Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd

Court of Appeal (NSW)|2016-06-27|Before: Beazley P, Bergin CJ

Solicitors: Mark Rahme & Associates (Appellant/Cross-Respondent) Alexander Richards Lawyers (Respondent/Cross-Appellant) File Number(s): 2015/113760 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity Division Citation: Jaswil Properties Pty Ltd ATF Jaswil Unit Trust v Barrak Corporation Pty Ltd [2015] NSWSC 391 Date of Decision: 09 April 2015 Before: Bergin CJ in Eq File Number(s): 2015/69625

[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.]

The conduct of the appeal

During the course of the appeal, a proposed further amended notice of cross-appeal had been prepared seeking orders by way of restitution of the sum of $24,302.72 paid by the cross-appellant to the cross-respondent on settlement of the contract, together with interest on that sum.
The proposed further amended notice of appeal had been provided to the cross-respondent's solicitor the day before the hearing of the appeal and to counsel on the morning of the hearing. In the circumstances, the Court gave counsel time to obtain instructions as to the cross-respondent's position in relation to the proposed further amended notice of cross-appeal. The manner in which this occurred was as follows: "[COUNSEL FOR THE APPELLANT]: In regard to the amended cross appeal, would your Honour excuse me just a moment? BEAZLEY P: Yes. Perhaps just whilst you're getting those instructions, giving your solicitor a bit of time to do that, I will just ascertain [Counsel for the respondent], you strictly have a right of reply on the cross appeal, but I think the way the matter has been done, I don't know whether you have anything to say? … [COUNSEL FOR THE RESPONDENT]: We don't, your Honour. BEAZLEY P: Thank you, all right. Now, I'm just wondering the best way to deal with this. I mean, you have the right to obtain instructions. We could adjourn and give a note, yes. Are you could content to give us a note later this afternoon? [COUNSEL FOR THE APPELLANT]: Yes, certainly, your Honour. BEAZLEY P: If there's an objection we'll work out how to deal with it, I think. We might invite your submissions in writing, something to that effect, all right. [COUNSEL FOR THE RESPONDENT]: Yes, we can do that. BEAZLEY P: Then subject to ascertaining the position on the proposed further amended notice of appeal, the Court reserves its decision in the matter and the Court is adjourned."
The Court did not receive any note from the cross-respondent as to its position in respect of the proposed further amended ground of appeal. The Court did not advert to that question in its reasons or orders.

The cross-appellant's notice of motion

The cross-respondent submitted, in response to the notice of motion, that the Court did not grant leave to file the further amended notice of cross-appeal and that the Court's failure to deal with the cross-appellant's application was due to the cross-appellant's failure to raise the issue until late in the afternoon of the hearing.
Whatever criticism may rightly be levelled at the cross-appellant for raising the matter late in the proceedings, we do not consider that the cross-respondent's submission accurately captures what occurred at the hearing. As the passage of the transcript set out above makes clear, the Court was expecting to be advised by the cross-respondent as to whether or not it consented to leave being granted for the cross-appellant to file the further amended notice of cross-appeal. That advice was not forthcoming.
Nonetheless, the application for leave to file the further amended notice of cross-appeal having been made, it was incumbent upon the Court to deal with it. As the transcript reveals, it was anticipated that the Court would do so as part of its determination of the appeal and cross-appeal. It was an oversight on the part of the Court not to do so.

Entitlement to relief

The notice of motion sought relief pursuant to UCPR, r 36.17, which provides: "If there is … an error arising from an accidental slip or omission, in a judgment or order … the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error."
Before dealing with the question whether UCPR, r 36.17 applies to the circumstances at hand, it is to be observed that there are other provisions under which a judgment or order may be set aside or varied. Relevantly, they include: (1) Where the parties consent to an order or judgment being set aside: UCPR, r 36.16(2). We do not understand the cross-respondent to consent, but in any event, the cross-respondent did not seek that the orders made by the Court be set aside. Rather, it sought that additional orders be made. (2) Before orders are entered: UCPR, r 36.16(1). Orders are taken to be entered, in the absence of an order to the contrary, when they are recorded in the Court's computerised record system: r 36.11(2). Accordingly, the orders in question were entered on 7 March 2016. As the notice of motion was filed on 7 April 2016, UCPR, r 36.16(1) has no application. (3) In the circumstances prescribed by UCPR, r 36.16(2): relevantly, where there has been a default judgment or orders made in the absence of a party. Neither of those conditions apply here. (4) Where a party files a notice of motion within 14 days after the judgment or order is entered: UCPR, r 36.16(3A). The notice of motion in question was filed outside that time period.
Accordingly, the cross-appellant will only be entitled to have its application dealt with if it falls within the purview of the Court's power under r 36.17.
The Court's power to order restitution is to be found in the Supreme Court Act 1970 (NSW), s 75A and UCPR, rr 51.19 and 51.54: see Ambulance Service of NSW v Worley (No 2) [2006] NSWCA 236; 67 NSWLR 791 at [29]-[30]; Cai v Zhang (No 2) [2009] NSWCA 317 at [26]. In TCN Channel 9 v Antoniadis (No 2) [1999] NSWCA 104; 48 NSWLR 381 at [8], this Court held that the equivalent provisions under the Supreme Court Rules "should be construed as conferring a power to order restitution and not a discretion to refuse it".
The position that the Court takes in this matter is that it omitted to deal with the application to file the further amended notice of cross-appeal. Had it done so, the Court would have granted leave to the cross-appellant to file the further amended notice of cross-appeal. As was stated in Production Spray Painting and Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659, "an order for restitution follows as of course from the quashing of the orders [below]". See also Cai v Zhang (No 2) at [24] per Basten JA; Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; 53 NSWLR 600 at [14]. That right is a right to restitution with interest: Heydon v NRMA Ltd (No 2) at [14].
As the authorities make clear, the Court would have been required to make the order for restitution even had the formalities of including the claim in the further amended notice of cross-appeal not been observed.
The omission of the Court to address the proposed further amended notice of cross-appeal, and thereby the issue of restitution of moneys paid by the cross-appellant, is a matter appropriate for correction under the power in r 36.17. The following remarks of McHugh JA in Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 at 452, concerning a provision of the District Court Rules 1973 (NSW), which were in much the same terms as r 36.17, are apt in this regard: "If the proposed variation of an order relates to a matter which was in issue in the proceedings or to something which was incidental to such a matter, the court, in my opinion, has power to amend its order if the need for the variation is the result of an accidental omission or mistake. Matters such as costs or interest on a judgment, for example, are almost always incidentally involved in proceedings, and the court has power to deal with them even though they are not specifically raised at the hearing provided, of course, the omission was accidental."
The cross-respondent did not dispute the amount claimed by the cross-appellant by way of restitution. Rather, the cross-respondent's objection to the orders being made related to the fact that the matter had been remitted to the Equity Division for the hearing of the cross-appellant's claim for damages. The cross-respondent contended that the claim for restitution could be dealt with in the damages claim. The Court does not accept this contention. It is difficult to see that a claim for restitution such as is made here could properly be said to be part of the damages claim arising from the cross-respondent's wrongful termination of the contract. Rather, the claim for restitution arises out of a court order, being the order made at first instance, that has been held to have been wrongly made.
The Court accepts, however, that in circumstances where the cross-respondent has filed an application for special leave, it is appropriate to stay the enforcement of the order for restitution until the determination of the special leave application and, if granted, until the determination of the appeal.

Costs

The parties adopted diverging positions in relation to the costs of this motion. The cross-respondent submitted that it should have an order for costs of the notice of motion, being "the usual order on such applications". In this regard, the cross-respondent referred to Production Spray Painting and Panel Beating Pty Ltd v Newnham (No 2); TCN Channel 9 v Antoniadis (No 2) at [20]; Loose Fit Pty Limited v Marshbaum & Ors (No 2) [2012] NSWCA 23 at [18]; and Hume v Walker (No 2) [2005] NSWCA 458 at [24].
A measure of caution is necessary whenever it is said that there is a "usual rule" as to costs. Pursuant to the Civil Procedure Act 2005 (NSW), s 98, costs are in the discretion of the court. UCPR, r 42.1 provides that: "42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs."
The courts may, and often do, develop "guides" or make statements as to what the appropriate order will usually be in particular categories or circumstances. However, the orders made depend upon the circumstances of each case. The question remains one of discretion, subject to UCPR, r 42.1.
As this Court explained in His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 142 at [28]: "[I]f some other order is to be made, that order is made in the exercise of the court's discretion. That discretion cannot be fettered. For the reasons we have given, the making of an order in accordance with a "usual rule" does not, however, involve any fettering of discretion provided a court applies the rule in the exercise of its discretion, and not as a matter of course. It is not necessary, however, that a court explain its reasons for applying the usual rule in every case. The favourable exercise of the court's discretion in ordering the costs to be costs in the cause, or plaintiff's costs in the case, if otherwise unexplained, should be taken to reflect the fact that there is already an established jurisprudence as to the basis upon which the court's discretion should be exercised in a given circumstance."
In any event, contrary to the cross-respondent's submission, the cases cited do not stand for authority that there is a "usual rule" as to the costs on a notice of motion of the kind here in question.
In the present case, the cross-appellant made a claim for restitution, but did so late in the proceedings. The cross-respondent was given time to respond to that application, but did not do so. Having regard to the principles to which we have referred, the Court would have been required to reject any opposition to the making of the order. In the circumstances, we consider that the appropriate order is that each party pay its own costs of the motion.

Orders

The Court orders: Pursuant to the Uniform Civil Procedure Rules 2005 (NSW), r 36.17 the orders of this Court of 7 March 2016 be amended by addition of orders that: (i) the cross-respondent pay to the cross-appellant the sum of $24,962.72 by way of restitution; (ii) the cross-respondent pay to the cross-appellant interest on the sum of $24,962.72 from 21 April 2015 until the date of these orders.

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: 21 March 2018

At a glance

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