[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.]
[2]
Judgment
THE COURT: In these proceedings C & E Critharis Constructions Pty Ltd ("the applicant") filed both a summons seeking leave to appeal and a notice of appeal (the latter being filed on the alternative assumption that there was no requirement for leave). In our principal judgment, we concluded that the purported appeal as of right was incompetent and that the application for leave to appeal should be dismissed because the proposed appeal had no reasonable prospects of success: C & E Critharis Constructions Pty Ltd v Cubic Metre Pty Ltd [2020] NSWCA 348. Orders giving effect to these conclusions were made in chambers on 22 December 2020 and published on the Court's computerised record system, JusticeLink, on that day. The orders are accordingly taken to have been entered on that day: r 36.11 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). The orders were as follows:
Dismiss the Notice of Appeal on the ground that it is incompetent.
Dismiss the application for leave to appeal.
Order the applicant to pay the respondent's costs of the application for leave to appeal and the appeal.
By notice of motion dated 22 January 2021, but not filed until 1 February 2021, the respondent seeks to have the costs order varied to award it indemnity costs on the basis of the applicant's failure to accept an offer of compromise made by the respondent on 4 August 2020. Before the motion was filed, the applicant indicated that it would not oppose the application. The respondent filed an affidavit but no written submissions in support of the application. By the affidavit it expressly based its application on r 36.16(2)(b) of the UCPR which concerns judgments given or orders made in the absence of a party.
The orders sought by the respondent are:
That order 3 of the orders of the court made 22 December 2020 be varied to read:
(3) Order that the applicant pay the respondent's costs of the application for leave to appeal and of the appeal on a party and party basis up until and including 4 August 2020 and thereafter on an indemnity basis.
That the court notes that the costs of this notice of motion are subject to order 3 made 22 December 2020 as varied as per order 1 above.
Regrettably, due to administrative oversight, the respondent's motion did not come to the Court's attention until a recent inquiry from the respondent's solicitor.
The circumstances in which the court has power to vary an order after it has been entered are addressed in rules 36.15, 36.16, 36.17 and 36.18 of the UCPR. It is not uncommon for the Court to receive applications for the variation of costs orders after they have been made. Such applications commonly invoke the Court's power under r 36.16(3A), which allows a grace period of 14 days after the entry of orders during which a party may make a variation application as if the orders had not been entered. After the expiration of that period, the circumstances in which an order may be varied are narrowly confined. Rule 36.16 has been recognised for that reason as a rule concerning "the fundamentally important question of finality of litigation": Kable v New South Wales (No 2) [2012] NSWCA 361 at [2] (Allsop P, Campbell and Meagher JJA agreeing at [27] and [28]).
The respondent did not file a notice of motion making its application within the 14-day period allowed under r 36.16(3A), nor does it contend that an earlier communication it had with the Court constituted a relevant application (compare Aukuso v Tahan (No 2) [2018] NSWCA 302; Foundas Arambatzis (No 2) [2020] NSWCA 51). The respondent does not in fact rely on r 36.16(3A). As indicated in [2] above, its application is based on r 36.16(2)(b).
The respondent's solicitor initially sought (not inappropriately) to avoid the cost of filing a motion by seeking the applicant's agreement to the variation sought. However, that process was impeded by the intervening vacation period and, in the meantime, the time allowed under r 36.16(3A) expired. Time for the purpose of the rules is reckoned in accordance with r 1.11. In the case of a time limit of more than 5 days, that rule does not make allowance, in the counting of days, for the exclusion of days on which the Registry is closed. Even if it did, more than 14 days on which the Registry was open passed between the entry of the orders and the filing of the motion (the Registry counter was closed to the public during that period, owing to special arrangements in place to address the risks of the COVID-19 pandemic, but electronic filing was available during that period). By the date on which the motion was filed, any application under r 36.16(3A) was accordingly out of time.
Presumably in recognition of that difficulty, the respondent instead, as noted above, invokes r 36.16(2)(b) of the UCPR, which relevantly provides that the court may vary an order after it has been entered if the order was made "in the absence of a party". Rule 36.16(2) provides in full:
36.16 Further power to set aside or vary judgment or order
…..
(2) The court may set aside or vary a judgment or order after it has been entered if--
(a) it is a default judgment (other than a default judgment given in open court), or
(b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, or
(c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order.
The notion of "absence" for the purpose of the rule in our view contemplates absence from the hearing which led to the making of orders, not to the time of the formal pronouncement of orders. That is the intention indicated by the language of paragraph (b): "whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order". It is apparent that the reason for creating a limited qualification to the finality of the Court's orders once entered is, in the case of r 36.16(2)(b), to address the risk of unfairness to a person who has not appeared at the hearing of the application giving rise to the orders in question.
Although the respondent in the present case did participate in the hearing, it contends that the orders entered on 22 December 2020 were made in its absence for the purpose of r 36.16(2)(b) because the orders were made in chambers, again owing to the special arrangements in place to address the risks of the pandemic. The respondent relies, in particular, on the fact that the parties were informed by email from the Court that the judgment would be published in their absence and were specifically requested not to attend court when the judgment was handed down.
We do not however consider that the power under r 36.16(2)(b) to vary an order at any time after it was entered on the ground that it was made "in the absence of a party" is enlivened in such circumstances. As already explained, the purpose of the rule is to confer power to address any unfairness arising from the fact that an order was made without the party in question having been heard as to whether the order should be made. The hearing, at which the respondent was represented, provided the opportunity for both parties to put submissions as to costs or at least foreshadow that there might be a need to consider further facts before a costs order was made (see Aktas v Westpac Banking Corporation Ltd (No 2) (2010) 241 CLR 570; [2010] HCA 47).
Even if we had concluded that the Court had power to entertain the respondent's notice of motion, it would still have been unsuccessful.
The basis for the variation application is that the applicant did not accept an offer of compromise made under r 20.26 of the UCPR, conveyed by email dated 4 August 2020. The offer was as follows:
"i. This offer is made pursuant to the Uniform Civil Procedure Rules 2005 and in particular UCPR 20.26;
ii. This offer is in relation to the whole of the appellant's Notice of Appeal dated 31 July 2020;
iii. The offer is for the dismissal of the Notice of Appeal;
iv. This offer is open for acceptance in writing to me by midday 4 September 2020 only;
v. This offer is not made without prejudice and may be disclosed to any court for any reason at any time, including in respect of any interlocutory applications."
The offer does not make provision for costs. Accordingly, had the applicant accepted the offer, it would have become liable to pay the respondent's costs: r 42.13A(3). Had the offer included a term that there be no order as to costs, it might have been capable of engaging the rules concerning offers of compromise, depending on the measure of compromise reflected in the respondent's preparedness not to seek costs if the appellant capitulated (Taheri v Vitek (No 2) [2014] NSWCA 344, and see generally Ritchie's Uniform Civil Procedure NSW at [42.13.13]) but it did not do so.
The offer in the present case in our view involved no element of compromise. It sought capitulation with no compromise as to costs or otherwise. Accordingly, even if the application had been made within the time allowed under r 36.16(3A), we would have dismissed it.
We add that the offer of compromise in any event only related to the Notice of Appeal and not to the subsequently-filed application for leave to appeal. As a result, any indemnity costs order would have been limited correspondingly.
[3]
Orders
For those reasons, we make the following order:
1. The respondent's notice of motion filed 22 January 2021 is dismissed with costs.
[4]
Amendments
07 May 2021 - Earlier draft of the judgment had been incorrectly published. No change to orders.
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Decision last updated: 07 May 2021