(1992) 175 CLR 564
Annets v McCann [1990] HCA 57(1990) 170 CLR 596
Autodesk Inc v Dyason (No. 2) [1993] HCA 6(1993) 176 CLR 300
R v Glyn Morgan JONES
Judgment (3 paragraphs)
[1]
Solicitors:
K & L Gates (Plaintiff/Applicant)
Wlodzimierz Antoni Kozlowski (Defendants/Respondents)
File Number(s): 2014/00332563
[2]
EX TEMPORE Judgment
HIS HONOUR: By notice of motion filed 19 November 2015 the plaintiff, Commonwealth Bank of Australia, moves the Court for orders vitiating or setting aside the orders of the Court made on 7 September 2015. It is uncontentious to say that the orders made on 7 September 2015 were made in the absence of the Commonwealth Bank. Indeed they were made in the absence of any party to the proceedings.
The orders made by the Court on 7 September 2015 were made pursuant to the provisions of the Uniform Civil Procedure Rules ("UCPR") and in particular Pt 12 r 12.8(7). That rule is part of a rule dealing with additional grounds for the dismissal of proceedings.
The term "additional" is used because the provisions of UCPR r 12.1 allow the Court to dismiss the proceedings for want of due despatch but, as was made clear by the High Court in Annets v McCann [1990] HCA 57; (1990) 170 CLR 596 and Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564, an instrument granting power or enabling the exercise of discretion prejudicing a person's rights or interests, i.e. legal interests, must be exercised bearing in mind the rules of procedural fairness.
The rules of procedural fairness can be excluded only by express provision or words of necessary intendment.
Thus the power conferred on the Court by UCPR r 12.7 would be a power that can ordinarily only operate where the rules of procedural fairness have provided the parties an opportunity to prepare and to present the case they desire. UCPR r 12.8, on the other hand, deals with a different situation.
UCPR r 12.8 deals with proceedings that have not been listed for a future date; where there are no notices of motion or other applications in the proceedings that have yet to be determined; and no action has been taken in relation to the proceedings. If a party were not to have taken such steps for over five (5) months, then UCPR r 12.8(2) governs the situation. In the relevant provision for this application, namely, a matter in the possession list, where no action has been taken for over nine (9) months, the Court may dismiss proceedings of its own motion and without notice to the parties.
The circumstances of this case are that an order was made pursuant to the terms of UCPR r 12.8(7). No motion seeking to dismiss the proceedings was ever filed or served, because it appeared from the Court's records that for over nine (9) months no party to the proceedings had taken any step in the proceedings.
The interesting aspect of these proceedings is that it seems there has not before been an application to vacate an order made under r 12.8(7) of the Uniform Civil Procedure Rules.
The application that is made to the Court is an application that is based on the provisions of, or seeks to rely upon the provisions of, UCPR r 36.16(2), which grants to the Court a discretion to set aside or to vary a judgment or order after it has been entered, if it has been made in the absence of a party and whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order. That is the relevant factual background in this instance.
In this case, the relevant party did not have notice of the relevant hearing or the application for the order. There was no such application.
The provisions of Pt 36 and, in particular, UCPR r 36.15 and r 36.16 give particular powers in relation to some of those matters, to which the High Court has made reference and which has been the subject of countless judgments of this Court and of the High Court, relating to the powers of the Court to set aside a judgment once entered: see Autodesk Inc v Dyason (No. 2) [1993] HCA 6; (1993) 176 CLR 300; R v Glyn Morgan JONES; R v Anthony Joseph Luis HILI (No 2) [2010] NSWCCA 195 ("Hili & Jones"). A judgment once entered may be altered on one of three bases: the "slip" rule; where the order does not manifest the intention of the Court; and where issued in chambers: Hili & Jones at [34].
It is unnecessary to describe the full extent of the powers of the Court to set aside a judgment either before entered or, indeed, after it has been entered. It is sufficient to note that an order of the Court may be set aside under the common law in circumstances where the order has been made in chambers, which is the relevant provision governing the orders made under UCPR r 12.8(7).
Therefore, there is no impediment to the operation of UCPR r 36.16 on the orders made under UCPR r 12.8(7) on 7 September 2015.
It has been put to the Court that the provisions of UCPR r 12.8(7) are an express provision which, expressly or impliedly, cover the field of orders that may be made on that subject and, as a consequence, the power granted to the Court under UCPR r 31.16 is not a power that can be exercised to replace or to set aside or dismiss an order under UCPR r 12.8(7).
It would be difficult to assume that the terms of UCPR r 12.8(7) was an order covering the field, in circumstances where it is a discretionary power to make orders in the absence of a party, or without notifying any of the parties. Natural justice would require that the Court in those circumstances would ordinarily allow the party to approach the Court and explain why such an order was inappropriate or unjust and should be rescinded.
Further the terms of UCPR r 12.8(7) deal with the dismissal of proceedings. It does not purport to deal with whether other orders could, should or would have the effect of undoing such an order or its effect.
In those circumstances, I do not consider that the provisions of UCPR r 12.8(7) cover the field in a way that would prevent the Court from making orders under UCPR r 36.16.
I am comforted in that approach by the fact that the provisions of the Uniform Civil Procedure Rules and the requirements of them may be waived by the Court at any stage, which would tend to militate against a construction of a rule that prevented the exercise of a discretion conferred by another rule.
I turn then to the facts of this case and whether the vacation of the orders made on 7 September 2015 is justified.
I set out the facts briefly. Essentially the proceedings relate to default on a loan.
The defendant has been in substantial default from on or about April 2013. In July 2014 the defendant involved itself in dealings with a third party which the plaintiff submits (with some force) was another act of default for the loans in question.
The bank pursued its remedy in this Court and on 11 November 2014 filed a statement of claim for possession. That statement of claim was served on each of the first, second and third defendants. None of the defendants has filed a defence.
In December 2014 the defendants lodged a dispute with the Financial Ombudsman Service in relation to the dealings between them and the Commonwealth Bank, being the plaintiff.
The terms of the procedure governing and applying to disputes lodged with the Financial Ombudsman Service is that there is a stay of proceedings between the parties thereto about that matter, pending the outcome of the inquiry or investigation by that Service. On or around 31 August 2015, the Financial Ombudsman Service issued a determination essentially in favour of the Bank. The governing procedure required or recommended that the plaintiff not commence or continue the legal proceedings until the Service has closed its file.
On or about 29 October 2015 the plaintiff, the Commonwealth Bank, received an email from the Financial Ombudsman Service notifying that the file had been closed.
Thereafter it was free, pursuant to the determination and the provisions of the procedure governing matters that are before the Financial Ombudsman Service, to continue the proceedings.
However, by that date, the order or judgment of 7 September 2015 had issued; and the Court, pursuant to the provisions of UCPR r 12.8(7), dismissed the proceedings commenced by statement of claim on 11 November 2014.
The current motion seeks the vacation of the orders of 7 September. I must exercise that discretion pursuant to the injunction in s 56 of the Civil Procedure Act 2005, namely, to give effect to the overriding purpose of the Civil Procedure Act being the facilitation of the just, quick and cheap resolution of the real issues in the proceedings.
There can be little doubt that the quickest and cheapest resolution of the real issue between the parties would involve vacation of the orders made on 7 September 2015.
Would the vacation of those orders be just? It seems that the only prejudice that could possibly be suffered by either party, if the vacation of the orders were to occur, in circumstances where new proceedings could be commenced, would be that the plaintiff in these proceedings would suffer additional costs of filing fees and commencement of proceedings.
In those circumstances, and given the absence of a prejudice to the defendant, to which the Court has been drawn, I have decided that it is appropriate, in the exercise of my discretion, to set aside the orders of the Court.
Two other matters should be mentioned. First, as I understand the practice, where a dispute has been notified to the Financial Ombudsman Service, the financial institution is supposed to notify the Court and a note placed on the file. Unless the dispute is delayed by conduct of the parties, where litigation has commenced, the Financial Ombudsman Service expedites the dispute resolution and it is finalised within three (3) months.
It is unclear whether any such notification occurred and there is no evidence that the plaintiff delayed the proceedings before the Financial Ombudsman Service. There may be good reasons why in other circumstances the financial institution (or its lawyers) ought to bear the cost of re-commencing.
In this matter, the Court makes the following orders:
1. Orders issued on 7 September 2015 dismissing the proceedings are hereby set aside.
2. The proceedings are listed for further directions before the first Registrar's list on Monday 15 February 2016. Each party will bear their own costs of the motion.
3. Orders may be entered forthwith.
[3]
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Decision last updated: 25 February 2016