Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Optus Administration Pty Limited v Glenn Wright by his tutor James Stuart Wright (No 2) [2017] NSWCA 154 Hearing dates: On the papers Decision date: 23 June 2017 Before: Basten JA at [1]; Hoeben JA at [2]; Gleeson JA at [3] Decision: (1) Judgment for the appellant against the second respondent for $94,431.03 with effect from 24 May 2017. (2) Each party to pay its costs of the motion of 9 March 2017. Catchwords: RESTITUTION – other matters – recovery of money paid under judgment or order – where money paid by appellant pursuant to declaration by primary judge that appellant must indemnify second respondent under Workers Compensation Act 1987 (NSW), s 151Z(1)(d) – where declaration is set aside on appeal – where restitution not sought in notice of appeal or at the hearing – whether appropriate to deny interest in the present case. PROCEDURE – where appellant seeks a further order for restitution of moneys paid under a declaration which is set aside on appeal – where appellant failed to claim restitution in the notice of appeal or at the hearing of the appeal – where omission to claim restitution was an oversight by the appellant's lawyers – Uniform Civil Procedure Rules 2005 (NSW), r 51.19. COSTS – restitution and interest on moneys paid under a judgment later set aside – where relief not sought in notice of appeal or at the hearing – appropriate order for costs of later application for restitution – where appellant seeks an indulgence and respondent to motion had no basis to oppose the making of an order for restitution. Legislation Cited: Civil Procedure Act 2005 (NSW), s 56 Supreme Court Act 1970 (NSW), s 75A(10) Uniform Civil Procedure Rules 2005 (NSW), rr 36.7(1), 42.1, 51.19, 51.54 Workers Compensation Act 1987 (NSW), s 151Z(1)(d) Cases Cited: Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd (No 2) [2016] NSWCA 149 Boral Limited v Foley & Bear Pty Ltd t/as J&R Industries (No 2) [2017] NSWCA 108 Cai v Zheng (No 2) [2009] NSWCA 317 Heydon v NRMA Ltd (No 2) (2001) 53 NSWLR 600; [2001] NSWCA 445 Optus Administration Pty Limited v Glenn Wright by his tutor James Stuart Wright [2017] NSWCA 21 Perisher Blue Pty Ltd v Vidakovic (No 2) [2006] NSWCA 326 Production Spray Painting & Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659 TCN Channel 9 Pty Ltd v Antoniadis (No 2) (1999) 48 NSWLR 381; [1999] NSWCA 104 Woolworths Limited v Strong (No 2) (2011) 80 NSWLR 445; [2011] NSWCA 72 Category: Procedural and other rulings Parties: Optus Administration Pty Limited (Appellant) Glenn Wright by his tutor James Stuart Wright (First Respondent) IPA Personnel Pty Limited (Second Respondent) Representation: Counsel: GM Watson SC / DF Villa (Appellant) L Morgan (Second Respondent) Solicitors: Hunt and Hunt Lawyers (Appellant) Sparke Helmore (Second Respondent) File Number(s): 2015/115083 Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Citation: Wright by his tutor Wright v Optus Administration Pty Limited [2015] NSWSC 160 Date of Decision: 20 March 2015 Before: Campbell J File Number(s): 2009/297493 [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.] Judgment 1. BASTEN JA: I agree with Gleeson JA. 2. HOEBEN JA: I agree with Gleeson JA. 3. GLEESON JA: On 17 February 2017, this Court delivered judgment allowing (by majority) the appeal by Optus Administration Pty Ltd (Optus) and setting aside the orders of the primary judge (other than certain orders made on 6 March 2015, which are of no present relevance). Consequential orders were made including, giving judgment for Optus against the plaintiff (Mr Wright) and dismissing the cross-claims between Optus and IPA Personnel Pty Ltd (IPA) and Drake Australia Pty Ltd: Optus Administration Pty Limited v Glenn Wright by his tutor James Stuart Wright [2017] NSWCA 21. IPA was Mr Wright's employer at the time he suffered the attack. 4. The effect of the orders of this Court is that Optus is not liable in damages to Mr Wright for his injuries and IPA is not entitled to be indemnified by Optus in respect of compensation payments made by IPA to Mr Wright: see s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) (the WC Act). 5. On 9 March 2017, Optus filed a notice of motion seeking an order for the payment by IPA of the sum of $776,706.47 (the principal sum) and interest in an amount of $83,833.40 calculated up to 9 March 2017 and continuing to the date of repayment of the principal sum. Optus had paid the principal sum to IPA on 29 April 2015 pursuant to the declaration made by the primary judge under s 151Z(1)(d) of the WC Act that Optus was bound to indemnify IPA in respect of compensation payments made to Mr Wright by IPA. That declaration was set aside by the orders made by this Court on 17 February 2017. 6. On 17 March 2017, Mr Wright filed an application for special leave to appeal to the High Court. IPA has not sought special leave to appeal in respect of the orders of this Court setting aside the orders of the primary judge as between Optus and IPA, and dismissing the cross-claims between Optus and IPA. 7. Following the filing of the motion, IPA made payment of $776,706.41 to Optus on 24 May 2017 and the remaining six cents were paid on 26 May 2017. In written submissions filed 26 May 2017, IPA acknowledged that Optus's right to restitution was not disputed. 8. The remaining issues on the motion are: (a) whether Optus is entitled to interest on the principal sum and (b) costs. Interest on restitution of moneys paid The parties' submissions 1. IPA accepted that interest is potentially payable on the restitution of moneys paid under a judgment that is later set aside, but submitted that as a matter of discretion, the Court should decline to order interest in the present case. 2. IPA characterised Optus's demand for restitution and payment of interest as "unreasonable in the circumstances" where: 8.1 [Optus] was aware the application for special leave before the High Court was on foot and rejected the respondent's suggestion to await the outcome of the appeal; 8.2 If [Optus] had agreed to delaying restitution [the principal sum] would have accrued interest [if the appeal was unsuccessful] while the appeal progressed [1] ; 8.3 [IPA] had not, to date, sought satisfaction of a costs order in its favour; 8.4 [IPA] has continued to make compensation payments to the plaintiff given the stay of the plaintiff's verdict and as a consequence has, despite the declaration at first instance, been 'out of pocket' with respect to compensation payments made over the last 24 months; 8.5 [Optus], despite having filed an appeal, did not seek a stay with respect to indemnifying [IPA] at first instance; 8.6 In the event of a successful appeal, further interest would be potentially payable pursuant to the operation of ss.100 & 101 of the Civil Procedure Act 2005 with respect to the principal and workers compensation payments made by [IPA] in addition to the principal and on any interest payment. 1. Alternatively if interest is payable, IPA provided a calculation of the amount of interest up to 24 May 2017 in the sum of $94,010.73. IPA also submitted that any order for payment of interest should be stayed pending the outcome of Mr Wright's application for special leave to appeal to the High Court. 2. Optus submitted that it is entitled as of right to restitution of moneys paid to IPA. Reference was made to a number of cases including: Production Spray Painting & Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659 at 662 (Handley JA); TCN Channel 9 Pty Ltd v Antoniadis (No 2) (1999) 48 NSWLR 381; [1999] NSWCA 104 at [3]-[4]; Woolworths Limited v Strong (No 2) (2011) 80 NSWLR 445; [2011] NSWCA 72 at [33] (Campbell JA); and Perisher Blue Pty Ltd v Vidakovic (No 2) [2006] NSWCA 326 at [8]. 3. Optus further submitted that the right to "restitution" is a right to repayment of the principal, together with the interest necessary to place Optus in the position it would have been in had the principal amount not been paid to IPA. Optus provided a calculation of interest up to 24 May 2017 of $94,431.03. 4. Optus submitted that none of the matters relied upon by IPA (as set out at [10] above) were relevant or sufficient to deny Optus interest on the moneys paid to IPA, nor should the Court order a stay of any order for the payment of interest. Decision 1. The Court's power to order restitution of moneys paid under a judgment which is later set aside is contained in s 75A(10) of the Supreme Court Act 1970 and is supplemented by the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 51.54. 2. Section 75A(10) provides: The Court may make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made or which the nature of the case requires. 1. UCPR, r 51.54 provides: If any step has been taken for the enforcement of a judgment or order that the Court varies or sets aside, the Court may make such orders for reinstatement or restitution as it thinks fit. Note: Rule 51.19 provides for how claims for an order for reinstatement or restitution are to be made in appeals and cross-appeals. 1. UCPR, r 51.19 is also relevant. That rule provides that an appellant or cross-appellant who seeks an order for reinstatement or restitution must include in the notice of appeal or notice of cross-appeal: (a) a claim for the order and the form of the order; and (b) where restitution is sought – any claim for interest that is at a rate other than the relevant rate set out in r 36.7(1). Procedural matters 1. Here the moneys were paid by Optus to IPA prior to the filing of the notice of appeal by Optus on 17 April 2015. Nonetheless, Optus accepted that the notice of appeal could have subsequently been amended, once the payment by Optus to IPA had been made on 29 April 2015. 2. Optus submitted that the failure to comply with UCPR, r 51.19 does not deprive it of its entitlement through restitution of moneys paid under a judgment that is later set aside. That may be accepted. As explained in Cai v Zheng (No 2) [2009] NSWCA 317 at [28] (Basten JA, Giles JA and Hoeben J agreeing), the power to waive compliance with the rules, either in whole or in part, and to grant relief which is appropriate in the circumstances of the case, without procedural unfairness to the other party, is the guiding principle by which the Court operates in all circumstances. This is the principle expressed in s 56 of the Civil Procedure Act 2005 (NSW). 3. IPA did not assert any unfairness or prejudice arising from the omission by Optus to claim restitution including interest in its notice of appeal. That is unsurprising. It can be inferred that the workers compensation insurer standing behind IPA is a sophisticated litigant and would have understood that an order for repayment would necessarily attract a requirement to pay interest even though no claim for restitution had been made in the notice of appeal. Power to order restitution of moneys paid together with interest 1. It is well established that when a judgment that has been paid in whole or in part is reversed on appeal, the appellant is entitled as of right to restitution of the sum paid, with interest: Woolworths Ltd v Strong (No 2) at [25] (where the authorities are cited). 2. Optus submitted that the relevant statutory provisions should be construed as conferring a power to order restitution, not a discretion to refuse it, referring to Perisher Blue Pty Ltd v Vidakovic at [8]; and Boral Limited v Foley & Bear Pty Ltd t/as J&R Industries (No 2) [2017] NSWCA 108 at [15]. That may be accepted, however as IPA pointed out, this Court observed in Cai v Zheng (No 2) at [32]: It is open to the Court to deny an appellant interest in appropriate circumstances. There is always a danger in seeking to identify guiding principles, to which a court will usually adhere, by stating a practice subject to an exception arising in "special circumstances". Rather, the question is whether, in all the circumstances of a particular case, it is appropriate to award interest on an order for repayment of an amount of a judgment, paid in part as a condition of a stay. 1. The above statement in Cai v Zheng (No 2) attracted comment in Woolworths Ltd v Strong (No 2) at [28]-[29] where Campbell JA (Handley JA and Harrison J agreeing) observed that there may be room for argument about whether that statement is consistent with other statements by this Court in Heydon v NRMA Ltd (No 2) (2001) 53 NSWLR 600; [2001] NSWCA 445 at [30]-[31] (Mason P) and Antoniadis (No 2) at [5]-[8] (Handley, Beazley and Stein JJA). For my part, any suggested inconsistency is overstated. 2. The statement in Cai v Zheng (No 2) at [32] was made in the context of a finding of prejudice to the respondent arising from the failure of the appellant to seek an order for repayment of the money, or an order for interest on the amount outstanding, in the notice of appeal. After observing at [33] concerning the position of the respondent: Accepting that, properly advised, she should have been alert to the fact that repayment might be required, it is not so clear that she would have been advised that an order for repayment would necessarily attract a requirement to pay interest when none was claimed. 1. Basten JA concluded that interest on the moneys paid by the appellant (as a condition of a stay of the judgment at first instance pending the appeal), should run from the date of the filing of the notice of motion to amend the notice of appeal to include the claim for interest. 2. Moulding relief by way of restitution to limit interest in an appropriate case is not inconsistent with the statements of this Court that the statutory provisions should be construed as a power to order restitution, not a discretion to refuse it. As Campbell JA acknowledged in Woolworths v Strong (No 2) at [28], this Court in Antoniadis (No 2) at [8] left some room for discretion to affect some aspects of the granting of restitution following reversal of a paid judgment. 3. The question of interest by way of restitution remains one of whether it is appropriate to order payment of interest, and over what period, taking into account all of the circumstances of the particular case. 4. Having considered the various circumstances relied upon by IPA, I do not consider that it is appropriate to deny interest in the present case. My reasons generally accord with those advanced by Optus in its written submissions. 5. First and importantly, IPA ultimately conceded Optus' right to restitution of the principal sum, which was paid over 2 months after the filing of Optus's notice of motion. IPA also effectively acknowledged in its written submissions (par 8.2), Optus's entitlement to interest on the principal sum. In light of those matters, the characterisation by IPA of Optus's demand for restitution of the principal sum and interest as "unreasonable", cannot be accepted. 6. Second, that IPA had not sought satisfaction of the costs order in its favour at first instance is irrelevant. That order was set aside by this Court and no orders were made on appeal as to the costs with respect to the cross-claims. 7. Third, that IPA has continued to make compensation payments to Mr Wright is also irrelevant having regard to the effect of the orders made by this Court and the absence of any application by IPA for a stay of those orders. 8. Fourth, that Optus did not seek a stay of the primary judge's order with respect to indemnifying IPA is again irrelevant. Optus has been out-of-pocket for the principal sum since 29 April 2015 and IPA has had the benefit of that amount from that date until the sum was repaid on 24 May 2017. Further, it was not suggested and there is no evidence to support the contention, that Optus could have obtained a stay with respect to indemnifying IPA on the ground that IPA did not have the capacity to repay the judgment moneys if the appeal by Optus was successful. 9. Fifth, even if Mr Wright's appeal is successful (assuming a grant of special leave), there is no suggestion that any liability of Optus, whether to Mr Wright or IPA, and whether or not including interest, could not be satisfied by Optus. 10. There should be an award of interest to Optus in the amount of $94,431.03 as calculated by Optus. IPA has not disputed Optus's submission that IPA's calculation of a slightly lesser figure of $94,010.73 contains an error, in effect, as to the number of days in the period 1 July to 31 December each year. The judgment should take effect from 24 May 2017, being the date up to which interest has been calculated. Stay 1. I would decline to order a stay of the order for the payment of interest, pending the outcome of Mr Wright's application for special leave to appeal to the High Court. Contrary to IPA's submissions, a stay would not "quarantine" the principal sum, since the principal has already been repaid by IPA. Nor is there any reason to distinguish between the treatment of the principal sum (which has been now paid by IPA) and interest thereon. Nor, as mentioned above, is there any doubt as to Optus' capacity to pay whatever liability it may be found to have, whether to Mr Wright or IPA, if Mr Wright's appeal is successful, assuming a grant of special leave. Costs of the motion 1. Optus seeks an order for costs of the motion on an indemnity basis. 2. IPA opposes a special costs order and also seeks an order for costs in its favour. Reference was made to the "normal" (or "usual") rule that the applicant for the order for restitution pay the other party's costs of the application because the application is a result of the failure to raise the matter at the hearing of the appeal: Antoniadis (No 2) at [20], citing Production Spray Painting & Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659 at 663. 3. However, as this Court explained in Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd (No 2) [2016] NSWCA 149 at [22]-[25], caution is necessary whenever it is said that there is a "usual rule" as to costs. The question remains one of discretion, subject to UCPR, r 42.1. Orders as to costs depend upon the circumstances of each case. 4. In the present case, there are countervailing factors. Optus omitted to ask for complete relief at the hearing of the appeal. This further application would not have been necessary if Optus had complied with the procedural requirements under the rules relating to notices of appeal: UCPR, r 51.19. Optus seeks an indulgence because of the oversight of its lawyers. However, there was no basis for any opposition to the making of the order with respect to the principal sum (as IPA subsequently acknowledged after the filing of the motion), nor for the reasons given above, with respect to interest thereon. In the circumstances the appropriate order is that each party pay its own costs of the motion. Orders 1. I propose the following orders: 1. Judgment for the appellant against the second respondent for $94,431.03 with effect from 24 May 2017. 2. Each party to pay its own costs of the motion of 9 March 2017. ********** Endnote 1. Text amended from the original 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: 23 June 2017