR 365 R v Marks; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation [1981] HCA 33; (1981) 147 CLR 471 Re Inchcape (Earl of); Craigmyle v Inchcape [1942] Ch 394 Sakr v Mercantile Mutual Insurance (Australia) Limited [2000] NSWCA 266 Shedden v Patrick (1854) 1 Macq 535, HL, 590 Wishart v Fraser [1941] HCA 8; (1941) 64 CLR 470 Thiess Pty Ltd and Hochtief AG v Industrial Court of New South Wales [2010] NSWCA 252; (2010) NSWLR 94 Texts Cited: K R Handley, Spencer Bower and Handley Res Judicata (4th ed 2009, LexisNexis) Category: Procedural and other rulings Parties: Amanda Cush (First Applicant) Leslie Francis Boland (Second Applicant) Meryl Lurline Dillon (Respondent) Representation: Counsel: T Alexis SC/R Hardcastle (Applicants) MJ Lewis/BA Mee (Respondent) Solicitors: Cole & Butler (Applicants) Banki Haddock & Fiora (Respondent) File Number(s): CA 2009/298338 CA 2009/298211 Publication restriction: Nil Decision under review Court or tribunal: Court of Appeal Citation: [2010] NSWCA 165 Date of Decision: 15 July 2010 Before: Allsop ACJ, Tobias JA, Bergin CJ in Eq File Number(s): 40173/2009 40174/2009 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Decision under review HEADNOTE [This headnote is not to be read as part of the judgment] The applicants, Ms Cush and Mr Boland, sought orders pursuant to s 135 of the Civil Procedure Act 2005 that the respondent, Ms Dillon, be prohibited from enforcing a costs order in her favour made in 2010 (the 2010 Costs Order). The 2010 Costs Order was made by the Court of Appeal in a successful appeal by the respondent against a decision of the District Court finding her liable for defamation of the applicants (Dillon v Cush; Dillon v Boland [2010] NSWCA 165). The Court of Appeal held that the trial judge erred in failing to find that the publication was made on an occasion of qualified privilege and ordered a re-trial. In 2011 the applicants' appeals to the High Court were dismissed with costs. The orders for new trials were limited to the issue of malice. In 2013 the re-trial judge found that the respondent misused the occasion of qualified privilege so as to damage the applicants' reputation in a manner that constituted malice. The applicants contended that the 2010 Costs Order should not be enforced in light of the successful outcome of the re-trial. Held: The justice of the case requires that the applications be dismissed, given the unexplained and lengthy delay by the applicants in filing their applications under s 135 and their failure to make any application under UCPR 36.16(3A) to set aside or vary the 2010 Costs Orders: [96], [14], [17]. McColl JA (Gleeson JA and Bergin CJ in Eq finding it unnecessary to decide the issue): This Court cannot accede to the applications because the 2010 Costs Orders are no longer a judgment or order of this court. Those orders have become merged in the High Court judgment: [10]. Forge & Ors v Australian Securities & Investments Commission [No 2] [2007] NSWCA 42; (2007) 69 NSWLR 575 at [3] applied. Judgment 1. McCOLL JA: I have had the advantage of reading in draft the reasons of Bergin CJ in Eq. In these reasons I use the definitions her Honour has ascribed to the relevant orders and hearings. 2. As her Honour has explained, the applicants seek orders pursuant to s 135 of the Civil Procedure Act 2005 (NSW) (the "CPA") precluding the respondent from enforcing the 2010 Costs Orders. 3. The 2010 Costs Orders were made by this Court when allowing the respondent's appeals from the first trial and holding that the primary judge had erred in failing to find that the publication had occurred on a privileged occasion. [1] Subsequently the applicants appealed by grant of special leave to the High Court of Australia. That Court dismissed the appeals with costs. [2] 4. French CJ, Crennan and Kiefel JJ expressed the view in their joint reasons that the third order of the Court of Appeal in the 2010 Appeal should be varied to require a new trial on the issue of malice. [3] Gummow, Hayne and Bell JJ in their joint reasons and Heydon J in separate reasons also agreed that the appeal should be dismissed with costs, but did not expressly address the ambit of the new trial. However as the High Court unanimously held that the matter complained of was published on an occasion of qualified privilege, the only remaining issue was whether the respondent was actuated by malice in speaking the impugned words. That was the manner in which both parties approached the re-trial. [4] 5. On 27 October 2014, some sixteen months after the re-trial was determined in their favour, the applicants filed their Notices of Motion seeking to preclude the respondent from enforcing the 2010 Costs Orders. 6. The respondent identified a threshold issue in her written submissions in this Court, namely that the Motions should have been filed in the High Court as it was the last appellate court to consider the 2010 Costs Orders and its decision supplanted any orders made by this Court in the 2010 Appeal. 7. The applicants did not file any reply submissions, nor did Mr T Alexis of Senior Counsel, who appeared with Mr R Hardcastle for the applicants, address the threshold issue in his oral submissions. It can be taken, accordingly, in my view, that he had no response to it. 8. The Honourable Mr Justice K R Handley explained in Spencer Bower and Handley: Res Judicata, that when "an appeal fails, the decision of the appellate court becomes the source of any estoppels". [5] The reason for this consequence has been variously expressed. The orders of the lower court are said to have "become merged in the judgment" of the appellate court, [6] or to have been "replaced" by the decision of the appellate court, whose decision is henceforth "the operative decision … for all purposes". [7] 9. Put slightly differently, the High Court decision confirmed that the 2010 Appeal decision was correct but, as the higher appellate court, its decision "holds the field so long as it stands unreversed, and precludes this court making any judicial determination to the contrary." [8] Acceding to the applicants' Motions would prevent the respondent from enforcing the 2010 Costs Orders and would, accordingly, subvert the High Court's implicit decision to let those orders stand. It would, in substance, be a decision to the contrary of the High Court's. 10. Accordingly, this Court cannot accede to the Motions because the 2010 Costs Orders are no longer "a judgment or order of [this] court". [9] Rather, as I have explained, those orders have become merged in the High Court judgment. 11. In my view the applicants' Notices of Motion were incompetent. [10] 12. Alternatively, I would, in any event, dismiss the Motions. The applicants permitted the respondent to participate in the re-trial without any indication that they proposed, at some stage, to challenge the 2010 Costs Orders. The applicants placed much weight, in contending that the s 135 discretion ought to be exercised to reflect the justice of the case, on the respondent's failure to give evidence at the re-trial. That, in my view, was a forensic decision the respondent was entitled to make, just as the applicants were entitled to re-frame their malice case prior to the re-trial. The transcript of the respondent's evidence at the first trial was available to the applicants and, as Bergin CJ in Eq's reasons demonstrate, was used to their advantage at the re-trial. 13. It might also be presumed that the applicants made a forensic decision not to apply pursuant to Uniform Civil Procedure Rules 2005 (NSW) 36.16(3A) to set aside or vary the 2010 Costs Order within 14 days after it was entered. 14. This Court should not condone the applicants' failure to exercise rights available to them contemporaneously with the delivery of the judgment in the 2010 Appeal by acceding to their Motions nor their egregious delay in taking any steps to preclude the enforcement of the 2010 Costs Orders. To do so would be contrary to the interests of justice generally and as expressed in s 56 of the CPA. 15. I agree with the orders Bergin CJ in Eq proposes. 16. GLEESON JA: These applications to prohibit enforcement of a costs order made by this Court on 15 July 2010 (the 2010 Costs order) are a belated attempt to challenge such order almost five years after it was made, in circumstances where the applicants cannot now achieve directly under Uniform Civil Procedure Rules 2005 (NSW), r 36.16 what they seek to achieve indirectly relying upon s 135 of the Civil Procedure Act 2005 (NSW). This is because the applicants did not apply by notice of motion seeking to set aside or vary the costs order within 14 days after the 2010 Costs order was entered: r 36.16(3A). 17. For the reasons given by Bergin CJ in Eq, with which I agree, there are powerful discretionary reasons against granting the relief now sought by the applicants. 18. As to the question of this Court's power to make such an order, I agree with Bergin CJ in Eq that it is unnecessary to determine this question, for the reasons given by her Honour. These applications are capable of disposition upon the assumption, most favourable to the applicants, that the Court does have power under s 135 to prohibit enforcement of the 2010 Costs order. 19. It may be accepted that following upon appeals to this Court and to the High Court, the operative order for a new trial in the District Court on the issue of malice is that of the High Court: Forge v Australian Securities & Investments Commission [No 2] [2007] NSWCA 42; 69 NSWLR 575 (Forge) at [5]. It may also be accepted that the orders of the High Court are now the source of any res judicata estoppels: Forge at [3] citing Wishart v Fraser [1941] HCA 8; 64 CLR 470; R v Marks; Ex parte Australian Building Construction Employees and Builders Labourers' Federation [1981] HCA 33; 147 CLR 471 at 476. 20. However, it does not necessarily follow that the 2010 Costs order made by this Court ceased to have any effect after the High Court dismissed the appeal from the judgment of this Court which included that 2010 Costs order. This is a difficult question. It is unnecessary to determine this question to dispose of these applications. 21. I agree with the orders proposed by Bergin CJ in Eq. 22. BERGIN CJ in EQ: The applicants, Amanda Cush and Leslie Francis Boland, and the respondent, Meryl Lurline Dillon, have been litigating for many years over a defamatory and false statement made by the respondent that the applicants were having an affair (the Statement). The Statement was made in a work environment and was ultimately found to have been made maliciously to undermine the applicants' positions in the Border Rivers-Gwydir Catchment Management Authority (CMA). 23. The applicants seek orders pursuant to s 135 of the Civil Procedure Act 2005 (CPA) precluding the respondent from enforcing costs orders made by this Court on 15 July 2010 (the 2010 Costs Orders). It is necessary to review some of the litigious history to consider the applications in context. The trial 1. In February 2006 each of the applicants commenced proceedings in the District Court of New South Wales against the respondent seeking damages in respect of the publication of the Statement by the respondent in April 2005. 2. The trial pursuant to s 7A of the Defamation Act 1974 took place between 5 and 8 November 2007. The jury found that the Statement conveyed defamatory imputations that the applicants in their respective roles with the CMA had acted unprofessionally by having an affair; that Ms Cush was undermining Mr Boland's marriage; and that Mr Boland was unfaithful to his wife. It was common ground at the trial that the applicants did not have an affair and that the respondent did not believe they were having an affair when she made the Statement. 3. The hearing in respect of the defence of qualified privilege and malice took place between 9 and 13 February 2009. Judgment was delivered on 25 February 2009: Cush v Dillon; Boland v Dillon [2009] NSWDC 21 (the trial judgment). The trial judge did not determine whether the Statement was published on an occasion attracting qualified privilege because he concluded that even if it were such an occasion the privilege would be lost because of the respondent's malice. The applicants were each awarded damages of $5,000. These awards were never challenged. The 2010 Appeal 1. On 15 July 2010 the respondent's appeals from the trial judgment were allowed: Dillon v Cush; Dillon v Boland [2010] NSWCA 165 (the 2010 Appeal). The applicants contended in their Notices of Contention that the trial judgment should have been affirmed on the ground that they had established that the publication was actuated by malice. The Court held that the trial judge had erred in failing to find the matter complained of was published on an occasion that attracted the defence of qualified privilege, and too, in finding malice. In dealing with one of the particulars of malice this Court said (at [103]): However it is a matter that when combined with other factors, may lead to a conclusion that the Appellant [the respondent in this application] was motivated by malice. This would involve the evaluation of the Appellant's denial that she was motivated to damage the Respondents' standing with the Board. However, this is not a matter with which this Court can deal. 1. The Court also said (at [110]) that it was "not appropriate for this Court to make findings based on matters that require the evaluation of the Appellant's evidence and whether it should be accepted". 2. The appeals were allowed, the trial judge's orders were set aside and a new trial was ordered in respect of the defence of qualified privilege. The orders in each case included the following: 4. The Respondent is to pay the Appellant's costs of the appeal, including the application for leave to appeal and is to have a certificate under the Suitors' Fund Act 1951 if so qualified. These are the 2010 Costs Orders that are the subject of the present application. 1. On 13 August 2010 the orders made by this Court were entered. Appeal to the High Court 1. On 10 December 2010 the applicants sought and were granted special leave to appeal to the High Court of Australia. The applicants sought orders that the orders of this Court made on 15 July 2010 be set aside. They also sought an order that the respondent pay their costs of the 2010 Appeal. 2. The High Court heard the appeals on 7 April 2011 and delivered judgment on 10 August 2011: Cush v Dillon; Boland v Dillon [2011] HCA 30; 243 CLR 298. The appeals were "dismissed with costs". The orders for new trials were adjusted to limit them to the issue of malice. Offer of Settlement 1. On 11 November 2010 the respondent's solicitor had made an offer to settle the proceedings on the basis that there would be a verdict for the respondent (as defendant) and that each party would bear his and her own costs in relation to all proceedings. That offer included the following: For the purpose of clarification, our client would forego her costs order, which she already holds in relation to the Court of Appeal proceedings. … This is a genuine and generous attempt to resolve this long-running dispute. Your prompt response would be appreciated. Should this offer not be accepted, our client intends to rely upon this correspondence in relation to any claim she may have for future costs. The amendments to particulars of malice 1. On 29 February 2012 the applicants (as plaintiffs) filed an application in the District Court to further amend their Replies (which was opposed by the respondent as defendant) to include additional particulars of malice, one of which (particular (xx)) was that the respondent published the defamatory material to undermine the applicants' positions with the CMA. 2. The amendment application was heard on 17 May 2012. On 13 July 2012 the re-trial judge allowed the amendment. 3. On 15 October 2012 the respondent sought leave to appeal from the order allowing the amendment. On 30 October 2012 the application for leave to appeal was dismissed with costs: Dillon v Boland; Dillon v Cush [2012] NSWCA 364. The re-trial 1. The re-trial limited to the question of whether malice defeated the defence of qualified privilege was heard for four days in the District Court commencing on 12 November 2012. The respondent did not give evidence at the re-trial. 2. In his judgment delivered on 19 April 2013 the re-trial judge found that the respondent misused the occasion of qualified privilege so as to damage the applicants' reputation in the eyes of the recipient in a manner which constituted malice: Cush v Dillon; Boland v Dillon (District Court (NSW), Charteris SC DCJ, 19 April 2013, unrep) at [110]. 3. The re-trial judge also referred to the decision made by the respondent for "strategic reasons, for forensic advantage" not to give evidence in the re-trial. The trial judge said: [111] As regards the failure of the defendant to give evidence, I repeat that I consider it was a strategic forensic decision. In the High Court judgment there was recorded agreement with the decision of Bergin CJ in Eq when she said it was not appropriate for the Court of Appeal to assess the defendant's evidence. I have before me only the evidence she gave on another occasion. I am able to more confidently draw inferences adverse to the defendant from the available circumstantial evidence because I have not had the opportunity of seeing the defendant give her evidence and being tested upon it. To use an expression used by a superior court judge some years ago in a different case and context, the defendant wants me to give weight and force to the evidence she gave on a previous occasion by looking at the words that stare coldly at me from the page. [112] I am comfortably satisfied that each plaintiff has established malice. The defence of qualified privilege at common law cannot succeed. There will be a verdict in favour of each plaintiff against the defendant. 1. The re-trial judge heard the costs argument on 27 June 2013. The respondent's written submissions on costs referred to the fact that she had been awarded the 2010 Costs Orders, as well as the costs in the High Court. 2. The re-trial judge delivered the costs judgment on 3 September 2013. That judgment (Cush v Dillon; Boland v Dillon (District Court (NSW), Charteris SC DCJ, 3 September 2013, unrep) included the following at [2]): Orders as regards costs in the Court of Appeal and in the leave application and hearing in the High Court as regards costs have been made. The defendant was successful in each of those courts and has an order in her favour as regards those hearings on appeal. 1. The re-trial judge then went on to consider the various settlement offers that had been made by the respective parties during the course of the litigation and said (at [35]): Mr Lewis noted that the defendant was successful in costs order (sic) in both the Court of Appeal and the High Court; the remaining costs issues before me are the costs of the s 7A hearing, the defence and damages trial of 2009, and the "malice" trial before this court in 2012. 1. On 18 November 2013 the following orders were made in each matter: 1. Verdict and judgment for the plaintiff in the sum of $6,600.00 inclusive of interest thereon to the date of judgment and thereafter interest on the judgment pursuant to s. 101 of the Civil Procedure Act 2005. 2. The Plaintiff pay the Defendant's costs of her [his] application to amend her [his] reply brought in May 2012, amending the particulars of malice. 3. The Defendant pay 65% of the Plaintiff's costs of the proceedings until 30 September 2007 (inclusive) on a party/party basis. 4. The Defendant pay 65% of the Plaintiff's costs of the proceedings from 1 October 2007 until 30 November 2007 (inclusive) on an indemnity basis. 5. Subject to Order 2, the Defendant pay the Plaintiff's costs of the remainder of the proceedings from 1 December 2007 (inclusive) on an indemnity basis. 6. That there be no award of interest on costs pursuant to s. 101 Civil Procedure Act (NSW) 2005. Notice of Intention to Appeal from re-trial judgment 1. On 4 October 2013 the respondent filed a Notice of Intention to Appeal from the re-trial judgment. The time for the filing of a Notice of Appeal expired on 10 December 2013. The respondent did not file a Notice of Appeal. Subsequent Events 1. There was a delay (not attributable to the parties) from 3 September 2013 to 8 May 2014 in obtaining a copy of the re-trial judge's costs judgment. In the interim the applicants had pursued the respondent for payment of the judgments. In this regard they had filed an Examination Notice on 27 November 2013. 2. On 6 March 2014 the respondent's solicitor wrote to the applicants' solicitor noting that an Examination Order had been issued against the respondent, service of which was effected on 3 March 2014. The respondent's solicitor noted that the respondent had already paid the judgment amounts of $6,600 to each applicant on 20 December 2013 and interest on 3 February 2014. It was also noted that costs had not been assessed. It was suggested that the Examination Order was an abuse of process and should be withdrawn. That letter included the following (at 1.2): In relation to Order 2, we note that the defendant is entitled to her costs in respect of the application brought in May 2012 by each plaintiff to amend his and her reply, amending the particulars of malice. We will write to you separately in that regard, including in relation to the costs orders in favour of our client in the New South Wales Court of Appeal and High Court proceedings. 1. The respective solicitors communicated further about the Examination Order which was ultimately withdrawn. 2. Notwithstanding the suggestion in the letter of 6 March 2014 that the respondent's solicitor would write to the applicants' solicitor separately in relation to the 2010 Costs Orders in favour of the respondent, no such communication was received before 1 September 2014 when the applicants' solicitor wrote to the respondent's solicitor in terms that included the following: Our clients have been taking steps to quantify the costs of the trial proceedings in the District Court, which, as you will appreciate, is an enormous task given their longevity since 2006. We will provide you with details of our clients' entitlement to costs on a party/party basis to 30 September, 2007 and thereafter on an indemnity basis, pursuant to orders 3, 4 and 5 made on 10 September, 2013, as soon as we are in a position to. Costs order – Court of Appeal In the meantime, we are instructed to advise that our clients intend to make an application to the Court of Appeal pursuant to section 135 of the Civil Procedure Act 2005 (NSW) for an order prohibiting your client from enforcing the costs order made against them on 15 July, 2010: see especially section 135(2)(c). … The Court of Appeal has a wide discretion under section 135 to stay its own order where the justice of the case requires: … This is such a case. 1. The applicants' solicitor outlined the reasons for the proposed application including that the Notice of Contention filed in each appeal from the trial judgment contended that the trial judge's judgment should have been affirmed on the basis that the publication was actuated by malice, and those contentions were fortified on the re-trial by the "strong findings of malice" by the re-trial judge. 2. The applicants' solicitor also noted that the Court of Appeal did not invite submissions on the issue of costs in light of the order for the re-trial. The applicants' solicitor presumed that the Court of Appeal applied the usual rule that costs followed the event but argued that this overlooked the fact that the respondent's success on the defence of qualified privilege was subject to the re-trial on malice which was determined decisively against her. The applicants' solicitor asked the respondent's solicitor to obtain instructions as to whether the application would be opposed. 3. On 10 October 2014 the respondent's solicitor advised that the respondent did not consent to a permanent stay of the 2010 Costs Orders and would otherwise oppose the application on the grounds that: (1) the applicants had not applied to vary or set aside the 2010 Costs Orders within the required 14 days pursuant to rule 36.16 of the Uniform Civil Procedure Rules (UCPR); (2) the 2010 Costs Orders were currently unenforceable because the costs assessment process had not commenced; (3) the Court of Appeal was functus officio; and (4) the applicants' delay in bringing the application had caused significant and obvious prejudice to the respondent. The application 1. Each of the applicants filed a Notice of Motion on 27 October 2014 in the 2010 Appeal proceedings from the trial judgment in which the orders are sought pursuant to s 135 of the CPA prohibiting the respondent from enforcing the 2010 Costs Orders. Mr Boland filed an Amended Notice of Motion in Court on 3 November 2014 to mirror the additional order sought by Ms Cush that leave be granted to file a Summons seeking the order prohibiting the respondent from enforcing the 2010 Costs Orders. 2. The applications were heard on 12 March 2015 when Mr T Alexis SC, leading Mr R Hardcastle, of counsel, appeared for the applicants and Mr MJ Lewis, of counsel, leading Mr BA Mee, of counsel, appeared for the respondent. 3. The applicants relied on the affidavit of their solicitor, Ormonde Roger Butler, sworn on 31 October 2014. The respondent relied on the affidavit of her solicitor, Bruce Norman Burke, sworn on 19 December 2014. The documents referred to by each of the solicitors in their affidavits comprise the judgments, orders, applications and some of the relevant correspondence between the parties over the years pertinent to these applications. There was no cross-examination of the solicitors. 4. Mr Butler gave affidavit evidence that when "it became apparent" that the respondent was not intending to proceed with her appeal, he was instructed to take steps to recover the judgment sums and the costs of the District Court proceedings and to obtain a copy of the costs judgment of the re-trial judge delivered on 3 September 2013. Mr Butler also gave evidence that he was instructed at that time to consider "in light of the findings of malice against the [respondent] on the re-trial, the reinstatement of the damages judgments and all of the reasons for judgment given by his Honour", whether the 2010 Costs Orders were enforceable. 5. Mr Butler described the process by which he obtained the copy of the costs judgment and the delay in obtaining it. When Mr Butler received the judgment on 8 May 2014 he forwarded it to senior counsel who was unfortunately heavily committed in other work and was "largely unavailable" for some months. Mr Butler took the view that it was preferable to wait until senior counsel became available as he had been involved in the matters for many years. Nature of the application 1. The application is made pursuant to s 135(2)(c) of the CPA. Section 135 provides as follows: 135 Directions as to enforcement (1) The court, may, by order, give directions with respect to the enforcement of its judgments and orders. (2) Without limiting subsection (1), the court may make any of the following orders: (a) an order authorising the Sheriff to enter premises for the purpose of taking possession of goods under a Writ of Execution, (b) an order prohibiting the Sheriff from taking any further action on a writ, (c) an order prohibiting any other person from taking any further action, either permanently or until a specified day, to enforce a judgment or order of the court, (d) an order requiring the Registrar-General to cancel any recording of a writ for the levy of property that, under section 105 of the Real Property Act 1900, has been made in the Register under that Act, either generally or in relation to specified land. 1. This statutory power is concurrent with the Court's inherent jurisdiction and may be exercised on the basis of facts and circumstances occurring after the date that the order was made: Australian Beverage Distributors Pty Ltd v Evans & Tate Premium Wines Pty Ltd [2007] NSWCA 57; (2007) 69 NSWLR 374 per Beazley JA (as her Honour then was) at 402 [140], with whom Hodgson and Santow JJA agreed; Permewan Wright Consolidated Pty Ltd v Attorney-General for the State of New South Wales on the relation of Franklins' Stores Pty Ltd (1978) 35 NSWLR 365 per Reynolds JA at 367 F and Mahoney JA at 374 E. 2. The applicants accepted that there was an avenue available to them under UCPR 36.16 to have the 2010 Costs Order set aside or varied. UCPR 36.16(3A) provides that within 14 days after the relevant order is entered a Notice of Motion may be filed seeking to set aside or vary the order. 3. In D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 at 17 [34] the High Court referred to the "central and pervading tenet of the judicial system" that controversies that are resolved are not to be reopened "except in a few, narrowly defined, circumstances". In Burrell v The Queen [2008] HCA 34; (2008) 238 CLR 218 at 223 [15] Gummow A-CJ, Hayne, Heydon, Crennan and Kiefel JJ said that such tenet "finds reflection in the restrictions upon reopening of final orders after they have been formally recorded". UCPR 36.16 contains such defined circumstances in which an order may be reopened. The discretion under UCPR 36.16 is to be exercised "sparingly": Grace v Thomas Street Café Pty Ltd (No 2) [2008] NSWCA 72 at [8]. In exercising the discretion it is necessary to have regard to the public interest in the finality of controversies: Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133; (2008) 75 NSWLR 462 at 466 [15] per Basten JA with whom Giles and Ipp JJ agreed. In De L v Director-General, Department of Community Services (NSW) (No 2) [1997] HCA 14; (1997) 190 CLR 207 Toohey, Gaudron, McHugh, Gummow and Kirby JJ said at 223: It is one thing to permit reopening of the orders to allow consideration of a matter accidentally overlooked so that it might be taken into account. It is another to provide relief where the party seeking it has, by its own confession, not done all that might have been done to raise the point when it was timely and appropriate to do so. The submissions 1. The applicants submitted that the respondent's success in the 2010 Appeal did not determine liability for the defamatory publication. Rather it was subject to the applicants' contention of malice and the re-trial. The applicants submitted that they won decisively at the re-trial on the respondent's evidence that was before this Court in the 2010 Appeal. The applicants submitted that the re-trial judgment showed that the applicants' contention that the trial judge's judgment should have been affirmed on the grounds of malice was correct. 2. The applicants also submitted that the respondent's conduct of the trial, the appeal and the re-trial all occurred in circumstances where the applicants had in 2007 offered to settle the proceedings with the respondent for payment of $1 and their party/party costs. It was also submitted that the effect on the costs discretion of prior settlement offers being unreasonably rejected could not be determined until after the re-trial. 3. In all of those circumstances the applicants submitted that it is appropriate for each party to pay their own costs of the 2010 Appeal. This would be the effect of prohibiting the respondent from enforcing the 2010 Costs Orders. This is quite a different outcome to the order sought and refused in the High Court that the respondent pay the applicants' costs of the 2010 Appeal. 4. The respondent did not address the order sought by the applicants in the High Court that she pay their costs of the 2010 Appeal. Rather it was submitted that when the applicants sought an order that the orders made by the Court of Appeal "be set aside" this included the 2010 Costs Orders. It was submitted that because the applicants' appeals were "dismissed with costs" the High Court was therefore the last appellate court to consider the 2010 Costs Orders and its decision supplants the orders of the Court of Appeal. 5. The respondent submitted that the applicants have by the filing of the Motions in this Court attempted to subvert the appellate process that relevantly includes the principles of functus officio, res judicata and/or issue estoppel: Shedden v Patrick (1854) 1 Macq 535, HL, 590 at 599; Wishart v Fraser [1941] HCA 8; (1941) 64 CLR 470; R v Marks; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation [1981] HCA 33; (1981) 147 CLR 471 at 476. 6. The respondent submitted that the judgment and orders of the High Court gave effect to that Court's manifest intention relating to the application to set aside the 2010 Costs Orders. It was submitted that incidental matters in relation to the enforceability of the 2010 Costs Orders should therefore be directed to the High Court: Re Inchcape (Earl of); Craigmyle v Inchcape [1942] Ch 394; Sakr v Mercantile Mutual Insurance (Australia) Limited [2000] NSWCA 266; K R Handley, Spencer Bower and Handley Res Judicata (4th ed 2009, LexisNexis) at [5.03]. 7. The respondent also relies upon the following grounds in support of her contention that this Court should not exercise its discretion in the applicants' favour: (1) the applicants are seeking to re-argue the 2010 Costs Order through a back door which is inconsistent with the jurisdiction conferred on the Court pursuant to s 135 of the CPA; (2) the 2010 Costs Orders were regularly entered and are an indemnity; (3) there has been substantial delay and a fundamental change in the applicants' approach; (4) the respondent is prejudiced; and (5) the Notices of Motion are an abuse of process. Consideration 1. Although the respondent did not deal with them in any detail in oral submissions, two inter-related preliminary issues dealt with in her written submissions are: (1) that the applicants are in the wrong court; and (2) the applicants have attempted to subvert the appellate process by bringing these applications in this Court. 2. In the first case relied upon by the respondent in respect of these issues, Re Inchcape (Earl of); Craigmyle v Inchcape, the Chancery Division Judge was dealing with an accidental omission by counsel to seek an order for costs. Morton J held that, notwithstanding that the orders had been entered, he had power to revisit the matter under the relevant slip rule and deal with the question of costs (at 399). There is no suggestion in the present case that there was any accidental omission in anything that the applicants did in respect of the 2010 Costs Orders. 3. In the second case relied upon by the respondent, Sakr v Mercantile Mutual Insurance (Australia) Limited, the Court of Appeal was dealing with the application of the slip rule in respect of an amendment to a District Court Order. 4. In her written submissions the respondent also relied upon Shedden v Patrick (1854) 1 Macq 535, HL, 590 at 599 where Lord Brougham said that the "judgment of this House affirming that below, makes the judgment below a judgment of this House". Reference was made in that case to the principle that a judgment in a Superior Court shall not be impeached in a lower one (at 601). 5. The respondent also relied upon Wishart v Fraser [1941] HCA 8; (1941) 64 CLR 470 in support of the proposition that the applicants are barred from bringing the present applications by reason of the High Court's dismissal of their appeals. Wishart v Fraser was a case in which a solicitor had been convicted in the Court of Petty Sessions of an offence under the National Security Act 1939-1940 and the associated Regulation of endeavouring to cause disaffection among members of the Second Australian Imperial Forces. The solicitor appealed to the Court of Quarter Sessions. The Chairman of Quarter Sessions dismissed the appeal and confirmed the conviction and sentence of imprisonment with hard labour for a term of six months. The Chairman of Quarter Sessions also refused to exercise his discretion under s 5B of the Criminal Appeal Act 1912 to submit a question or questions of law to the Court of Criminal Appeal for determination. The solicitor then obtained a rule nisi for a writ of prohibition before a single judge of the High Court which was made returnable before the Full Court. The High Court discharged the rule nisi. 6. The procedural intricacies of the existence of the order in the Court of Quarter Sessions were analysed by Dixon J (at 480-482) and resolved by the solicitor making application for special leave to appeal from the decision of the Court of Quarter Sessions exercising Federal jurisdiction (at 483). Special leave was refused. In discussing the status of the decision of the Court of Quarter Sessions Rich ACJ said at 477: If this court were to deal with the conviction by the magistrate and quash it, the extraordinary result would follow of two orders in existence at the same time – the order of this Court and that of Quarter Sessions. 1. Dixon J said at 482: If this Court made an order setting aside the conviction, there would be two inconsistent judicial orders in operation at the same time, that of the Court of Quarter Sessions confirming the conviction and that of this court discharging it. 1. In Thiess Pty Ltd and Hochtief AG v Industrial Court of New South Wales [2010] NSWCA 252; (2010) 78 NSWLR 94 Basten JA observed, at 110 [83], that Wishart v Fraser "dealt with the old quarter sessions appeals from convictions in petty sessions, being hearings, de novo" with the consequence that the District Court decision left no decision of the Court of Petty Sessions to be reviewed. 2. The respondent also relied upon R v Marks; Ex parte Australian Building Construction Employees and Builders Labourers' Federation [1981] HCA 33; (1981) 147 CLR 471. In that case the applicant had failed to join as respondents to his application members of the Full Bench of the Australian Conciliation and Arbitration Commission that had dismissed the appeal from the relevant decision of the Deputy President, Marks J. Mason J said at 476 (footnotes omitted): Mr Ryan for the applicant sought to justify the course which had been adopted by submitting that if the challenge to the decision of Marks J. succeeded on the footing that it was void, the confirmation of that decision by the Full Bench would have no operative effect. This submission does not meet the point that the Full Bench decision is conclusive while it stands. In Wishart v Fraser, it was held that an appeal as of right to the High Court from a decision of a magistrate exercising federal jurisdiction could not be maintained after it had been confirmed by a Court of Quarter Sessions. 1. Although not referred to by any of the parties, this Court addressed this issue in Forge & Ors v Australian Securities & Investments Commission [No 2] [2007] NSWCA 42; (2007) 69 NSWLR 575 where the Court (Santow and McColl JJA and Handley AJA) said at 576 [3]: Although the High Court dismissed the appeal from the judgment of this Court, the operative decision is now that of the High Court which has replaced the decision of this Court for all purposes. The orders of the High Court are now the source of any res judicata estoppels: Wishart v Fraser (1941) 64 CLR 470; R v Marks; Ex parte Australian Building Construction Employees and Builders Labourers' Federation (1981) 147 CLR 471 at 476. 1. There is nothing in the applicants' contentions in their written submissions in the High Court relating to the 2010 Costs Orders. However under the heading "Orders sought" at the end of the submissions there is the order that the respondent pay the applicants' costs of the 2010 Appeal. The transcript of the argument before the High Court is not in evidence and it is not known whether this was a consequential order on the basis of a successful challenge to this Court's judgment or whether there was some argument on the particular orders. 2. In any event once the applicants sought that different order in the High Court they put in issue the 2010 Costs Orders of this Court. The High Court dismissed the applicants' appeals with costs. Thus the High Court affirmed this Court's judgment including the 2010 Costs Orders. Although it was not the subject of evidence it appears that the orders entered by the High Court did not expressly include the 2010 Costs Orders as the orders of the High Court. If in place of this Court's judgment in the 2010 Appeal including the 2010 Costs Orders the operative decision is now a judgment of the High Court, these applications must be dismissed. 3. As this is the outcome that I propose in any event, it is not necessary to consider these issues further. An additional reason not to consider the matter further is that these issues were not fully argued on the applications. I will consider the balance of the applicants' contentions on the assumption that they are entitled to bring these applications in this Court. 4. The applicants submitted that notwithstanding the fact that it is now close to five years since the 2010 Costs Orders were made, the justice of the case requires the exercise of this Court's discretion to prohibit the respondent from enforcing the Orders. The applicants emphasised the respondent's failure to give evidence at the re-trial and contended that the outcome of the re-trial was consistent with their Notices of Contention in the 2010 Appeal. 5. It is not correct to align the result in the re-trial with the matters in the applicants' Notices of Contention. The basis upon which the re-trial judge concluded that there was malice included the new particulars of malice that were not pleaded in the Further Amended Replies until two years after the 2010 Costs Orders were made. 6. When the re-trial judge delivered his judgment in the applicants' favour on 19 April 2013 in which malice was found to have defeated the defence of qualified privilege, they knew that they had been successful. They did not take any steps to communicate with the respondent their desire to either vary or set aside the 2010 Costs Orders. That did not occur until approximately one year and five months later when the applicants' solicitor wrote to the respondent's solicitor by letter of 1 September 2014 giving notice that they had been instructed to make the application. In the meantime the following had occurred: 1. The parties had proceeded with the litigation on the premise that the 2010 Costs Orders were in place. 2. The respondent made the November 2010 offer of settlement. 3. The re-trial judge heard submissions on costs of the litigation (on 27 June 2013) and determined those issues (on 3 September 2013) excluding the 2010 Costs Orders. 4. On 4 October 2013 the respondent filed and served a Notice of Intention to Appeal and gave consideration to and took advice upon whether to proceed with an appeal. 5. The respondent understood that she had the "indemnity" of the 2010 Costs Orders, in making the decision not to proceed with an appeal. 1. The applicants submitted that although their failure to make an application under UCPR 36.16 to vary the 2010 Costs Orders is a factor for consideration in the exercise of this Court's discretion on the applications, it is not a powerful one. 2. The applicants submitted that in 2010 they could not have supported any application for the variation of the 2010 Costs Orders until the result of the re-trial was known. However, the very fact that they could not seek a variation of the order on that basis could itself have supported a submission that it would be reasonable to make an application for an order that costs be reserved and/or abide the outcome of the re-trial. 3. I agree with the applicants' submissions that notwithstanding the failure to make such an application, the Court may still make an order under s 135 of the CPA. However much will depend upon the particular circumstances of the case. In this instance the delay in bringing this application is quite extraordinary. Even assuming that the applicants might be excused for not bringing the application until the outcome of the re-trial was known, there is no proper explanation for the delay between April 2013 and 1 September 2014 for communicating to the respondent the intention to bring the application. 4. The applicants relied upon the delay in the provision of the re-trial judge's costs judgment as part of their explanation for their delay in bringing the application. This is a difficult submission for the applicants having regard to the reminder given to them on 30 October 2012 by former President Allsop in his judgment (with the agreement of McColl JA) dismissing the respondent's application for leave to appeal from the re-trial judge's judgment allowing the further amendment to the applicants' Replies. The President referred to his previous statement in Kounnas v Citywide Civil Engineering Pty Ltd [2012] NSWCA 287 at [14]-[16] as follows ([2012] NSWCA 364 at [5]): [14] … The delay from time to time of transcripts is well known. That is not in any way a criticism of the transcript service. Lawyers, including solicitors, have a responsibility to take a proper note of proceedings. Such a note should have been taken and there is no evidence that it was not taken. If there is any confusion or lack of clarity about any aspect of the matter, the solicitors should consult with each other about a correct and accurate record to allow a prompt decision to be made as to whether or not to take a step under the Civil Procedure Act 2005 (NSW). [15] It is simply not satisfactory for cases to be held up in the District Court for ten months while everyone waits for an overburdened court reporting service to prepare transcripts and then take three months after their delivery [to take steps]. Practitioners are required to keep notes of the essentials of what occurs in Court. This includes, in particular, the terms of judgments and the elements of arguments put to judicial officers. [16] Assuming that was done, there is simply no reason to conclude that the matter could not have been brought on timeously. If those notes were not taken, they should have been and there should be, in those circumstances, no ground to complain about refusal of an application where delay on that ground has occurred. 1. The President's remarks are apt. There is no suggestion there was any delay in the provision of the re-trial judgment in which liability was established. That was delivered on 19 April 2013. There is no justifiable basis for the applicants waiting another year and five months after that judgment or another year after the costs judgment was delivered before advising the respondent of the intention to bring the present application. 2. The respondent claims that she is prejudiced by the delay. The applicants accepted that there is presumptive prejudice but submitted that there is no evidence of material prejudice (tr 12). Although the respondent's solicitor gave affidavit evidence annexing the various documents to which reference has already been made, there is no evidence given by him of any decision that had been made in reliance upon the existence and/or enforceability of the 2010 Costs Orders. 3. Counsel for the respondent, Mr Lewis, provided written submissions in which the following was said (at [4.18] – [4.19]): After the Malice Judgment was delivered the Respondent inevitably had to consider whether a further appeal was proportionate. The overall costs position of the parties was crucial to that decision making process. … Had the Applicants openly communicated their intention to 'permanently stay' the 2010 Costs Order, Mrs Dillon may well have filed a Notice of Appeal within time. 1. There is no evidence to support the propositions in these written submissions. However common sense suggests that the overall costs position would be crucial to decision making in respect of the finalisation of this litigation. However what the respondent may or may not have done if the applicants had communicated the intention to make the application earlier is not the subject of any evidence. 2. The applicants could have brought the application on a number of specific occasions. They could have done so pursuant to UCPR 36.16 within fourteen days of the entry of the orders in August 2010. They could have done so explicitly in the High Court in 2011 by seeking an order that the costs of the 2010 Appeal be reserved or abide the outcome of the re-trial rather than, or alternatively to, the order that the respondent pay their costs of the 2010 Appeal. They certainly could have sought some agreement from the respondent at any stage of the litigation prior to the re-trial judge giving his costs judgment in September 2013. They could have done so in April 2013 after the re-trial judgment on liability was delivered. They could have done so at any time in the year from September 2013 after the costs judgment was given. 3. The respondent submitted that the applicants were waiting for time to expire on her Notice of Intention to Appeal before they notified her of the intention to bring the application. It was submitted that this was inexcusable delay and contrary to the duty to assist the Court to further the overriding purpose of the CPA. It was submitted that the applicants had a duty to act earlier and to communicate their intentions to the respondent promptly: Kelly v Mina [2014] NSWCA 9 per Barrett JA at [48]. 4. The respondent also submitted that the application cannot be seen as anything other than an ambush or a surprise. There is no doubt that the modern way of litigating matters in all Courts is inconsistent with such a concept: Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 per Allsop P at [160]-[161]. 5. It was submitted that the applicants' explanations for the delay in communicating their intention to make the application and indeed filing it promptly were grossly inadequate. I agree. 6. There is no proper explanation for the applicants' delay of five years in bringing this application. I do not accept that the uncertainty as to the outcome of the re-trial was an impediment to them seeking to bring an application under either UCPR 36.16 or s 135 of the CPA. 7. I am satisfied that justice dictates that these applications should be dismissed. Orders 1. Having regard to the costs that have been incurred by the parties in this litigation, I do not regard it as appropriate to require the imposition of further expense by the requirement to file a Summons seeking the relief that is sought in the Notices of Motion. 2. The orders that I propose are: 1. In matter 2009/298338 the Notice of Motion is dismissed, with costs; 2. In matter 2009/298211 the Amended Notice of Motion is dismissed, with costs. ********** Endnotes 1. Dillon v Cush; Dillon v Boland [2010] NSWCA 165. 2. Cush v Dillon; Boland v Dillon [2011] HCA 30; (2011) 243 CLR 298. 3. Cush v Dillon (at [31]). 4. Cush v Dillon; Boland v Dillon (District Court (NSW), Charteris DCJ, 19 April 2013, unrep, at [8]). 5. Handley: Res Judicata (4th ed, 2009) LexisNexis, London (at [2.33]). 6. Thiess Pty Ltd v Industrial Court of New South Wales [2010] NSWCA 252; (2010) 78 NSWLR 94 (at [74]) per Spigelman CJ (Beazley JA agreeing). 7. Forge & Ors v Australian Securities & Investments Commission [No 2] [2007] NSWCA 42; (2007) 69 NSWLR 575 (at [3]). 8. Wishart v Fraser [1941] HCA 8; (1941) 64 CLR 470 (at 478) per Starke J; see also (at 482 – 483) per Dixon J; R v Marks; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation [1981] HCA 33; (1981) 147 CLR 471 (at 476) per Mason J. 9. Cf CPA, s 135(2)(c). 10. Cf Forge (at [5]). DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 July 2015