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The orders had not yet been authenticated when, on 9 September 2010, Westpac filed a summons seeking their variation. Amended versions followed on 16 and 24 September 2010. Westpac asked the Court to order that it pay only some of Mr Aktas's costs up to 4 June 2007 and that Mr Aktas pay Westpac's costs thereafter. The carve-out related to Mr Aktas's abandoned special damages claim, which had been abandoned on 20 April 2007 shortly before trial; Fullerton J had reserved the costs of the interlocutory argument about that abandonment. In the alternative Westpac sought remission of all costs questions (other than the High Court costs) to the Court of Appeal.

The foundation for Westpac's application was a without-prejudice-save-as-to-costs offer made on 4 June 2007. On that day Westpac offered Mr Aktas and Homewise, jointly, $620,000 plus costs on condition that an apology be published and the settlement terms remain confidential. The offer was not accepted. Westpac pointed out that the total ultimately recovered by both plaintiffs was less than the amount offered. Mr Aktas had sought full costs in his notice of appeal and written submissions. Westpac made no submissions to the contrary during the hearing of the appeal and did not foreshadow any application for special costs orders until five weeks after judgment.

The Court heard the variation application on its papers and delivered judgment on 15 December 2010. By majority (French CJ, Gummow and Hayne JJ, with Heydon J agreeing in the result and Kiefel J not participating on the variation), the further amended summons was dismissed with costs. The majority held that Westpac had had ample opportunity to raise the point before judgment and that the public interest in finality precluded variation. Heydon J wrote separately, observing that the majority reasoning constituted a binding precedent that a defendant must foreshadow any intended special costs application before judgment, but he found it unnecessary to express agreement or disagreement with that proposition. Kiefel J declined to participate because she had not joined in the original costs orders.

Why the court decided this way

The majority began from the undisputed proposition that the Court retains power to recall orders not yet authenticated. The real question was whether that power should be exercised. At paragraph [5] the joint judgment adopted Mason CJ's statement in Autodesk Inc v Dyason [No 2] that the jurisdiction is not limited to cases of accidental non-hearing but "is, however, to be exercised with great caution, having regard to the importance of the public interest in the finality of litigation." That caution was decisive.

Westpac had received explicit notice, both in Mr Aktas's notice of appeal and in his written submissions, that he sought costs of the trial, the Court of Appeal and the High Court if successful. Westpac filed written submissions and appeared at the oral hearing yet said nothing about the 4 June 2007 offer or about any desire to be heard on special costs orders should the appeal succeed. The abandonment of the special damages claim had occurred years earlier and its costs had been reserved by the trial judge; nothing prevented Westpac from drawing the High Court's attention to those matters before the 4 August 2010 orders were pronounced.

The joint judgment therefore concluded at [6] that any misapprehension on which the original costs orders were framed was "to be attributed solely to Westpac's not having raised those facts earlier, or at least foreshadowed the need to consider further facts before costs orders were made." Because the failure lay entirely with Westpac, the orders should not be disturbed. The further amended summons was dismissed with costs.

Heydon J's separate reasons at [8]–[13] are directed to the practical forensic choices facing a defendant who holds a without-prejudice offer. He outlined three possible courses: attending to take judgment and immediately seeking suspension of any costs order; disclosing the offer before substantive judgment (which would destroy its without-prejudice character); or foreshadowing a later application without disclosure. The majority's reasoning, he said, treated the third course as compulsory in this Court. Because that proposition was not essential to his own concurrence in the result, he treated it as unnecessary to examine its merits. His Honour's analysis underscores the majority's emphasis on timely disclosure or foreshadowing but does not alter the binding outcome.

Kiefel J's brief note at [13] simply records that, having dissented on the original orders, she did not consider it appropriate to participate in their variation. The disposition therefore rests on the joint judgment's application of the Autodesk caution to the undisputed chronology.

Before and after state of the law

Before Aktas v Westpac [No 2] the law was settled that a court may recall orders before they are perfected. Autodesk Inc v Dyason [No 2] (cited at [5]) established that the jurisdiction is not confined to cases of accidental non-hearing. Wentworth v Woollahra Municipal Council and State Rail Authority of NSW v Codelfa Construction Pty Ltd (both cited at [5]) reinforced that the power, though available, is to be exercised sparingly because of the public interest in finality. Trial and intermediate appellate courts routinely dealt with applications to vary costs orders after delivery of reasons but before entry of judgment, often by having counsel attend to "take judgment".

The present decision did not change the existence of the power. It did, however, sharpen its practical boundaries in the High Court. After Aktas a party who wishes to rely on a Calderbank or without-prejudice-save-as-to-costs offer to seek a special costs order must at minimum foreshadow, before judgment is delivered, that such an application will be made if the substantive result permits it. Silence in the face of an opponent's explicit claim for full costs will ordinarily be fatal to any later variation application. The decision confirms that the onus is on the party holding the offer to bring the relevant chronology to the Court's attention or to flag the need for a separate costs argument. It also confirms that the mere fact an offer was more generous than the ultimate recovery does not, without more, justify reopening after the Court has spoken.

The judgment leaves untouched the position in inferior courts where attendance to take judgment remains common. It does, however, signal that the High Court will not readily infer that counsel's silence on costs should be understood as reserving a right to reopen. Finality, once judgment is pronounced, carries heavy weight.

Key passages with plain-English translation

The joint judgment's core statement appears at [5]:

"As Mason CJ rightly said in Autodesk Inc v Dyason [No 2], the exercise of the jurisdiction to reopen a judgment and to grant a rehearing 'is not confined to circumstances in which the applicant can show that, by accident and without fault on the applicant's part, he or she has not been heard'. The jurisdiction is, however, to be exercised with great caution, having regard to the importance of the public interest in the finality of litigation."

In plain English: the Court can reopen a decision before it is sealed even if the applicant was at fault, but it will only do so reluctantly because once a case is decided the community needs it to stay decided.

At [6] the majority applies that principle to the facts:

"Westpac had ample opportunity to foreshadow that, if the appeal succeeded, it wished to be heard in support of an application for special costs orders of the kind it now seeks. Westpac had clear notice of the costs orders Mr Aktas sought if his appeal were allowed. If, in framing the orders pronounced on 4 August 2010, the Court proceeded on some misapprehension of the facts, the misapprehension is to be attributed solely to Westpac's not having raised those facts earlier, or at least foreshadowed the need to consider further facts before costs orders were made. The orders pronounced on 4 August 2010 should not now be varied."

Plain-English translation: you knew what Mr Aktas was asking for, you said nothing about your settlement offer or the abandoned damages claim, so any mistake the Court made about costs is your fault. We will not reopen the case just because you stayed silent.

Heydon J's observations at [9]–[10] on the practicalities of taking judgment are also significant:

"The attendance of legal representatives to take judgment in this Court, not uncommon a couple of decades ago, is now very rare. If it were revived in this Court to the extent of attendance not by a Canberra agent but by legal representatives familiar with the litigation, the revival would increase costs to a significant extent."

"Plainly there is much to be said for the view that a second possible course – disclosing the documents which, the defendant submits, support a special order as to costs before the court decides whether the plaintiff should succeed on substantive issues – should not be adopted. To adopt that course would deprive the documents of their without prejudice character."

These passages acknowledge the tension between efficient finalisation of orders and the need to preserve the confidential character of settlement negotiations. They translate to a recognition that old practices of counsel attending to take judgment have fallen away in the High Court for cost reasons, yet some mechanism is still required to surface costs arguments without destroying the protection of without-prejudice material.

What fact patterns trigger this precedent

Aktas v Westpac [No 2] is triggered whenever a party seeks to vary costs orders after delivery of judgment but before authentication on the basis of material that could have been raised or foreshadowed earlier. Typical triggers include:

• A defendant holds a without-prejudice-save-as-to-costs offer that exceeds the plaintiff's ultimate recovery but has not drawn the offer to the appellate court's attention before judgment.
• The plaintiff has explicitly claimed full costs in the notice of appeal or submissions and the defendant has remained silent.
• An interlocutory event such as abandonment of a head of damage has occurred at trial with costs reserved, yet that history is not mentioned to the appellate court before it makes blanket costs orders.
• The application to vary is made weeks after judgment, as occurred here (five weeks elapsed between 4 August and 9 September 2010).

The precedent does not apply where the omitted matter could not reasonably have been foreseen, where the Court itself has invited further submissions on costs, or where the party seeking variation can show that the failure to raise the point was accidental and without fault in the Autodesk sense. Because the High Court treated the duty to foreshadow as compulsory, the precedent is engaged in any High Court matter where a Calderbank or equivalent offer exists and the party holding it wishes to rely on it for costs. In lower courts the same principles apply with even greater force where counsel routinely attend to take judgment.

How later courts have treated it

The decision has been treated as confirming the narrow circumstances in which the Autodesk power will be exercised. Subsequent authority has cited the joint judgment's insistence at [5]–[6] that the public interest in finality prevails where a party has had clear notice and an adequate opportunity to speak. The proposition that a defendant must at least foreshadow an intended special costs application before judgment (the binding effect identified by Heydon J at [12]) has been accepted as settled doctrine in this Court. Courts have continued to distinguish cases in which the omitted material could not reasonably have been raised earlier, thereby preserving the flexibility recognised in Wentworth and Codelfa (both cited at [5]).

The emphasis on attributing any misapprehension to the defaulting party's silence has been applied to refuse variation in analogous post-judgment costs disputes. The separate reasons of Heydon J are routinely noted for their forensic taxonomy of the three possible courses open to a defendant holding a protected offer, even though his Honour declined to endorse or reject the majority's conclusion that foreshadowing is compulsory. Kiefel J's non-participation has been understood as confirming that a judge who dissented on the original orders should not ordinarily sit on a variation application. Overall the decision has reinforced, rather than altered, the cautious approach mapped out in the authorities cited at paragraph [5].

Still-open questions

Several questions remain unresolved by the reasons. Heydon J expressly left untouched the merits of the "third course" – foreshadowing a later application without disclosing the protected documents. The majority did not need to decide whether such foreshadowing must be explicit or whether a general reservation of costs rights would suffice. The judgment does not address the position where the offer is made after the hearing but before judgment, nor the situation in which the trial judge has expressly reserved costs and the appellate court is aware of that reservation.

The practical mechanics of foreshadowing in the High Court, where attendance to take judgment is now rare, are left for future cases. Whether a letter sent to the Court after hearing but before delivery of reasons would be sufficient, or whether the matter must be raised orally at the hearing itself, is not settled. The weight to be given to the abandonment of a discrete head of claim (here the special damages claim abandoned on 20 April 2007) when the trial judge has reserved those costs also remains open; the joint judgment simply notes the fact without prescribing how such reservations should be handled on appeal.

Finally, the decision does not explore the interaction between the principle it lays down and the ordinary discretion as to costs under the applicable court rules. Whether a court could, of its own motion, invite submissions on costs where it suspects an unmentioned offer exists is untouched. These gaps mean that while Aktas v Westpac [No 2] has clarified the default position, experienced practitioners must still advise clients that the safest course is to raise the existence of any special costs argument, at least in general terms, before the court pronounces orders.