Federal Court of Australia|1993-09-22|Before: Cooper JJ

Caboolture Park Shopping Centre Pty Ltd (In Liquidation) and White Industries (Qld) Pty Ltd v Flower and Hart (A Firm) [1993] FCA 471; (1993) 117 ALR 253 (22 September 1993)

CABOOLTURE PARK SHOPPING CENTRE PTY LTD (IN LIQUIDATION) and WHITE INDUSTRIES

Courts - Federal Court - jurisdiction - whether Court has jurisdiction to order costs against a third party under s.43 of Federal Court of Australia Act - whether Court has jurisdiction to discipline practitioners appearing or acting in matters before it.

Practice and Procedure - costs - whether Court has power to make an order for costs against a solicitor after judgment entered and order made for costs to be paid by one of the parties to the litigation.

Family Law Act 1975 sub-s.117(2)

Judiciary Act 1903 ss.26, 55B, 55C, 80; sub-s.55B(3)

Supreme Court of Judicature Act (1873) Amendment Act (1875) O.55 in the rules of court in Sch.1

Harrison's Law and Conduct of the Legal Profession in Queensland 2nd ed, 1984

Aiden Shipping Co Ltd v Interbulk Ltd (1986) AC 965

Bahai v Rashidian (1985) 1 WLR 1337

Brendon v Spiro (1938) 1 KB 176

In the Marriage of Collins (1985) 75 FLR 84

Cowan v Cavanagh [1978] VicRp 61; (1978) VR 665

Da Sousa v Minister of State for Immigration, Local Government and Ethnic Affairs [1993] FCA 146; (1993) 114 ALR 708

Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510

Ford-Hunt v Raghbir Singh (1973) 1 WLR 738

Gamser v Nominal Defendant [1977] HCA 7; (1976) 136 CLR 145

Jachimowicz v Jachimowicz (1986) 81 FLR 459

Jackson v Sterling Industries Limited [1987] HCA 23; (1987) 162 CLR 612

Re Justices of the Court at Antigua 1 Knapp 267; 12 ER 321

Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178

Myers v Elman (1940) AC 282

Orchard v South Eastern Electricity Board (1987) 1 QB 565

Pallas v Findlay (1985) 61 ALR 220

Philip Morris Incorporated v Adam P Brown Male Fashions Proprietary Limited (1981) 148 CLR 457

Preston Banking Company v William Allsup and Sons (1895) 1 Ch 141

In re Scowby (1897) 1 Ch 741

L Shaddock and Associates Pty Ltd v Parramatta City Council (No 2) [1982] HCA 59; (1982) 151 CLR 590

Simes v Gibbs (1838) 6 Dowl P C 310

In re St Nazaire Co (1879) 12 Ch D 88

In re Suffield and Watts; Ex parte Brown (1888) 20 QBD 693

Universal Homes Limited v Kloet (1976) 1 NZLR 246

and applicant in the case stated: R.N. Chesterman QC

P.J. Dunning

Solicitors for the applicant for

D.J. McGill

Solicitors for the second respondent

respondent in the case stated: McCullough Robertson

(1) The question referred to the Full Court by Cooper J in

the following terms:

"Does this Honourable Court have jurisdiction to entertain

the motion whether with or without leave as set out in the

notice of motion filed on behalf of White Industries (Qld)

Pty Limited on 7 May 1993 as an application in these proceedings?"

be answered:

"Yes".

(2) That Flower and Hart pay the costs of the case stated.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. Matter No. 174

(1) Application for leave to appeal be dismissed.

(2) Applicant pay the second respondent's costs of and

incidental to the application.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

LEE, HILL and COOPER JJ Before the Court is a case stated for the opinion of the Full Court arising out of notices of motion filed respectively in these proceedings by White Industries (Qld) Pty Limited ("White") and Flower and Hart, a firm of solicitors. In the notice filed by White, Flower and Hart is the respondent. The notice of motion sought an order that Flower and Hart pay all of the costs of White in the proceedings, other than those costs which were solely referable to White prosecuting its cross-claim. In the notice filed by Flower and Hart, White is the respondent and the notice sought an order that White's notice be struck out.

2. The matter arises thus. On 22 December 1986 Caboolture Park Shopping Centre Pty Ltd ("Caboolture") commenced proceedings by way of application in this Court for damages and other relief against the respondent White in respect of conduct alleged to contravene s.52 of the Trade Practices Act 1974 or to constitute fraudulent misrepresentation or negligent misstatement. In a defence and cross-claim filed on 10 April 1987, White sought payment of certain moneys together with interest from Caboolture alleging that the moneys were owing to White under a contract.

3. The application and cross-claim came on for trial which commenced on or about 14 June 1988. In those proceedings Flower and Hart acted for Caboolture until 9 August 1989 when they sought and were granted leave to file a notice of cessation to act. By 7 August 1989 the proceedings had occupied some 150 days of hearing.

4. Ultimately judgment was ordered for White against Caboolture in respect of Caboolture's application and that judgment was entered on 18 August 1989.

5. On 6 April 1990 judgment was given on the cross-claim in favour of White for the sum of $5,521,652.61 including interest and an order for costs was made against Caboolture in the following terms:

"1. That there be judgment with costs for the

first cross-claimant against the first

cross-respondent on the cross-claim in the

sum of $5,521,652.61, including interest

at the rate of 19% per annum from 21 March

1987 until judgment on the sum of $3,339,643.81.

2. That White Industries (Qld) Pty Ltd's

costs, including the costs referred to in

paragraph 1 of this order, the costs

ordered on 17 August 1989 to be paid to it

on the dismissal of the application

herein, any reserved costs and any costs

previously ordered to be paid to it which

have not yet been taxed, be specified as a

gross sum by Ryan J on a date to be fixed,

or be ascertained in such other manner as

on that date he may direct."

6. That judgment was entered on 30 April 1990. Caboolture is in liquidation and in the result no proceedings have been taken by White to recover costs under the order as White believes that such action would not be worth pursuing.

7. Subsequent to judgment being entered it seems that certain facts came for the first time to the possession of White. For the purposes of the stated case, we are asked to assume that White has evidence from which it would ask the Court to conclude:

"...that Flower and Hart:

(a) Commenced and continued litigation on

behalf of Caboolture Park Shopping Centre

Pty Ltd in the knowledge that it had no

worthwhile prospect of success in that

litigation in order to vex White

Industries (Qld) Pty Ltd;

(b) Commenced and conducted litigation on

behalf of Caboolture Park Shopping Centre

Pty Ltd when the purpose of Caboolture

Park Shopping Centre Pty Ltd of such

litigation was:

(i) to delay an action by White

Industries (Qld) Pty Limited against

Caboolture Park Shopping Centre Pty

Ltd to recover monies payable under

the contract referred to in

paragraph 2 above;

(ii) to put White Industries (Qld) Pty

Limited under pressure to compromise such claim.

(c) Delivered a Statement of Claim dated 22

December 1986 containing an allegation of

fraud in circumstances when it was not

justified in making that allegation in a pleading.

(d) Accepted instructions to conduct the

litigation in a manner designed to

obstruct and delay the hearing of the

Cross-claim referred to in paragraph 2 above."

8. On 23 November 1992 White filed an application for leave to appeal in the form of a notice of appeal in respect of that part of the orders made by the trial judge as stated:

"2. That White Industries (Qld) Pty Limited's

costs, including the costs referred to in

paragraph 1 of this order, the costs order

on 17 August 1989 to be paid to it on the

dismissal of the application herein, any

reserved costs and any costs previously

ordered to be paid to it which have not

yet been taxed, be specified as a gross

sum by Ryan J on a date to be fixed, or be

ascertained in such other manner as on

that date he may direct."

9. It sought, in addition to that order, an order that its costs be paid by Flower and Hart on an indemnity basis. The application for leave to appeal came on for hearing before us on 29 April 1993 and after hearing argument from both parties was stood over on White undertaking, inter alia, to file a notice of motion in the original proceedings.

10. Accordingly White filed a notice of motion in the original proceedings on 7 May 1993 seeking orders that Flower and Hart be joined in the proceedings and an order that Flower and Hart pay all of the costs of White, other than those solely referable to the cross-claim, so as to provide to White a complete indemnity for those costs and interest thereon. On 25 May 1993 Flower and Hart filed a notice of motion disputing the jurisdiction of the Court to entertain White's notice of motion and seeking an order that it be struck out on the grounds that the Court did not have jurisdiction to entertain such an application in the proceedings because those proceedings had been concluded by the giving of a final judgment.

11. At the request of the parties, Cooper J stated a question for the Full Court in the following terms:

"Does this Honourable Court have jurisdiction to

entertain the Motion whether with or without

leave as set out in the Notice of Motion filed

on behalf of White Industries (Qld) Pty Limited

on 7 May 1993 as an application in these proceedings?"

12. The case for Flower and Hart can be put quite simply. It is conceded that the Court has jurisdiction prior to the entry of a final judgment in the proceedings, to order costs in an appropriate case to be paid by a solicitor or other non-party. But it is said that once the proceedings have been concluded, as in the present case, by judgment being entered and indeed by an order of costs being made inter partes, there is thereafter no jurisdiction for the Court to reopen the case: cf Gamser v Nominal Defendant [1977] HCA 7; (1976) 136 CLR 145 at p 147 (per Gibbs J) and p 154 (per Aickin J). Further, it is submitted that none of the exceptions to the general principle prohibiting a Court from varying orders once entered, whether at common law or as expressed in O.35 r.7 of the Federal Court Rules, have any application to a case such as the present. So, say Flower and Hart, the motion must be dismissed. The remedy, if any, says counsel for Flower and Hart, lies in White bringing an action in tort for abuse of process of the Court as a separate application. However, if that were to be done, so the submission says, the application would now be statute barred, as the latest time for bringing an action for damages would have expired on 21 December 1992. We say nothing about whether such proceedings in tort, if available, would be statute barred.

13. The submissions on behalf of Flower and Hart proceed upon the basis that the Court's jurisdiction to make an order for costs against Flower and Hart depends solely upon s.43 of the Federal Court of Australia Act 1976 ("the Act"). That section, in sub-sec.(1), provides:

"Subject to subsection (1A), the Court or a

Judge has jurisdiction to award costs in all

proceedings before the Court (including

proceedings dismissed for want of jurisdiction)

other than proceedings in respect of which any

other Act provides that costs shall not be awarded."

14. It is submitted that the jurisdiction conferred by this sub-section ceases once there is no longer a "proceeding" before the Court and in the present case once judgment was entered against Caboolture there was no longer extant any relevant proceeding.

15. The submission concedes that the jurisdiction to award costs against a solicitor has, in the United Kingdom, been said to have been based upon the jurisdiction which the Court exercises over its own officers: cf Myers v Elman (1940) AC 282. But it is submitted the Federal Court neither admits solicitors nor maintains a roll of solicitors nor exercises disciplinary jurisdiction over the solicitors so that there can be no resort to a disciplinary jurisdiction such as might be exercised by the High Court in the United Kingdom or the Supreme Courts of the States in Australia.

16. Nor, it is submitted, can White rely upon the provisions of s.23 of the Act to confer power upon the Court to make a cost order against a solicitor because that section requires the power to be exercised in relation to a matter in which the Court had jurisdiction and upon the conclusion of the proceedings between Caboolture and White there was no longer any matter before the Court.

17. In order to examine these submissions it is convenient first to consider the basis upon which the Court obtains its jurisdiction including the jurisdiction to order costs against a solicitor and then determine whether that jurisdiction was spent once the final orders were entered against Caboolture.

18. By s.71 of the Constitution the "judicial power" of the Commonwealth is separated from the legislative power (s.1) and executive power (s.61) and is vested in a Federal Supreme Court called the High Court of Australia and, inter alia, in such other federal courts as the Parliament creates. An appellate jurisdiction and some original jurisdiction is entrenched in the High Court by ss.73 and 75 of the Constitution. By s.76 of the Constitution the Parliament may confer additional original jurisidiction on the High Court in the matters specified in that section. Section 77 of the Constitution enables Parliament to make laws, with respect to any of the matters mentioned in ss.75 and 76, "defining the jurisdiction" of a federal court created by the Parliament. Section 77 does not allow Parliament to make laws defining the jurisdiction of the High Court, or of any court of a State invested with federal jurisdiction. It would appear that a law "defining the jurisdiction" of a federal court may be a law which confers appellate or original jurisdiction and may limit that jurisdiction.

19. Section 5 of the Act is such a law of the Parliament defining the jurisdiction of a federal court. It has created the Federal Court as a superior court of record and as a court of law and equity.

20. Since 14 December 1988, s.80 of the Judiciary Act 1903 has provided that the common law in Australia, unless modified by the Constitution or by statute, "shall govern" all courts exercising federal jurisdiction in, inter alia, civil matters. Until 14 December 1988 s.80 of the Judiciary Act referred to the common law of England and not the common law in Australia. The "judicial power" of the Commonwealth vested in the High Court and in other federal courts exercising federal jurisdiction by s.71 of the Constitution would have included at least part of that common law, however defined.

21. Section 19 of the Act provides that the Federal Court has such original jurisdiction as is "vested" in it by laws made by the Parliament. Section 32 of the Act states that jurisdiction is "conferred" on the Federal Court in respect of matters, not otherwise within its jurisdiction, that are associated with matters in which the jurisdiction of the Court is "invoked". The additional jurisdiction conferred by s.32 is in respect of "associated federal claims": see Philip Morris Incorporated v Adam P Brown Male Fashions Proprietary Limited (1981) 148 CLR 457 per Mason J at p 516.

22. The jurisdiction of the Federal Court as "conferred" or "vested" in respect of matters, includes an accrued jurisdiction to deal with claims that are not derived from the federal jurisdiction provided by Parliament but are derived from common law, equity, or State statute law. That accrued jurisdiction is said to be a jurisdiction necessary for the resolution of the whole "matter" out of which the controversy between the parties has arisen and is part of the federal jurisdiction. (See Philip Morris.)

23. In addition to the above, s.43 of the Act confers on the Court a broad jurisdiction to award costs in "all proceedings before the Court". Section 43 recognizes that courts of common law have no jurisdiction to award costs unless such a jurisdiction is conferred by statute. Section 43 complements the jurisdiction obtained by the Court as a court of equity. (See Knight v FP Special Assets Limited [1992] HCA 28; (1992) 174 CLR 178 per Mason CJ, Deane J at pp 182-183.) The jurisdiction of the Court to award costs has not been narrowly defined by Parliament and the Court is able to make such orders for the payment of costs as may be required for the just disposal of all proceedings brought before it.

24. The jurisdiction to award costs in relation to a proceeding duly invoked in the Court is federal jurisdiction and no question can arise that a claim for costs is a severable and distinct claim that is not part of the "matter". Therefore, questions of accrued or cross-vested jurisdiction, considered in Pallas v Findlay (1985) 61 ALR 220 and Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510, do not need to be addressed here.

25. There seems no reason to doubt that s.43 confers upon the Court jurisdiction to award costs not only against persons who are parties but also against persons who are not. Clearly the section is no narrower than the provisions of O.91 r.1 of the Rules of the Supreme Court of Queensland considered by the High Court in Knight v FP Special Assets. Those Rules were held apposite to permit the Supreme Court to order costs against the appellant as receiver and manager of two insolvent companies responsible for initiating the proceedings and as being the "real" party to the litigation. At p 185 Mason CJ and Deane J, with whose judgment Gaudron J agreed, said:

"According to their natural and ordinary

meaning, the words of the rule are sufficiently

expansive to enable the Court to make an order

for costs against a person, whether that person

is formally a party to the proceedings or not.

The jurisdiction and the discretion thereby

conferred are not limited. Because they are not

limited it is easy to postulate a variety of

circumstances where an exercise of the

jurisdiction against a non-party would be

extravagant and unjust. However, the existence

of that possibility provides no justification

for the imposition by the courts, by way of

implication, of an arbitrary limitation upon the

general jurisdiction conferred by the rule. To

do so would, as will appear, deny power to the

Court to order costs against a non-party in

cases in which, in the interests of justice,

such orders should be made."

26. In Da Sousa v Minister of State for Immigration, Local Government and Ethnic Affairs [1993] FCA 146; (1993) 114 ALR 708, French J relied upon s.43, in our view correctly, to order the applicant's solicitor to pay the costs of the application.

27. Having regard to Knight v FP Special Assets there is no reason to believe that the jurisdiction of the Court to order costs against a non-party under s.43 is more limited than the jurisdiction presently conferred upon the High Court in the United Kingdom by s.51 of the Supreme Court Act 1981 and considered by the House of Lords in Aiden Shipping Co Ltd v Interbulk Ltd (1986) AC 965. Section 51 provides:

"Subject to the provisions of this or any other

Act and to rules of court, the costs of and

incidental to all proceedings in the civil

division of the Court of Appeal and in the High

Court, including the administration of estates

and trusts, shall be in the discretion of the

court, and the court shall have full power to

determine by whom and to what extent the costs

are to be paid."

28. The words "by whom and to what extent" came into the United Kingdom legislation in 1890. Prior to that time costs were governed by a statutory rule (O.55 in the rules of court in Sch.1 to the Supreme Court of Judicature Act (1873) Amendment Act (1875)) which authorised costs to be in the discretion of the Court. Lord Goff who delivered the principal reasons, with which Lords Bridge, Brightman, Mackay and Ackner agreed, emphasised in Aiden Shipping Ltd at 975 the importance of the fact that s.51(1) was concerned with the jurisdiction of the Court to make orders as to costs, a jurisdiction which could be limited by the Court's rule-making power. Hence, as his Lordship said, the jurisdiction conferred was expressed in wide terms.

29. The only limitation which is imposed upon the Court's jurisdiction in s.43 of the Act, is that that jurisdiction be a jurisdiction to award costs "in all proceedings before the Court". It was submitted on behalf of Flower and Hart that once the original action or proceedings had been completed by entry of judgment there was no longer a "proceeding" before the Court in respect of which a cost order could be made. That submission really confines the meaning of the word "proceeding" to the original action and is inconsistent with the definition of "proceeding" in s.4 of the Act where it is defined as meaning:

"...a proceeding in a Court, whether between

parties or not, and includes an incidental

proceeding in the course of, or in connexion

with, a proceeding, and also includes an appeal;".

30. The context of the Act provides no indication that the words defining the grant of jurisdiction in s.43 of the Act have a temporal meaning which limits the jurisdiction conferred to a jurisdiction which terminates when a judgment has been pronounced and extracted in the proceeding that has invoked the jurisdiction. There is no cause for such a meaning to be implied. First, such a construction would provide less than the jurisdiction traditionally exercised by superior courts of record. Second, the jurisdiction conferred by s.43 is a separate jurisdiction dealing with the liability for the costs of proceedings conducted in the Court in the exercise of other jurisdiction of the Court. (See s.26 of the Judiciary Act 1903 for the conferral of a similar jurisdiction on the High Court in respect of "matters" brought before that Court.) The clear intent of Parliament is to provide sufficient jurisdiction and adequate powers to enable the Court to quiet the controversies exposed in the proceedings brought before it and to better exercise its jurisdiction. The grant of jurisdiction in s.43 of the Act in all proceedings before the Court is a jurisdiction that is invoked by the commencement of proceedings and the manner of exercise of the jurisdiction is governed by ss.22 and 23 and the common law.

31. No doubt, an implied grant of all necessary powers is attached to the conferral or vesting of jurisdiction but ss.22 and 23 of the Act state expressly that the Federal Court has the following powers:

"22. The Court shall, in every matter before the

Court, grant, either absolutely or on such terms

and conditions as the Court thinks just, all

remedies to which any of the parties appears to

be entitled in respect of a legal or equitable

claim properly brought forward by him in the

matter, so that, as far as possible, all matters

in controversy between the parties may be

completely and finally determined and all

multiplicity of proceedings concerning any of

those matters avoided.

23. The Court has power, in relation to matters in

which it has jurisdiction, to make orders of

such kinds, including interlocutory orders, and

to issue, or direct the issue of, writs of such

kinds, as the Court thinks appropriate."

32. There is nothing in ss.22 or 23 of the Act to indicate an intention of the Parliament to circumscribe the power of the Federal Court. Indeed, the terms of s.22 of the Act contemplate the Court exercising its jurisdiction with the benefit of the widest of powers. (See Darling Downs.)

33. What s.43 requires is that the jurisdiction to order costs be one limited to costs relating to a proceeding. In other words, there is no jurisdiction to order costs at large. There has to be or have been, within the Court's jurisdiction, instituted a proceeding. It is irrelevant, subject to the application of common law principles discussed later, that judgment has been given and entered.

34. The full Family Court of Australia has, in two cases to which we were referred, In the Marriage of Collins (1985) 75 FLR 84 and Jachimowicz v Jachimowicz (1986) 81 FLR 459, expressed the view that it had power to order costs against a solicitor. The power to award costs in the Family Court, which is contained in sub-s.117(2) of the Family Law Act 1975, is expressed in wide general terms not dissimilar in principle from those contained in s.43 of the Act. The first of the two decisions is somewhat ambivalent as to whether the power to order such costs necessarily depended upon the "inherent jurisdiction" of the Court on the one hand, or was to be found in sub-s.117(2) on the other. Jachimowicz, however, appears to rest the matter rather on the inherent jurisdiction of the Court on the basis that the Family Law Rules (1984) (Cth) were silent.

35. Having regard to the provisions of s.43 there is in our view no need to consider whether the "inherent jurisdiction" of the Court can be called in aid, or indeed whether, in the case of a statutory court, it is inappropriate to refer to an "inherent jurisdiction": see Jackson v Sterling Industries Limited [1987] HCA 23; (1987) 162 CLR 612 at p 618. It suffices to say that s.43 confers in wide terms an express jurisdiction to award costs and that the Court's powers, in exercise of the jurisdiction, enables a costs order to be made against a third party to the litigation in a suitable case.

36. The second basis upon which the jurisdiction of the court to order costs against a solicitor representing one of the parties, may be founded is said to be the "implied" "accrued" or "inherent" jurisdiction which a court has over its own officers: see Myers v Elman; Taylor v Taylor [1979] HCA 38; (1979) 143 CLR 1 per Gibbs J at p 6; Grassby v R. [1989] HCA 45; (1989) 168 CLR 1 per Dawson J at pp 16-17; cf. Knight v FP Special Assets (supra) per Mason CJ and Deane J at p 188.

37. Where the court has a statutory power to award costs against non-litigants and it is sought to obtain an order against a solicitor in consequence of his or her conduct in the litigation, it is neither necessary nor appropriate to rely upon the jurisdiction of the court over its own officers. (See Knight v FP Special Assets per Mason CJ, Deane J at p 188). However, this does not deny the existence of the jurisdiction, nor preclude recourse to it in an appropriate case where the ordinary jurisdiction as to costs is unavailable or inappropriate in the particular circumstances.

38. The matter is the subject of discussion by the House of Lords in Myers v Elman. That was a case where the managing clerk of the solicitor, who had conduct of the matter, had been guilty of misconduct in, inter alia, the preparation and filing of incorrect affidavits of discovery. An order for costs against the solicitor was ultimately set aside because the evidence failed to establish any of the charges against the managing clerk. However, in the course of the judgment their Lordships discussed the basis of the jurisdiction to order a solicitor to pay costs. It was said that the primary object of the Court was not to punish the solicitor but to protect the client who has suffered and to indemnify the party who has been injured (per Viscount Maugham at p 289). It rested, however, on the jurisdiction which the Court had over its officers. As the judgments of the case disclose, the power of the English courts to order a solicitor to pay costs in an appropriate case was no modern invention and there are a number of cases cited of some antiquity. Lord Atkin (at p 303), while emphasising the duty owed to the Court by legal practitioners in the conduct of litigation in the Court, emphasised that the Court was concerned to punish the breach of duty to itself. Lord Wright (at pp 318-319) said:

"But alongside the jurisdiction to strike off

the Roll or to suspend, there existed in the

Court the jurisdiction to punish a solicitor or

attorney by ordering him to pay costs, sometimes

the costs of his own client, sometimes those of

the opposite party, sometimes, it may be of

both. The ground of such an order was that the

solicitor had been guilty of professional

misconduct (as it is generally called) not,

however, of so serious a character as to justify

striking him off the Roll or suspending him.

This was a summary jurisdiction exercised by the

Court which had tried the case in the course of

which the misconduct was committed. It was

clearly preserved to the Court by s.5, subs(1),

quoted above. It was a summary jurisdiction, in

which the intervention of the judge was invoked

at the conclusion of the case either by motion

in the Chancery Court or by a motion or

application for a rule in the Courts of Common

Law. Though the proceedings were penal, no

stereotyped forms were followed. Hence now the

complaint is not treated like a charge in an

indictment or even as requiring the

particularity of a pleading in a civil action.

All that is necessary is that the judge should

see that the solicitor has full and sufficient

notice of what is the complaint made against him

and full and sufficient opportunity of answering

it... The summary jurisdiction thus involves a

discretion both as to procedure and as to

substantive relief, though there was and is an appeal...

The underlying principle is that the Court has a

right and a duty to supervise the conduct of its

solicitors, and visit with penalties any conduct

of a solicitor which is of such a nature as to

tend to defeat justice in the very cause of

which he is engaged professionally...".

39. It is true that this Court has no jurisdiction to admit solicitors. It does not maintain a roll of solicitors and has no power in consequence to strike solicitors off any roll. The right to appear and the right to instruct counsel to appear in this Court are both governed by the provisions of the Judiciary Act 1903, s.55B, which confers upon a person who is entitled to practise as a barrister or solicitor in the Supreme Court of a State or Territory the like entitlement to practise in this Court. That entitlement is subject to the provisions of sub-s.55B(3) which requires the name of the solicitor (or barrister if that be the case) to be entered in a register of practitioners kept in accordance with s.55C by the Registrar of the High Court. Power to erase a person's name from that register resides in the Registrar of the High Court or the High Court itself but not in this Court.

40. In a somewhat unappealing submission, counsel for Flower and Hart submitted that legal practitioners appearing or acting in matters in this Court owe no duty to the Court which the Court can supervise. Short of punishing a practitioner guilty of contempt, where the Court may act under O.40 of the Federal Court Rules, the submission would have it that the Court could take no action against a solicitor or counsel guilty of misconduct or for that matter, compensate a person who suffered damage as a result of a breach by a legal practitioner of a duty to the Court to conduct litigation with due propriety.

41. Although it is strictly unnecessary in the present proceedings having regard to the provisions of s.43 of the Act to form a decided view on this matter, we do not consider the submission to be one of strength. The fact that the Court neither maintains a roll of practitioners nor may strike off the name of a practitioner does not mean to say that persons who practise in this Court owe no duty to the Court, nor that the Court could not in an appropriate case, falling short perhaps of contempt, discipline a legal practitioner who acted in breach of a duty to the Court.

42. In the United Kingdom, admission to practise as a barrister historically was controlled by the Inns of Court so that a barrister was not properly to be regarded as an officer of the Court. Thus a barrister could only be disbarred by the Inn of which he was a member rather than the Court itself: Re Justices of the Court at Antigua (1 Knapp 267; 12 ER 321). Nevertheless it was early held that the Courts could prevent a barrister who had acted dishonestly from practising before them. Harrison's Law and Conduct of the Legal Profession in Queensland 2nd ed, 1984, to which we were referred at p 33, suggests that at common law a court had an inherent power as a necessary adjunct to its function of administering justice. This view is reinforced by the comments of Sir John Donaldson MR in Orchard v South Eastern Electricity Board (1987) 1 QB 565 at p 571 where it is pointed out that the High Court had never asserted any jurisdiction over members of the bar.

43. As presently advised, we see no reason, s.55B notwithstanding, to doubt that in an appropriate case, involving, for example, dishonesty by a legal practitioner, the Court could refuse to permit that practitioner to represent a client before it or otherwise discipline that practitioner. The quotation from Lilley CJ (at p 67) in R v Byrne; in re Swanwick (1882) 1 QLJR 66 that:

"There can be no doubt whatever, and we wish it

to be fully understood, that we have

jurisdiction to deal with the conduct of the

ministers and officers of the Court, that

conduct, of course, being only subject to our

control so far as it relates to their

professional duties."

is as much true of this Court as it was of the Supreme Court of Queensland of which it was said. As the Chief Justice said in the passage immediately afterwards, the word "minister" was used to cover barristers who are not regarded as "mere officers of the Court".

44. It is of the utmost importance for the administration of justice in this Court that legal practitioners acting in proceedings before the Court are honest, candid with the Court and neither obstruct the administration of justice by the Court, nor abuse the Court's process. It can hardly be accepted that the Court must stand idly by when practitioners appearing before it, or acting in matters in the Court, act with impropriety.

45. If it be correct that the Court has jurisdiction to make an order against a solicitor representing one of the parties before it based on the ability of the Court to enforce a duty owed by practitioners to the Court, it seems clear as a matter of authority that it is a separate jurisdiction which would continue even after judgment had been obtained in the main action. So in Re Grey (1892) 2 QB 440, it was held that disciplinary proceedings could be taken notwithstanding that judgment had in fact been given against the solicitor for moneys which he had failed to pay over to his client. The right of the client to be paid the debt was a right distinct from the right of the client to make application to the Court for the institution of disciplinary proceedings.

46. Similarly, in Simes v Gibbs (1838) 6 Dowl P C 310, Patterson J. held that the jurisdiction could be exercised after judgment had been entered and execution issued and that the summary jurisdiction proceedings "are properly entitled in the cause out of which the claim to the bill is alleged to have arisen, although the action may be at an end": see also Brendon v Spiro (1938) 1 KB 176 at pp 187, 194. The jurisdiction ought ordinarily be exercised by the trial judge: Bahai v Rashidian (1985) 1 WLR 1337 at pp 1342, 1344, 1346.

2. Whether the entry of judgment precluded an order for costs now being made.

47. Once the jurisdiction of the Court has been attracted, the powers available to the Court in the exercise of that jurisdiction are to be found in the common law and the laws of the Commonwealth.

48. There is no doubt that the common law rule is that once a judgment of the Court has been passed and entered, the Court thereafter lacks power to make an order which alters or sets aside that judgment. The only remedy in such a case for a dissatisfied litigant is, where available, an appeal: In re St Nazaire Co (1879) 12 Ch D 88; In re Suffield and Watts; Ex parte Brown (1888) 20 QBD 693 at p 697 per Fry LJ and at p 698 per Lopes LJ; and cf Gamser v Nominal Defendant.

49. The general rule admits to certain exceptions but these are, so the respondent submits "severely circumscribed". One such exception is the "slip rule" (see L Shaddock and Associates Pty Ltd v Parramatta City Council (No 2) [1982] HCA 59; (1982) 151 CLR 590; another exception is fraud and a third relates to self-executing orders. None of these is relied on in the present case.

50. Order 35 r.7 of the Federal Court Rules sets out exceptions to the general rule that the Court will not vary or set aside judgments. These examples largely reflect the common law position. None is here relevant. However, Caboolture relies upon what is said to be the power of courts to make supplemental orders where circumstances make it necessary so to do. That in an appropriate case a supplemental order may be made after judgment is entered, is clear from Preston Banking Company v William Allsup and Sons (1895) 1 Ch 141. The true principle was expressed in that case by Lord Lindley (at pp 143-144) as follows:

"This is not an application to alter an order on

the ground of some slip or oversight. Nor is it

a case in which the order has not been drawn up.

Here the order has been drawn up, and it

expresses the real decision of the Court; and

that being so, the Court has no jurisdiction to

alter it. If this summons had proceeded on the

theory that the order of the 11th of July was

right, and that circumstances had since occurred

which had rendered a supplemental order

necessary, the Court might have entertained the

application; but this summons proceeds on the

theory that the order of the 11th of July is

wrong. In my opinion, it is of the utmost

importance, in order that there may be some

finality in litigation, that when once the order

has been completed it should not be liable to

review by the Judge who made it."

51. Critical to the jurisdiction of the Court is first that the application not be one in any way to vary or alter the initial order. The present application does not seek to do this. It is, in the sense used in the cases, a supplemental order.

52. Assistance may be obtained from the decision of the Court of Appeal in In re Scowby (1897) 1 Ch 741. In that case an order had been made directing certain costs to be taxed and paid to trustees. In fact those trustees had been in default of a prior order and the costs in question had been incurred in unnecessary proceedings carried out on the advice of the trustee's solicitors. An order was made supplemental to the order directing that none of the costs should be paid to the trustees until they had first complied with the earlier order. The Court of Appeal had no difficulty in finding that the judge had jurisdiction to make the order. Smith LJ said (at p 754):

"Now, first of all, had the learned judge

jurisdiction to make this order... He did not

touch the previous orders... nor had he any

jurisdiction to do so. What he did was to make

a supplemental order, to the effect that the two

orders of February 4 and December 23, 1892, are

not to be further acted upon until the trustees

who are in default have put themselves out of

default by bringing the money into court as they

were ordered to do in 1887, and which they have

never done up to the present moment. That he

had jurisdiction appears to me to be clear from

the judgment of the Lord Chancellor in Preston

Banking Co v William Allsup and Sons."

53. There are many cases where supplemental orders will be made and the jurisdiction, while no doubt requiring caution, is not limited merely, as the respondents say, to the making of orders in aid of the enforcement and working out of original orders, although the making of supplemental orders may be appropriate in such cases. Cases such as Ford-Hunt v Raghbir Singh (1973) 1 WLR 738; Universal Homes Limited v Kloet (1976) 1 NZLR 246; Neylon v Dickens [1987] NZCA 55; (1987) 1 NZLR 402; and Cowan v Cavanagh [1978] VicRp 61; (1978) VR 665, are all examples of supplemental orders being made in proceedings where an order for specific performance has been initially been made. But it does not follow that the power to make supplemental orders is limited to such a case. That the present case involves the making of a supplemental order is made more apparent when the form of the appropriate order is considered. In our view that order would be that the solicitors pay the costs of White Industries (Qld) Pty Ltd on an indemnity basis and that payment by the solicitors operate to discharge the liability of Caboolture. So framed it is clear that the Court has no need in any way to vary or alter any order previously made by it.

54. The principle behind denying the right of a court to vary or alter a judgment regularly given and entered is the need for finality of litigation. The Court has adjudicated upon the facts of the claim brought by a plaintiff against a defendant, found for one side and entered the relevant judgment. Neither the facts nor the law are to be agitated again, save on an appeal. But the issues involved where a claim is made against a solicitor for costs by a party to the litigation have not been determined by the judgment which has been entered. They remain yet to be resolved.

55. Ultimately the submission put on behalf of Flower and Hart was that an order could be made by the Court prior to the entry of judgment in the main proceedings against a solicitor in default of his or her obligation to the Court, but that no such order could be made once the order in the main proceedings had been entered. Thus a solicitor who was able to keep hidden information of his misconduct would escape an order for costs by the Court once judgment had been entered and become liable only in damages in tort, if not otherwise statute barred. Such a submission can not be accepted.

56. For these reasons we are of the view that the question in the stated case should be answered in the affirmative. The parties are in agreement that if the Court has jurisdiction no leave is required. Flower and Hart should pay the costs of the stated case.

57. The parties are also in agreement that if the stated case is answered in the affirmative the application for leave to appeal brought by White which stands part heard, should be dismissed and White should pay the costs of Flower and Hart as a respondent to that application.

58. We add one further comment. On the application for leave to appeal brought by White two volumes of appeal book were prepared comprising in all 1,015 pages. It was unnecessary to refer to anything in the appeal book other than perhaps the reasons for judgment of the trial judge, the orders made by him and the notice of appeal. There is a tendency on the part of litigants to include in an appeal book every possible document no matter how irrelevant it might be. The result is a waste of money and resources. In these circumstances, when the costs are taxed the taxing officer should be careful to ensure that the costs White is liable to pay not include the costs of including in the appeal book such documents as it itself did not request to be inserted.

Court of Australia Act 1976

Supreme Court Act 1981

Caboolture Park Shopping Centre Pty Ltd (In Liquidation) and White Industries (Qld) Pty Ltd v Flower and Hart

At a glance

Court

Decision date

Before

Source

Judgment (120 paragraphs)

Caboolture Park Shopping Centre Pty Ltd (In Liquidation) and White Industries (Qld) Pty Ltd v Flower and Hart (A Firm) [1993] FCA 471; (1993) 117 ALR 253 (22 September 1993)

Parties

Legislation Cited (4)

Cases Cited (13)