Di Stasio Pty Ltd v R & K Services Pty Ltd [2018] VSCA 340

(2) R & K's reopening application - the June ruling

(3) Di Stasio's reopening application - the September ruling

(4) R & K's reopening application revisited - the September reasons

The principle of finality: was there inadvertence or neglect? - Ground 1(a) & (b)

Did the judge ignore prejudice or apply the wrong test? - Ground 1(c)

Did the judge err in formulating the costs orders? - Ground 2

1 Between 2012 and 2014 an Italian restaurant, Café Di Stasio, underwent renovations, in two stages: Stage 1 - the expansion of its kitchen; and Stage 2 - the expansion of its office facilities into adjoining premises. The owner, Di Stasio Pty Ltd ('Di Stasio'), engaged Robert Simeoni Architects Pty Ltd ('the architect') to prepare the design. Di Stasio entered into a written 'cost plus' contract with a building and construction company, R & K Services Pty Ltd ('R & K'), to perform the Stage 1 works and later a fixed-price contract with R & K for the Stage 2 works. Disputes arose as the works were carried out. R & K brought proceedings against Di Stasio in the County Court for unpaid progress claims. Di Stasio in turn brought a counterclaim for the cost of works it alleged needed to be done to rectify defects.

2 After a 12 day trial, the judge upheld some of R & K's claims, disallowed others, and dealt with Di Stasio's counterclaim. In particular, the judge held that the second progress claim under the Stage 2 contract ('Progress Claim 2') failed because R & K had not served on Di Stasio a tax invoice equal in value to the certificate issued by the architect as the contract required, leading to a small but material difference between the amounts appearing on the two documents.[1] This became known as the 'equal in value' issue. The judge also rejected a claim by R & K based on quantum meruit.

3 Following publication of the judge's reasons on 19 May 2017 supporting his rejection of Progress Claim 2 ('the initial reasons'),[2] but before orders had been pronounced and authenticated, R & K applied to amend its pleading, reopen its case and adduce evidence of an invoice in the appropriate sum ('the new invoice'), which it had served on Di Stasio on 23 May 2017 ('R & K's reopening application'). On 16 June 2017 the judge gave an ex tempore ruling in R & K's favour ('the June ruling').[3] Di Stasio in turn applied for the June ruling to be reopened on the basis that the judge proceeded on the misapprehension that Di Stasio had not pleaded in its defence that R & K had not complied with the contractual obligation to issue an invoice equal in value to the architect's certificate ('Di Stasio's reopening application'). The judge acceded to that application ('the September ruling').[4] The judge reheard R & K's reopening application and in September 2017 again held that leave should be granted to R & K to amend the statement of claim and reopen its case to rely on the new invoice ('the September reasons').[5] The judge then published further reasons on 13 November 2017 in which he upheld, relevantly, R & K's Progress Claim 2 ('the November reasons').[6]

4 Leave has been granted to Di Stasio to rely on two grounds of appeal,[7] the first of which raises the issue of whether the judge, in the September reasons, properly exercised his discretion to permit R & K to amend its pleading, reopen its case and adduce evidence of the new invoice.[8] It is therefore necessary for Di Stasio to establish an error within the principles enunciated in House v The King.[9] The second ground of appeal is directed at the costs order made in R & K's favour following the November reasons.

5 R & K seeks to support the judge's decision that upheld Progress Claim 2 by means of a Notice of Contention.[10]

6 The judge, at one stage of this proceeding, described it as having 'had a very unhappy history'.[11] In my view, a brief reflection upon the circumstances in which this appeal is brought supports that conclusion. It is regrettable that a sensible compromise could not have been reached between the parties.

7 For the reasons set out below, I would dismiss the appeal. In those circumstances, it is unnecessary to determine the Notice of Contention.[12]

8 Di Stasio relies on the following grounds of appeal:

1. The judge below erred in allowing the respondent's application by summons dated 1 June 2017 to reopen its case, amend its pleading and tender further evidence:

(a) because, on the findings of fact made by him, namely that the respondent's legal representative:

(i) was clearly on notice that the appellant was denying compliance with the contractual procedure for payment of progress claims in respect of Progress Claim No 2 ([27]); and

(ii) ought to have appreciated the significance of the respondent's failure to comply with that contractual procedure insofar as it required service of a tax invoice equal in value to the architect's certificate ([34]),

the respondent's failure, prior to the end of the trial, to serve an invoice which conformed with the contractual requirements necessary to entitle it to payment of Progress Claim No 2, was a matter of neglect on the part of the respondent or its counsel, not inadvertence;

(b) alternatively, because even if it was a matter of inadvertence, it was not inadvertence of a kind which could justify an exercise of the discretion to reopen for the purpose of permitting the amendment of the pleadings and the tender of further evidence since:

(i) the respondent did not overlook the need to tender an invoice of equal value to the certificate during the trial as no such invoice existed until it was created by the respondent following the publication of the trial judge's reasons for judgment dated 19 May 2017 ([5]); and/or

(ii) the respondent had in fact engaged with the appellant's defence as referred to in paragraph (a)(i) and countered it by relying on substantial compliance with the contractual procedure ([12], [30]); and/or

(iii) it would be antithetical to the public interest in the finality of litigation to permit, under the justification of inadvertence, a party to be allowed to recast its case having had the benefit of the reasons of the judge;

(c) further, because:

(i) he overlooked or failed to take into account clear prejudice to the appellant if the application to reopen and amend were allowed; and/or

(ii) he applied the wrong test in determining whether the appellant would suffer a relevant prejudice if the application were allowed, by requiring the appellant to establish the matter probably would have settled had the respondent taken the step of serving a compliant invoice before the end of the trial (16 June ruling at T 1227.16-21).

1. The judge below further erred in entering judgment for the respondent and formulating costs orders in favour of the respondent by reference to the case as so amended and the evidence as so tendered, rather than by reference to matters as they stood at the time he gave judgment on 19 May 2017.[13]

9 The Stage 2 contract is a standard form RAIA/MBA 'ABIC BW-1 2002 basic works contract' ('the contract'). The contract price is $245,760.90 (building work cost $223,419.00 plus GST of $22,341.90). It was executed on 15 October 2013 with an agreed practical completion date of 29 November 2013. In Section A of the contract, cl A3.1 relevantly provides that:

• pay the contractor the contract price as adjusted in accordance with this contract

• comply with any other obligation under this contract.

10 Clause A5 sets out the role of the architect under the contract, and relevantly provides:

A5.1 The architect ... is appointed to administer this contract on behalf of the owner. The architect is the owner's agent for giving instructions to the contractor. However, in acting as assessor, valuer or certifier, the architect acts independently, not as the agent of the owner.

A5.2 The owner must ensure that the architect, in acting as assessor, valuer or certifier, complies with this contract and acts fairly and impartially, having regard to the interests of both the owner and the contractor.

11 Section N sets out the procedure for payments for the works. The owner's obligation to pay is set out in cl N2.1:

Owner's obligation to pay contract price

N2.1 The owner must pay the contract price, adjusted in accordance with this contract, progressively in accordance with certificates issued by the architect.

12 The procedure for the contractor to claim for payments is set as follows:

Claim for payments - procedure for contractor

N3.1 The contractor may submit to the architect a claim for a payment on completion of each of the stages shown in item 15 of schedule 1. The claim must set out the contractor's valuation of the work completed. The claim must identify any amount of GST that has been included in the claim.

13 The architect then assesses and certifies the contractor's claim:

Claims for payment - procedure for architect

N5.1 The architect must assess the contractor's claim for a payment and issue a certificate setting out any payment due within 10 working days after receiving the claim. The architect must take account of:

• the value of the work completed making allowance for the cost of rectifying defects
• an allowance for cash retention
• GST.

14 Under cl N6.1 the contractor is then required to prepare a tax invoice:

Contractor to prepare tax invoice

N6.1 On receiving the certificate from the architect, the contractor must prepare a tax invoice equal in value to the certificate and present both documents to the owner for payment.[14]

15 The obligation to pay is then set out in cl N7.1:

Certificates - obligation to pay

N7.1 The amount stated as owing in any certificate must be paid within 5 working days, after delivery of the certificate and the tax invoice.

16 In Section R of the Stage 2 contract, headed 'Miscellaneous', the procedure for disputing the architect's certificate is set out:

Disputing architect's certificate, written decision, notice or failure to act

R2.1 If the contractor wishes to dispute a certificate, notice, written decision or written assessment issued by the architect, or the failure of the architect to issue something, the contractor must give the architect written notice under this clause within 15 working days after:

• receiving the certificate, notice, written decision or written assessment; or
• becoming aware of the failure of the architect to issue something.

R2.2 If the contractor fails to give a notice under clause R2.1, the contractor will not be entitled to dispute the matter at all.

17 Relevantly, in [7] of its second further amended statement of claim (dated 16 September 2016), R & K pleaded that it submitted Progress Claim 2 'in accordance with the terms of the [c]ontract' on or about 3 December 2013 in the sum of $108,450.88. In its defence (dated 3 October 2016) to the second further amended statement of claim ('the defence'), Di Stasio admitted the allegations in [7]. R & K pleaded in [8] that on or about 11 December 2013, the architect issued a certificate in the sum of $109,333.43. The figure '$108,450.88' was struck out. Di Stasio gave a bare denial to [8] in the defence.[15] Di Stasio submits that the striking out, and substitution, shows that R & K turned its mind to the discrepancy between the original claim and the architect's certificate. The same amended figure is then pleaded by R & K in [12] as a particular of breach of the contract in respect of Progress Claim 2 'Invoice i908' and the lower figure is struck out.

18 In [12(b)] of the defence, Di Stasio repeated a plea that appeared in an earlier defence (as [11(c)]),[16] namely, that there was no obligation on it to pay Progress Claim 2 because no invoice equal in value to the architect's certificate had been prepared and presented to Di Stasio:

It says ... that no obligation to make any payment in relation to the second, third or final progress claims has arisen, whether under clause N6.1 of the ... Stage 2 Contract or otherwise, as no person has prepared tax invoices equal in value to any certificates of the architect issued in relation to those claims and presented those documents to Di Stasio for payment as required by clause N6.1 of the Stage 2 Contract.

19 It was conceded at the trial that in respect of Progress Claims 3 and 4 the architect had not issued any certificates.[17]

20 At the trial R & K was represented by its solicitor alone and Di Stasio was represented by junior counsel. In the initial reasons, the judge referred to the defence and noted that Di Stasio emphasised the failure by R & K to dispute the architect's certificate. The judge said:

As to payment, it was said that R & K was 'entitled to submit to the architect progress claims for payment based on works completed' with the architect obliged to assess those claims for payment 'and to issue a certificate setting out any payment due within 10 working days after receiving the claim.'

On receiving the certificate, R & K 'was required to prepare a tax invoice equal in value to the certificate and to present both documents to Di Stasio for payment' with Di Stasio obliged to pay the contract price adjusted in accordance with the Stage 2 Contract progressively and in accordance with certificates. Such payment was required within five working days after delivery of the certificate and the final tax invoice. It was said that if R & K wished to dispute [the] certificate, notice or decision issued by the architect or [the] failure of the architect to issue something, it was 'required to give the architect written notice within 15 working days after receiving the certificate, notice, written decision or written assessment or becoming aware of the failure of the architect to issue something.' It was said that if R & K failed to give notice of dispute it would 'not be entitled to dispute the matter at all.'[18]

21 The judge noted that, on the one hand, R & K pointed out that Progress Claim 2 had been certified by the architect, the certificate had a cross in the box indicating that it had been circulated to the owner, and Di Stasio did not call evidence that it had not received the certificate.[19] On the other hand, Di Stasio submitted that the procedure under the contract was sequential; it required the builder's claim to be assessed and certified by the architect, then for the builder to prepare a tax invoice equal to the value of the certificate, and ultimately for the builder to present both documents to the owner for payment. Di Stasio pointed to evidence given by Johannes Hartman ('Hartman'), the principal of R & K, that there was confusion about the amount to be claimed for Progress Claim 2, with the result that there were four versions of that claim and that claim was never finalised. The judge observed:

[Junior counsel for Di Stasio] said that, according to Mr Hartman's evidence-in-chief, some four versions of R & K's second progress claim were raised, ranging from a low of $108,450.88 (12 December 2013 ...) to a high of $120,420.72 (11 December 2013 ...). All of these claims purported to be inclusive of Goods and Services Tax. He said, according to Mr Hartman's evidence, another Second Progress Claim was also issued in the sum of $108,450.88 ... Next, it appears that on 12 December at 11.05am, ... the architect issued a certificate certifying payment of in figures $109,333.45 inclusive of GST and in words, 'One hundred and eighteen thousand, nine hundred and fifty dollars and nineteen cents', inclusive of GST. [Junior counsel] submitted that 'no claim for payment which accords with the architect's certificate has been issued, either in invoice form or the accompanying spreadsheet form.' All of the documents referred to, he submitted, including the architect's certificate, contained errors.

Accordingly, said [junior counsel]:

it is apparent from this documentary trail, that the Second Progress Claim was never finalised and no Second Progress Claim has properly been issued or certified within the terms of the Stage 2 Contract.[20]

22 Di Stasio relied on a concession made by Hartman during cross-examination that no obligation to pay had arisen in accordance with the contractual regime:

Accordingly, said [junior counsel], there was no contractual liability on Di Stasio to pay the Stage 2 claim. He noted that R & K did not issue any tax invoice in accordance with the architect's certificate. ... Rather than doing this, said [junior counsel], R & K 'issued a further progress claim purporting to be the Second Progress Claim for a different sum.'[21]

23 The judge found that an architect's certificate and the Progress Claim 2 were received by Di Stasio. The judge concluded that the 'obvious inference to draw is that this material was delivered to Di Stasio through the agency of the architect's office'.[22] He held that on its true construction the sum being certified by the architect was $109,333.45, while the sum appearing in the invoice relied on by R & K was $108,450.88.[23]

24 On the question of the effect of this discrepancy on R & K's claim, the judge, after referring to cls N6.1 and N7.1, considered whether the certificate and invoice could be said to be equal in value, and found that they were not. Although he described the failure of the claim on such a trivial point (the difference is $882.57) to be 'a scandal to the law',[24] nevertheless the contract required equivalence. Accordingly, he regarded the difference, while small, as material.

25 The judge remarked that the problem could have been remedied if a tax invoice equal in value to the architect's certificate had been rendered prior to the end of the trial (there being no time limit for the rendering of tax invoices). Then, if R & K had sought leave to amend the statement of claim and leave had been granted, evidence of the invoice could have been adduced, with leave:

[The solicitor for R & K] in his closing submissions did not deal with the discrepancy between the figure in the architect's certificate and the tax invoice relied upon, or how it could be said that the one is 'equal in value' to the other. The language in the contract as to the preparation of a tax invoice 'equal in value' to the certificate, appears mandatory. I have found no judicial authority that would support the view that the phrase 'equal in value' could be regarded as satisfied where two documents referring to the same currency seek payment of different amounts. One would expect that a progress payment claim certified by an architect and a tax invoice relative to the same claim would only be 'equal in value' if they both sought precisely the same amount of money. In Colonial Ammunition Company Ltd v The King, speaking of a contract for the purchase by the New Zealand government of ammunition, Myers CJ said:

I regard the words 'equal to' as meaning 'equal in value to', or 'equivalent to'.

No doubt, the maxim de minimis non curat lex, meaning the law does not worry about trifles, might cover a situation where there was a rounding-up or a rounding-down in the one document or the other, rounding perhaps to the nearest dollar, the nearest ten dollars, or the nearest hundred dollars, perhaps even the nearest thousand dollars. Certainly, one would have thought the maxim would apply if the one document stated a number of cents and the other document omitted any reference to cents. Here, the difference between the two documents is small but apparently material. It is plainly not the result of a clerical error misstating one digit or transposing a digit, nor is it the result of any rounding process. The difference seems to be the result of a small but material difference in calculation as to the value claimable for works at the relevant time as between the builder and the architect. That a claim such as the present should founder on so trivial a point seems a scandal to the law, yet it appears to be the result of the words which the drafter of the standard form chose, and which the parties saw fit to adopt. Again, as [junior counsel for Di Stasio] observed, there would seem to be no time limit for the rendering of the tax invoice. It would, on the face of it, have been open to R & K at any stage prior to the end of the trial to have rendered a tax invoice 'equal in value' to the architect's certification. The only consequence, except perhaps as to costs in the proceeding, would be upon the interest claimable. This step would of course be subject to R & K's obtaining leave to make a further amendment to its statement of claim.[25]

26 There having been no further relevant tax invoice rendered, and no application for leave to amend, the result was that the demand based on Progress Claim 2 failed.[26]

27 Relevantly, the judge also rejected an alternative claim by R & K in quantum meruit based on a frustration of the contract arising from the architect's failure to certify. As the judge observed, in the case of Progress Claim 2 the architect had certified but it was R & K who had not rendered a tax invoice in accordance with that certification. Further, the requirements for establishing a basis for claiming on a quantum meruit had not been met: an enforceable contract had been made and remained on foot. The judge remarked that:

A builder under a building contract is not at liberty simply to elect to claim upon a quantum meruit rather than in accordance with the terms of the contract.[27]

28 It appears that no orders were pronounced after the trial. In delivering the initial reasons on 19 May 2017 the judge directed the parties to prepare short minutes of orders within 14 days. R & K filed its application to reopen before the expiry of the 14-day period (2 June 2017).

(2) R & K's reopening application - the June ruling

29 On 2 June 2017, R & K filed a summons (dated 1 June 2017) seeking the following orders:

1. The plaintiff have leave to amend its statement of claim.

1. The plaintiff have leave to reopen its case and adduce evidence and make submissions.

3. Such further or other order/s as the Court deems fit.

4. The costs of this summons be the plaintiff's costs in the proceeding.

30 On the return of the summons on 16 June 2017, R & K was represented by senior and junior counsel, whereas, as mentioned, at the trial it was represented by its solicitor alone. Di Stasio continued to be represented by junior counsel alone. R & K invited the judge to exercise his discretion to allow an amendment of the statement of claim to plead the new invoice, issued and served on Di Stasio after the trial, and a plea asserting a claim based upon that invoice. It was urged upon the judge that if that application were allowed, there would be a 'relatively straightforward process'[28] to reverse the outcome of the trial by proving the service of the new invoice.

31 In the June ruling, the judge referred to statements made by Ferguson J in CC Containers Pty Ltd v Lee [No 5][29] in which her Honour mentioned the four recognised categories of case identified by Kenny J in Inspector-General in Bankruptcy v Bradshaw,[30] where a court may grant leave to reopen, as approved by this Court in Spotlight Pty Ltd v NCON Australia Ltd:[31]

In the course of her judgment, Kenny J noted that there are four recognised classes of case in which a court may grant leave to reopen as follows:

(a) where fresh evidence, unavailable or not reasonably discoverable before, becomes known and available;

(b) where there has been inadvertent error;

(c) where there has been a mistaken apprehension of the facts; and

d) where there has been a mistaken apprehension of the law.

These classes are not closed and the overriding principle is that leave to reopen will be granted if, taken as a whole, the justice of the case favours such a course.[32]

32 The judge noted that here the application to reopen was based upon an apparent mistaken apprehension of the law by R & K's solicitor during the trial:

[Senior counsel for R & K] submitted that an analysis of what occurred here would indicate a mistaken apprehension of the law on behalf of the plaintiff's representative at trial. He said that such a misapprehension, if indeed it was a misapprehension, could have been based on at least two and perhaps more views of the law on the subject. The first being that the greater includes the lesser, and since the claim [in] the tax invoice which the plaintiff relied upon was less than the amount certified by the architect, it could be regarded as equivalent in value for that reason. Secondly, that the provisions as to the certification and the provision of the tax invoice could be regarded as machinery provisions which are not conditions precedent to payment.[33]

33 The judge then referred to the submissions made by junior counsel for Di Stasio opposing the amendment, including the disruptive impact of late amendments upon both the litigants and the court system more generally. It was submitted that R & K was seeking an indulgence to be relieved of a forensic decision made at trial to run its case in a particular way, notwithstanding that the issue of the certificate and the tax invoice had been raised by both Di Stasio's junior counsel and the judge during Hartman's cross-examination. Junior counsel for Di Stasio also pointed out that the statement of claim had been amended to adopt the different figure for Progress Claim 2, indicating that, as mentioned,[34] R & K had, at the pleading stage, turned its mind to the issue.

34 Before the judge, R & K submitted that the equal in value issue had not been squarely raised in the defence. The judge remarked:

[Senior counsel for R & K], however, said that the point about the tax invoice was not squarely raised in the pleadings. He noted there was a denial or non-admission as to architect certification, but no express statement in any version of the defendant's defence that the claim relative to progress claim 2 should fail for lack of a tax invoice of equivalent value to the architect certification. [Junior counsel for Di Stasio] said that denial of architect certification necessarily entailed a denial of all subsequent steps in the process including the issue of a tax invoice.

[Senior counsel for R & K] said that on that state of pleadings, the issue was raised squarely for the first time in closing submissions.[35]

35 The judge agreed with the argument that if a deliberate forensic decision had been made by R & K's solicitor at trial not to take steps to have a new invoice issued, then his client could not be relieved of the consequences. However, he accepted that the correct view was that the step of issuing a new invoice was 'simply not thought of' at the time.[36] This brought the circumstances within the category of an 'inadvertent error', identified by Kenny J in Bradshaw as one of the recognised classes of case in which a court may grant leave to reopen:

In my view, both on the basis of what I have been told today and having had the advantage of observing the representatives of the parties conduct the trial before me, the most likely explanation of why this application was not made [at] an earlier stage, at the very least before the end of the trial, is the one advanced by [senior counsel for R & K]. It was inadvertence. Being of that view, I conclude that the forensic decision point is not an absolute bar to the success of the present proceeding.[37]

36 The judge considered the principle of finality. He considered it was possible, but not probable, that if the equal in value issue had been raised clearly at the trial, the proceeding would have resolved. He did not accept that 'this particular matter was the hinge on which the outcome of the entire proceeding turned ... either having regard to intrinsic importance or based upon some view that it was a vital piece of the overall puzzle'.[38] He treated the proposed amendment as raising only 'the completion of a formal step',[39] a step that was nevertheless vital and would not take up a great deal of court time. He considered that 'there is a plain justice to the plaintiff's claim on this particular point'.[40] He concluded:

To leave the plaintiff unremunerated for the work comprised in progress claim No 2 in the second contract for the sole reason of the lack of a tax invoice would, in my view, be a manifest injustice which calls out for remedy and I believe that that remedy can be had at a cost which is not exorbitant or unreasonable relative to the parties' positions or the court's resources. In those circumstances, I believe that the application should succeed on those points.[41]

(3) Di Stasio's reopening application - the September ruling

37 Following the delivery of the June ruling, the legal representatives for Di Stasio (now both senior and junior counsel) raised a concern that the judge may have been misled by the statements of senior counsel for R & K that the defence did not squarely raise a plea about the equal in value issue and that the issue was only raised clearly in closing submissions.[42] A summons was filed on behalf of Di Stasio on 27 June 2017 (dated 23 June 2017) seeking the following orders:

1. The plaintiff's summons filed 2 June 2017 be reinstated or re-listed for further hearing.
2. The defendant have leave to amplify its submissions on the hearing of the said summons by referring to the terms of the pleadings on which the trial was conducted, and in particular to:

(a) paragraph 11(c) of the Defence to Amended Statement of Claim dated 21 August 2015;

(b) paragraph 3 of the Reply to Defendant's Defence to Amended Statement of Claim dated 21 October 2015; and

(c) paragraph 12(b) of the Defence to the Further Amended Statement of Claim and counterclaim dated 3 October 2016.

1. The orders pronounced orally ex tempore on the hearing of the said summons on 15[[43]] June 2017 be set aside and in lieu thereof it be ordered that the said summons be dismissed with costs.

4. Such further or other directions or orders as the Court deems fit.

38 An affidavit in support of the application sworn by Di Stasio's solicitor exhibited a letter sent to R & K's solicitors dated 19 June 2017, in which it was noted that junior counsel for Di Stasio had raised with senior counsel for R & K the issue of the accuracy of the submissions made to the judge, and explained that Di Stasio's junior counsel did not take the judge to the actual pleading because he had assumed that the judge was familiar with that pleading. The letter relevantly stated:

[Junior counsel for Di Stasio] responded to [senior counsel for R & K's] points ... in a general sense and denied the accuracy of [senior counsel for R & K's] submissions that the pleadings did not raise the matter. Unfortunately, he did not take his Honour directly to any part of the defence. [Junior counsel for Di Stasio] presumably assumed he did not have to because his Honour would have been as familiar with the pleadings as he was. [Junior counsel for Di Stasio] was also entitled not to labour the point because the burden of proving to his Honour whether or not the decision not to issue an invoice was a forensic one lay with the applicant, not the respondent.

39 R & K's solicitor also filed an affidavit in which he deposed that he did not make a forensic decision at trial not to have an equal in value tax invoice prepared. He made his final oral submissions at trial without having been served with Di Stasio's written closing submissions and had regarded [12(b)] of the defence as a 'jumble of assertions' which he understood only denied that the documents had been served on R & K and which he did not understand as raising the equal in value issue. The solicitor said:

I did not make a 'forensic decision' not to have the plaintiff prepare and submit an invoice equal in value to the amount certified by the architect. ... in view of the actual conduct of the defendant at trial, of its oral submissions, and of the pleadings, I did not consider that 'not equal in value' was the point that the defendant was making.

40 The same junior counsel, who had appeared for Di Stasio throughout the proceedings below, swore an affidavit in which he deposed that he did not recollect Di Stasio's pleadings sufficiently to correct any statement made by senior counsel for R & K:

In my preparation for the hearing on 16 June 2017 I mistakenly assumed familiarity with the pleadings and did not re-read them for the purposes of the application. During the course of the hearing on 16 June 2017, [senior counsel for R & K] made statements about the pleadings, but also said that he had not read them. I did not recollect the pleadings sufficiently to challenge the statements about them which [senior counsel for R & K] ... had made. I was called to the Bar on 22 October 2015. It did not occur to me that senior counsel for the plaintiff might make incorrect statements about the pleadings during the hearing, or that [the solicitor for R & K], who was counsel at the trial and who was instructing [senior counsel for R & K] would allow incorrect statements to go uncorrected.

41 The judge permitted Di Stasio's summons to be argued. After hearing argument, and having regard to the affidavit sworn by junior counsel for Di Stasio, the judge acceded to the application that the June ruling be set aside. That hearing took place on 12 September 2017, following which the judge delivered ex tempore the September ruling.

42 In the September ruling, after summarising the submissions of senior counsel for R & K made on 16 June 2017 about the defence and after referring to the actual terms of [12(b)] of the defence,[44] the judge noted that senior counsel for R & K submitted that he had 'been unfairly and inappropriately blamed for any misinformation as to the pleadings'[45] since it was common ground that when he appeared on 16 June 2017 he said that he had not read the pleadings. Senior counsel for R & K informed the judge that he had relied on the written outline of submissions prepared by junior counsel for Di Stasio, which had caused 'confusion and misinformation'.[46] Those written submissions contained the following statements:

1. Relevantly, the plaintiff pleaded in both the Amended SOC [Statement of Claim] and the SFASOC [Second Further Amended Statement of Claim] that it had:

(a) issued the second progress claim in accordance with the terms of the contract; and

(b) the architect had issued a certificate in relation to the second progress claim.

1. Mr Di Stasio, in the First Defence, pleaded as follows:

(a) he said the second progress claim was submitted in accordance with the terms of the Stage 2 Contract, he otherwise admitted the allegations in paragraph 7(a) above; and

(b) he denied the allegation in 7(b) above.

1. The defendant, in the Second Defence, pleaded as follows:

(a) it admitted the allegation in 7(a) above; and

(b) it denied the allegations made in paragraph 7(b) above.

43 On the appeal it was accepted that there was a difficulty in understanding what these paragraphs of the written submissions meant. The references to '7(a) above' and '7(b) above' do not seem to relate to [7] of the submissions; nor does the word 'above' relate to the pleadings given there were no sub-paragraphs in [7] of any versions of the statement of claim. The references to '7(a)' and '7(b)' in the written submissions thus appear to be erroneous.[47]

44 In the September ruling, the judge said that senior counsel for R & K submitted that:

it was this passage in the defendant's outline which led him to characterise the pleadings as he did, and given his denial of having read the pleadings themselves, that seems a most plausible interpretation. He also made critical reference to [junior counsel for Di Stasio's] affidavit, which explained his inadvertence, having forgotten the existence of the sub-paragraph in clause 12 of the defence which I have already read out, but omitting to claim authorship for the passages which I have read from the outline.[48]

45 The judge also noted that Di Stasio's junior counsel indicated that it did not occur to him that his opponent would misrepresent the pleading and so he did not join issue with him at the hearing on 16 June. The judge remarked:

In the result, it would seem there is inadvertence on every hand. [Junior counsel for Di Stasio] said that he did not seek to contradict [senior counsel for R & K], because it did not occur to him that senior counsel might possibly misrepresent pleadings. Of course, in the face of a declaration that senior counsel had not read the pleadings, he could scarcely be regarded as an infallible guide on the subject but [junior counsel for Di Stasio] said he regarded it as 'inconceivable' that senior counsel would misrepresent the pleadings and so did not join issue on the point.[49]

46 The judge was satisfied that at the earlier hearing of R & K's reopening application junior counsel for Di Stasio had been 'inadvertent' in describing the pleadings (just as the solicitor for R & K had made an inadvertent error in not appreciating the equal in value issue and issuing a fresh invoice before the completion of the trial).[50] He also held that the state of the pleadings was material, and this had led to R & K's reopening application having been conducted on a false premise:

There is, I believe, a materiality to what I was led to believe was the state of pleadings. It clearly does play a role, by no means a dominant role in the decision, but it would be going too far to say that it was immaterial. In those circumstances, as a result of inadvertence by counsel for the defendant, the first reopening application [R & K's reopening application] went forward on a false premise based on the state of the pleadings.[51]

47 As a result, the judge allowed R & K's application to reopen its case to be reopened.

(4) R & K's reopening application revisited - the September reasons

48 The second hearing of R & K's reopening application took place over 12 and 13 September 2017, after which the judge delivered the September reasons.[52] It is these reasons that are the primary subject of this appeal.[53]

49 During the second hearing of R & K's reopening application, the solicitor for R & K, who, as mentioned, had appeared for R & K at the original trial, was cross-examined on an affidavit he had filed. The judge revisited the transcript of the trial, and especially the cross-examination of Hartman and the closing submissions of Di Stasio's junior counsel. He also took into account the terms of the pleading in [12(b)] of the defence. He concluded that at the trial there was a live dispute over whether there had been compliance with the procedure required under the contract in respect of Progress Claim 2. He said:

These submissions [the closing submissions of Di Stasio's junior counsel] together with clause 12(b) of the defendant's Defence, make clear to my mind that the defendant was denying compliance with the procedure laid down for progress claims insofar as Progress Claim No 2 was concerned. It was therefore incumbent upon the plaintiff, in making good its case, to demonstrate compliance with each element of the procedure laid down. Insofar as [the solicitor for R & K] has suggested that this was not made clear, I reject his contention. Even a generalised denial of liability for the progress claim, much less the more detailed one in clause 12(b) of the defence, would have obliged the builder's counsel to indicate how each of these requirements of the progress payment claim clauses had been met. The builder plaintiff carried the onus of proof. Had I accepted the plaintiff's case as to Claim No 2, it would have been incumbent on me to disclose my 'pathway of reasoning' - the phrase adopted by the Court of Appeal as the test for the adequacy of reasons for judgment.[54]

50 Nonetheless, the judge continued to accept that R & K's solicitor had made an 'inadvertent' error in not appreciating the equal in value issue raised by the plea and not issuing a fresh invoice before the completion of the trial but focussing instead on whether the claim had been served on Di Stasio:

The fact that sufficient was said to raise the issue relative to Progress Claim No 2, on which the plaintiff failed at trial, renders it less likely that the person representing the plaintiff would make an inadvertent error as to this matter. It does not, however, render it impossible.

I accept [the solicitor for R & K's] evidence that he did make an inadvertent error on this point. The general trend of the evidence which he gave in the course of a lengthy cross-examination during the second reopening application was that he believed that the only issue being relied upon by the defendant relative to compliance with the procedure was service of the claim upon the defendant. The evidence showed that it had been handed to the architect and not delivered to the defendant ...

It is perhaps unsurprising that [the solicitor for R & K] allowed himself to concentrate upon these other irregularities and difficulties with the process attending Progress Claim 2 and simply ignore the failure of the plaintiff to issue a tax invoice equal in value to the sum certified by the architect. There is no obvious reason why, other than by reason of inadvertence, he would have allowed this point to 'go through to the keeper'.[55]

51 He rejected the view that the failure to confront the equal in value issue was designed to assist, ultimately, reliance on a quantum meruit claim.[56]

52 The judge observed that R & K's solicitor appeared mistakenly to consider that substantial compliance would be sufficient to satisfy the mandatory procedural steps in the contract. He also emphasised that a party is bound by a forensic decision made by it at trial. He nonetheless accepted that it was inadvertence on the part of R & K's solicitor which led him to ignore the equal in value issue:

[The solicitor for R & K] went to some lengths to deal with the issue of service of Progress Claim No 2 and succeeded in persuading me that this element of the contractual process required for the progress claim had been satisfied. Why, apart from inadvertence, would he have ignored the other element - viz the issue of a tax invoice equal in value? Again, if he had not failed to advert to the significance of this matter, even although I believe he should have, he could have urged matters upon me, such as that an invoice for an amount less than what was certified by the architect could be regarded as equal in value because the greater amount certified by the architect could be regarded as encompassing the lesser amount invoice, or that this clause was a mere mechanism and not a mandatory pre-condition to liability. [The solicitor for R & K] carries on a sole practice. At trial he was without the assistance of an instructor.[57]

53 After expressing 'the gravest concerns' about countenancing applications to reopen, the judge concluded that, notwithstanding those concerns, he was still prepared to grant R & K's application to reopen and to adduce evidence of the new invoice:

[T]he present application does not, I think, merit the strictures which the authorities have delivered with respect to others. It is, as I have explained, a matter of pure inadvertence. The material necessary to make good the deficiency in the plaintiff's case was, in very short compass an invoice and an affidavit from the plaintiff's principal, Mr Hartman. This stands in contrast to the sort of elaborate financial evidence which would have been necessary had the reopening in Spotlight v NCON been allowed. In Bradshaw's case, the evidence of damage and loss sustained by the Commonwealth would, no doubt, have required relatively elaborate evidence. The present case is one of the satisfaction of a simple formality. In Bradshaw's case, it seems the Commonwealth, for some practical reason of expense, logistics or otherwise had deliberately decided to dispense with the evidence which it later sought to add.

It is also a matter of simple justice. No argument other than the bare technicality has been urged against the plaintiff's entitlement to be paid on this progress claim.[58]

54 The judge dealt with the merits of the claim 'on the papers' and delivered his judgment on 13 November 2017. He recorded that the parties agreed that as a result of his decision to allow R & K to reopen its case and rely on the new invoice, there should be judgment for the amount of Progress Claim 2, less an amount already paid directly to a subcontractor. The amount agreed by the parties was $110,271.41 inclusive of GST before interest and before any set-off for a counterclaim brought by Di Stasio for making good defective work.[59]

55 The judge took into account the submissions of the parties on the issue of costs of the proceeding including the costs of both reopening applications.[60] In particular, the judge considered an application by Di Stasio that the costs of the proceeding should be assessed without taking into account the amounts recovered by R & K as a result of being granted the indulgence of reopening its case and relying on the new invoice. On that basis, the amount ultimately recovered by R & K after taking into account the offset for the counterclaim, would be $13,408.46 inclusive of interest,[61] which would be less than half of the jurisdictional limit of the Magistrates' Court. Any costs order against Di Stasio should therefore be made on Magistrates' Court Scale 'D.' Further, taking into account an Offer of Compromise that Di Stasio would pay $30,000 inclusive of costs to R & K, and a Calderbank offer to the same effect, R & K ought pay Di Stasio's costs from the date of the Offer of Compromise on an indemnity basis.

56 The judge rejected Di Stasio's submissions. He held that the costs should be determined on the basis of the ultimate substantive disposition; that is, the case as amended and the evidence as tendered:

The reopening was no doubt an indulgence, but it was an indulgence as to a matter which might be regarded as the merest technicality not a technicality imposed by statute between the commercial party and a consumer Parliament saw as entitled to special protection, but rather deriving from the terms of a contract between two commercial parties. R & K had a strong moral claim to the amount which it sought for Progress Claim No 2. In those circumstances, I believe it is appropriate to consider the ultimate outcome for the purposes of making the costs determination in this proceeding.

It is inappropriate, I think, to consider what might have happened had there been a costs application based solely upon the outcome in the principal judgment [that is, the initial reasons]. No doubt, R & K would have pressed to have its reopening summons heard before such an application was made though, in the event, it did not come to that. The question of costs is being determined here, as is customary, after there has been a final determination of the substantive issues. I will consider the costs outcome based upon the ultimate substantive disposition of the proceeding.[62]

57 The judge was also of the view that all of the costs pertained to a single dispute in which R & K was the ultimate winner, and that costs should follow the event. As a result, the judge gave judgment in the following terms:

1. There be judgment for the plaintiff [R & K] against the defendant [Di Stasio], after taking into account the defendant's counterclaim, in the sum of $96,452.15, inclusive of interest.
2. The defendant pay the plaintiff's costs of the proceeding to be assessed in default of agreement on the standard basis.
3. The plaintiff pay the defendant's costs of and incidental to the plaintiff's summons dated 2 June 2017 [R & K's reopening application].
4. The defendant pay the plaintiff's costs of and incidental to the defendant's summons dated 23 June 2017 [Di Stasio's reopening application].

58 It is convenient to consider each of the grounds of appeal.

The principle of finality: was there inadvertence or neglect? - Ground 1(a) & (b)

59 Di Stasio submits that the judge's decision to allow R & K to reopen its case subverted the principle that there must be finality in litigation, a principle supported by the public interest. It submits that the judge, by allowing a party on the basis of inadvertent error to recast its case after having the benefit of the judge's reasons, undermined the principle of finality. Di Stasio submits that, when assessing whether it is 'in the interests of justice' for a party's case to be reopened, a distinction needs to be made between applications to reopen made pre-judgment and those made post-judgment. Where judgment has been delivered, the circumstances must be exceptional before leave to reopen will be granted. This was recognised by this Court in Spotlight:

There are good reasons why the circumstances must be exceptional before a court may allow a case, having been closed and judgment reserved, to be reopened. The need for finality in litigation is one. It is no answer to this point to say that the further evidence sought to be adduced by the respondent in this case is confined to the quantum of damages. Were applications to reopen to be allowed almost as of course, such applications would be regularly made. That would add enormously to inefficiencies in the administration of justice, even if the reopened hearing was strictly confined. The discipline which ought to attend the conduct of litigation by highly competent litigators would also inevitably decline.

The very strict rule that, subject to any applicable process of appeal or review, the presentation of their cases by parties to litigation must conclude with the end of the trial, has another important justification. It is that, very often, the boundaries of the reopened issues would be hard to define and as difficult to protect. The reopened hearing would then be bedevilled by arguments about whether one party or the other was seeking to take advantage of the reopening to polish parts of its case which were more or less within the scope of the reopened proceeding but not clearly on one side or the other of the prescribed limits.[63]

60 Di Stasio contends that a failure by a party or its legal representative to appreciate an opponent's argument has never been a ground to justify reopening once judgment had been delivered. In an adversarial system a judge adjudicates the case which is brought before him or her, and a party is bound by the decisions it makes about how it runs that case. Where judgment has been delivered, the focus of a reopening application is on whether the discretion should be exercised because the process of adjudication has gone astray. That does not include a situation where a party is simply seeking, post judgment, to fortify its case by calling additional evidence when it failed to put in such evidence due to a misapprehension of the facts or the law attributable solely to the neglect or default of the party seeking the rehearing or its legal representative. Were that to be allowed, the courts would be inundated by dissatisfied litigants attempting to rectify the gaps or inadequacies of their case identified in reasons for judgment. In such circumstances there are other avenues for dissatisfied litigants to seek compensation. It is therefore only in exceptional circumstances, where it is the court which has been misled, where an application to reopen post-judgment should be granted.

61 Di Stasio points to the remarks of Mason CJ made in Autodesk Inc v Dyason [No 2][64] when dealing with an application to vacate the judgment before it was entered, on the ground that the applicants did not have an opportunity to be heard on certain issues. The Chief Justice noted the need to approach applications to reopen with caution given the principle of finality of litigation, while also ensuring that the proceedings have not miscarried:

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. It is true that the jurisdiction is to be exercised with great caution, having regard to the importance of the public interest in the finality of litigation. It is equally true, as this Court said in Wentworth v Woollahra Municipal Council, that '[g]enerally speaking, it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard.'

But these statements do not exclude the exercise of jurisdiction to reopen a judgment which has apparently miscarried for other reasons, at least when the orders pronounced have not been perfected by the taking out of formal orders. So much was acknowledged by Brennan, Dawson, Toohey and Gaudron JJ in Smith v NSW Bar Association when their Honours said: 'if reasons for judgment have been given, the power is only exercised if there is some matter calling for review.' It is sufficient to give three examples. In In re Harrison's Share under a Settlement, orders were set aside following a decision of the House of Lords which overruled authorities on the basis of which the orders had been made. In New South Wales Bar Association v Smith, the New South Wales Court of Appeal reconsidered orders previously made in view of an argument that the Court had mistakenly assumed that particular evidence had not been given at earlier hearings. And, in Pittalis v Sherefettin, a judge recalled orders the day after they were made upon determining that he had 'erred in a material matter in his approach to the case'.[65]

62 The Chief Justice acknowledged that the exceptional step of reopening a case after judgment has been delivered may occur when the court has proceeded on a misapprehension as to the facts or the law that is not attributable to the neglect or default of the party seeking to reopen:

These examples indicate that the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that, in its earlier judgment, it has proceeded on a misapprehension as to the facts or the law. ... However, it must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to reargue their cases.[66]

63 The Autodesk principle was applied in Davis v Insolvency & Trustee Service Australia [No 2].[67] In Davis the Court refused an application, made prior to its judgment being entered, for it to consider its judgment afresh, based upon the claim that the applicant did not have the financial ability to meet a debt for child support in circumstances where the applicant had failed to adduce such evidence despite being given an explicit opportunity to do so at the hearing. An indulgence would not be granted to a losing party to repair its case by adducing better evidence. The Court said:

The public interest in the finality of litigation does not permit the losing side to reopen a case just because, in retrospect, it can be seen that better evidence about some matter in dispute might have changed the result. Were it otherwise, there would be no end to litigation. It is for that reason that the passages cited above from Autodesk Inc v Dyason (No 2)[[68]] emphasise that an applicant for a rehearing is obliged to show not just that the Court's original factual conclusion is incorrect but that the Court's misapprehension of the facts 'cannot be attributed solely to the neglect or default of the party seeking the rehearing'.[69]

64 Di Stasio contends that the authorities show that there is a hardening of attitude in applying the principle of finality commensurate with the lateness in the stage of the proceeding at which an application is made. An application to reopen a case during the running of a trial to deal with a matter inadvertently overlooked, for example, where a document is forgotten or a question during cross-examination is missed, is quite different to the position where reasons for judgment have been delivered but final orders have not yet been made.[70]

65 Di Stasio submits that in the present case there was nothing that led the process of adjudication to go astray. The new invoice did not exist at the time when R & K was running its case, so there was no question of R & K failing to serve it on Di Stasio or to tender it at trial, nor did the judge make any mistake as to the facts or the law. R & K's solicitor, an experienced legal practitioner, knew that the discrepancy between the documents was an issue because it had been raised by Di Stasio in its defence, in [12(b)],[71] but he failed to act until after the initial reasons were published. The case run by R & K before the judge was that the absence of an invoice matching the certificate did not matter. The fact that the solicitor failed to appreciate the significance of the pleaded defence was not to the point; clearly, the judge did.

66 Di Stasio submits that R & K made a deliberate decision, or adopted a strategy, as part of its case run below, not to take steps to issue an invoice that was compliant with the process prescribed under the contract because it was seeking to rely on a claim in quantum meruit. R & K should be bound by that decision. This choice, and its consequences, were the subject of closing submissions at trial by junior counsel for Di Stasio. He referred to the evidence that demonstrated there were conflicting figures in the various invoices and the architect's certificate, with the result that there was not compliance with the process required under the contract and Progress Claim 2 was never finalised. The following exchange occurred:

[Di Stasio's junior counsel]: And it is still within the power, I submit, of the plaintiff to comply with that process.

HIS HONOUR: At any rate, the evidence is in and it doesn't demonstrate compliance at this stage you submit.

[Di Stasio's junior counsel]: That's right, so what is being sought to be done here in bringing this proceeding, Your Honour, I respectfully submit the plaintiff is seeking to subvert the contractual process it agreed to, and seeking to use the court's processes to pursue a payment claim which it doesn't exercise fully.

HIS HONOUR: So what is the legal consequence of that failure to carry out the steps provided for the recovery of remuneration under the contract by the builder?

[Di Stasio's junior counsel]: No liability arises under the contract for that payment.

67 Notwithstanding the possibility of R & K taking the step of issuing an invoice being canvassed before completion of the trial, R & K's solicitor still did not act.

68 Junior counsel repeated his submission that R & K was attempting to circumvent the process required under the contract by seeking to rely on a claim in quantum meruit. A further exchange took place:

[Di Stasio's junior counsel]: It is respectfully submitted, Your Honour, that it is still open to proceed down the course and comply with the contract to enforce their entitlement and always has been.

HIS HONOUR: Except of course the evidence of both parties has closed so if something were done this afternoon, since the cases are closed I couldn't pay any heed to it.

[Di Stasio's junior counsel]: No, you couldn't, Your Honour, and it would be a question of whether an issue estoppel would arise if that payment wasn't made.

HIS HONOUR: Correct.[72]

69 The judge ultimately found that R & K's solicitor ought to have understood [12(b)] of the defence and engaged with it.[73] In this context, Di Stasio submits it is significant that there was an adjournment of several months after Hartman gave his evidence and before the trial resumed.[74] This provided a window of opportunity during which R & K's solicitor could consider the matters that had been put and serve a proper invoice. But no steps were taken at that stage. Di Stasio submits that, given the judge's finding that the solicitor ought to have understood the case being made by Di Stasio, the failure of R & K to issue an invoice that complied with the contract at least before the completion of the trial was not a matter of true 'inadvertence' in the sense of a mere accidental oversight or slip, but a matter of obtuseness or neglect on the part of the legal representative, for which it submits, there are alternative means of compensation.[75]

70 Di Stasio submits that it is clear that the judge misdirected himself by putting to one side the manner in which R & K actually ran its case and instead dealing directly with what he identified as the underlying merits of Progress Claim 2 which he considered lay with R & K. He considered himself to be righting a wrong that had arisen merely by way of a technicality. Di Stasio contends that the judge therefore allowed an irrelevant matter to guide him when he exercised his discretion and that his discretion thus miscarried in accordance with the principles in House v The King.[76] R & K made the significant decision to run its case on the basis of seeking payment of progress claims under the Stage 2 contract, rather than seeking a final judgment sum. A builder who opts for this shortcut method by suing for progress claims based on the obligations under the contract to make immediate payment avoids any disputes about variations or breach of contract. The focus of this procedure is on ensuring the solvency of the builder during the currency of the contract. But in so relying on this approach the builder is required to comply strictly with the contractual procedure for claiming payments. R & K did not comply, and given that its attempt to remedy that situation was too late, Di Stasio submits, it should be bound by the way it decided to run its case.

71 In response, R & K submits that Di Stasio has not been able to establish any error in the judge's exercise of his discretion as required by House v The King. In accordance with established principles,[77] the judge accepted that there had been an inadvertent error on the part of R & K's solicitor, based upon or accompanied by a mistake in the understanding of Di Stasio's pleading. Further, R & K submits, the overriding principle is whether, taken as a whole, the justice of the case favoured leave being granted to reopen. The judge concluded that it did. This was a value judgment which his Honour was well placed to make, particularly where the initial consequence of failure to issue an equal in value invoice resulted in an outcome that the judge described as 'a scandal to the law'.[78] The decision by the judge to allow R & K to rely on the new invoice led to a just result. It was also a means of rectifying matters in a simple and inexpensive manner in accordance with modern views about the proper conduct of litigation, rather than requiring R & K to go through an appeal process.

73 It is useful to consider carefully the example of De L v Director-General, NSW Department of Community Services [No 2][79] where the High Court had previously ordered costs against the Director-General in favour of the applicant, De L.[80] Before judgment was entered, the Director-General applied to have the costs order made against him vacated on the basis that the order had been made without regard to reg 7 of the Family Law (Child Abduction Convention) Regulations (Cth). This provided that a person such as the Director-General who exercised the powers and performed the functions of the Commonwealth Central Authority should not be subject to any order to pay costs in relation to the exercise or performance of such powers or functions. Neither the Director-General nor the Attorney-General, as intervener, had referred to that regulation during the course of submissions. Ultimately the Court concluded that reg 7 would not have prevented such a costs order being made. However, had it been necessary for the Court to determine the request to reopen, Toohey, Gaudron, McHugh, Gummow and Kirby JJ would have permitted the Director-General to reopen his case.[81]

74 The Court reinforced the principles governing the grant of leave to a party to reopen its case before the entry of judgment. Those principles underscored the importance of the court making an evaluative assessment of what the interests of justice require:

The power of this Court to reopen its judgments or orders is not in doubt. The Court may do so if it is convinced that, in its earlier consideration of the point, it has proceeded 'on a misapprehension as to the facts or the law', where 'there is some matter calling for review' or where 'the interests of justice so require'.[82]

75 The Court also observed that the party seeking the grant of leave to reopen should establish that it had acted without fault or neglect, given the exceptional nature of the jurisdiction, but that accidents and oversights can occur which, if not repaired, can cause injustice:

It has been said repeatedly that a heavy burden is cast upon the applicant for reopening to show that such an exceptional course is required 'without fault on his part', ie without the attribution of neglect or default to the party seeking reopening. By such expressions of the power to reopen final orders, courts seek to recognise competing objectives of the law. On the one hand, there is the principle of finality of litigation which reinforces the respect that should be shown to orders, final on their face, addressed to the world at large and upon which conduct may be ordered reliant upon their binding authority. On the other hand, courts recognise that accidents and oversights can sometimes occur which, unrepaired, will occasion an injustice.[83]

76 The Court considered it important that the application to reopen occurred before the orders were perfected, it was made promptly, and the oversight of the reg 7 issue occurred by accident:

[W]e believe that this is a proper case in which to permit reopening. An important consideration is that the orders of this Court, although publicly announced, were not perfected. That is, the formal entry of the orders in the Court's records was not made before the present motion was filed. ... Courts have always treated differently applications to reopen final orders which, although pronounced publicly, have not been finally entered in the Court's records. Different considerations arise when this latter step has been taken.

The oversight of reg 7 occurred by accident. The focus of submissions was, naturally enough, upon the substance of the contest, in which there were several points of difficulty. The Court did not address specific questions on costs either to counsel for the Director-General or counsel for the Attorney-General, intervening. Even assuming that the general costs discretion applied, it has been exercised without regard to the possible application of reg 7 and the purposes for which the regulation was made. For economy and efficiency, the Director-General, sensibly enough, left most of the argument of the appeal to the Solicitor-General, appearing for the Attorney-General. The application to vacate the costs order was made promptly. ...[84]

77 Ultimately the Court approved the reopening of its orders, had that course had any utility, 'to safeguard against the risk of injustice':[85]

Save, therefore, for the question of the utility of reopening the Court's orders, now to be addressed, and any relevant residual matters of discretion affecting the provision of relief, we would favour, in the particular circumstances of this case, reopening the costs order to safeguard against the risk of injustice that could flow from the unconsidered making of an order on its face apparently contrary to the requirements of reg 7.[86]

78 The Court viewed as a separate question whether, if it granted leave to reopen, it should disturb its earlier orders; it described this as 'the discretionary issue' in contrast to 'the reopening issue'.[87] It queried whether relief should be ordered where a party had not done all it should to raise an issue at the relevant time. It reinforced the proposition that judges are in general entitled to rely upon legally represented parties to defend their own interests:

It is one thing to permit reopening of the orders to allow consideration of a matter accidentally overlooked so that it may be taken into account. It is another to provide relief where the party seeking it has, by its own confession, not done all that might have been done to raise the point when it was timely and appropriate to do so. Especially in this Court, judges are entitled to look to the parties, at least where they are legally represented, to defend their own interests and to alert the Court to any claimed immunities which rest upon legal provisions. That was not done here.[88]

79 Ultimately it determined that '[i]n the circumstances, in the view which we favour as to the operation and validity of reg 7, the discretionary question does not have to be addressed.'[89]

80 In my view, here the assessment made by the judge that the merits of Progress Claim 2 lay with R & K was appropriate and proper. It was by no means an irrelevant consideration within the meaning of House v The King; that is, one that the judge was prohibited from taking into account.[90] Quite to the contrary. The need 'to safeguard against the risk of injustice' is the very consideration that the High Court emphasised as pivotal to determining an application to reopen.[91] The judge was aware that responding to R & K's application to reopen required an evaluation of the competing merits of the equal in value issue as well as the stringency of the compliance with the contractual procedure asserted by Di Stasio. The judge considered that it was a 'scandal to the law' for a discrepancy of such a small magnitude to invalidate Progress Claim 2.[92] Although he concluded in the initial reasons that the discrepancy was nevertheless material, it is clear that he considered that there was the potential to repair the discrepancy and that, in the interests of justice, if the potential was realised, as it was by means of R & K's application to reopen and the tendering of the new invoice, it should be so repaired.

81 More generally, while, in determining an application to reopen, it will be relevant that reasons have been delivered, and not simply that the hearing has been completed,[93] this is not to suggest that it is impermissible for a judge to take into account the underlying competing merits of the principal controversy before the court. I do not consider that there is a 'hardening' of approach to the question of whether a party should be allowed to reopen its case depending on whether reasons have been delivered in the sense that the justice of the underlying matter is then to be ignored. Nor does the recognition of the importance of the underlying merits undermine the adversarial system of justice; a judge cannot be blind to 'what the justice of the case ... requires'[94] because reasons have been delivered.

82 Moreover, I consider that the submission of Di Stasio that the circumstances should be characterised as 'neglect' rather than 'inadvertence' is flawed. As mentioned, an accidental or inadvertent failure to address an issue may be a proper basis for the grant of leave to reopen, as De L illustrates. Di Stasio characterises R & K's solicitor's failure to address the equal in value issue, or serve an invoice for the sum certified by the architect during the hearing rather than post-judgment, not as 'inadvertence' but as 'neglect', a form of disentitling conduct. However, in my view, characterising the conduct as neglect fails to reflect what actually occurred at trial.

83 First, it is important to recognise that the judge rejected the view that R & K had engaged in a deliberate strategy of failing to issue an appropriate invoice before the completion of the trial.[95] The transcript of the trial does not support the view that there was a calculated forensic decision made by R & K's solicitor, and the judge was well aware of that. Secondly, it cannot be concluded that [12(b)] of the defence[96] descended to any level of particularity with respect to the discrepancy in quantum between the architect's certification and the invoice served; that paragraph merely repeated the terms of cl N6.1 of the contract[97] without clearly identifying the manner in which R & K was alleged not to have conformed with it. Thirdly, [12(b)] is a rolled-up claim and covers not only Progress Claim 2, but also the third and fourth progress claims for which there were no certificates provided by the architect.[98] The judge characterised as 'inadvertence' the failure by the solicitor to understand the force of [12(b)], or to address the equal in value issue because the solicitor misconstrued it as an issue relating to service. In the circumstances, I consider that it was open to the judge to characterise these failures as 'inadvertence' rather than 'neglect' because they were premised upon a lack of understanding or a misapprehension; it was not a matter of the solicitor failing to act diligently to complete steps he knew he ought to take.

84 Furthermore, the decision by R & K to make its claims based on progress payments rather than a demand for a final judgment sum is of little moment. The judge found that the obligation under cl N6.1 is mandatory. He upheld the strictness of the regime. The service by R & K of the new invoice, its application to amend its pleading, reopen its case, and adduce evidence of the new invoice, were all prompted by an intention to comply with the strict regime. It was not submitted that the category of inadvertent error, as a basis upon which a court may exercise its discretion to permit a party to reopen its case, has no place in the context of demands based upon a regime of progress payments. That being so, the strictness of the regime does not detract from the recognition that, in the circumstances of this case, it was open to the judge to determine that the failure to serve an invoice equal in value was a species of inadvertent error sufficient to justify permission to reopen.

Did the judge ignore prejudice or apply the wrong test? - Ground 1(c)

86 Di Stasio submits that the judge, in permitting R & K to reopen its case, ignored the substantial material prejudice Di Stasio would suffer in the form of the lost opportunity to resolve Progress Claim 2 before trial and the avoidance of adverse costs consequences. It was put to considerable trouble and expense in defending the claim in respect of Progress Claim 2 as R & K had pleaded it and in the manner in which it was run at trial, which was without merit, as the judge found. On the appeal, it is submitted that it was this claim (that is, the claim as run at trial) upon which counsel for Di Stasio gave his pre-trial advice. Had an invoice in the proper form been in existence and served on Di Stasio, the legal advice it would have received would have entirely different; it would have been advised to approach settlement discussions on the basis that it was most likely liable for the payment of Progress Claim 2. Di Stasio contends that the judge did not consider this form of prejudice when reaching his decision.

87 The issue was alluded to by Di Stasio in the written submissions it handed to the judge during R & K's reopening application:

1. In the event that the plaintiff brought itself in compliance with the Stage 2 Contract by issuing the relevant invoice against the architect's certificate the defendant's defence to this claim would have had no merit and it is likely that the conduct of this proceeding by the defendant would have been entirely different.

1. It is submitted that, in reliance on Bradshaw, the following factors militate against the grant of leave in these circumstances:

...

(c) The defendant pleaded and prepared its case on the basis that no invoice existed which would trigger the liability of the defendant pursuant to the contract. If such an invoice did exist, the defendant would have conducted its case differently. Indeed, it is entirely reasonable to speculate that it is likely the matter would have settled at a much earlier stage thereby avoiding the bulk of the costs of the proceeding if not all.

88 And under the heading 'Prejudice' the written submissions included the following:

1. If the plaintiff had properly assessed [its] case [at] the outset, or at any stage during the course of the proceeding prior to the publication of the reasons for judgment, ... it is likely that this case would have resolved.
2. That fact that it chose not to do so, or failed to identify the opportunity to do so, has caused prejudice to the defendant by way of legal costs.

89 It further submits that, insofar as the judge considered the issue of prejudice in the June ruling, the judge applied the wrong test by reversing the onus of proof in requiring Di Stasio to prove that it would have conducted its case differently if an invoice in the proper sum had been served by R & K, and moreover, requiring that to be established as a probability. The judge also misunderstood the nature of the prejudice, which was the opportunity to resolve Progress Claim 2 prior to trial or adjust the amount of its Calderbank offer to reflect the chance of success.

90 Di Stasio submits that, in the September reasons, the judge did not refer to any prejudice that would be suffered by Di Stasio.

91 R & K submits that there was no reason to think that the judge had not taken into account the prejudice to Di Stasio in the form of the lost opportunity to resolve the dispute in relation to Progress Claim 2 and the avoidance of adverse costs consequences. The issues were clearly before him, as reflected in the written submissions.

92 In my view, it is clear that in the June ruling the judge expressly took into account Di Stasio's submission that if the correct invoice had been prepared earlier, the proceeding likely would have resolved. As mentioned above,[99] he considered that it was possible, but not probable, that if the equal in value issue had been raised clearly at the trial, the matter would have resolved:

[Junior counsel for Di Stasio] said, nevertheless, that it was an important piece of the puzzle which if clarified, as it were, in the way that the plaintiff now seeks to clarify matters, might have led to a resolution of the case. I accept that as a possibility. I am not persuaded that it was a probability.[100]

93 As noted, he rejected the view that this aspect of the proceeding was 'the hinge on which the outcome of the entire proceeding turned' and was a 'vital piece of the overall puzzle'.[101] He was of the view that the parties had 'endless things to argue about' and they did so 'at inordinate length and apart from the two periods to which I have already made reference, little was said as to Progress Claim No 2.'[102]

94 I do not accept that the judge's observations about his lack of satisfaction amount to a reversal of the onus of proof. Rather, they make it clear that the judge considered that the equal in value issue was only one of a myriad of issues that were in dispute between the parties and that, based on his knowledge of the evidence adduced at trial and the conduct of the parties in the litigation, he was not satisfied that the likely resolution of the equal in value issue would have prompted a different approach to the litigation by Di Stasio or that it would have conducted its overall case differently to any considerable degree. This explains why there was no recognition in the September reasons of actual prejudice Di Stasio would suffer by reason of the grant of leave to R & K to reopen its case.

95 In relation to the lost opportunity to adjust its Calderbank offer and Offer of Compromise, R & K submits that the judge did not have any such offers before him during the reopening applications and this submission was not made by Di Stasio. Senior counsel for Di Stasio acknowledged before this Court that junior counsel for Di Stasio below could not disclose to the judge at that stage that an offer had been made and so the judge could not have been expected to take that into account.[103]

96 In those circumstances, I reject Di Stasio's attempt to impugn the judge's exercise of discretion on the basis that he did not refer to, or take into account, the lost opportunity for Di Stasio to adjust the amount of its Calderbank offer to reflect the chance of success, when he had no knowledge of that Calderbank offer. Moreover, the judge can be taken to have been aware, even without the existence of a Calderbank offer being confirmed or its contents disclosed, that it was possible that one existed or that a different or fresh offer might have been made had the amendment been made earlier. Such possibilities were embraced within the possibility of an earlier resolution of the proceeding, to which the judge expressly adverted.[104] The judge was also aware that Di Stasio, in formulating any offers that it might seek to make to resolve the proceeding, was alive to the possibility, expressly adverted to by its junior counsel, that it remained open to R & K to serve a fresh invoice.[105] In those circumstances, the judge was not obliged to give R & K's 'loss of a chance to settle' any greater weight than he did.

Did the judge err in formulating the costs orders? - Ground 2

98 Di Stasio submits that if this Court accepts that the judge's discretion miscarried in allowing R & K to reopen its case and rely on the new invoice, then it would follow that the costs orders could not stand. So much may be accepted. However, Di Stasio further submits that even if this Court were to find the judge did not err, it would be unfair and contrary to principle for Di Stasio to bear the costs of the proceeding[106] as if the new invoice had always existed and as if R & K's case had always been run on that basis; that is, as if the amendment had occurred nunc pro tunc. Instead, it submits, the award of costs should have reflected the manner in which R & K's case was run at trial and the result reached in the initial reasons. Such an approach, Di Stasio submits, would have partially assuaged the prejudice experienced by Di Stasio after the judge granted R & K the indulgence of reopening.

99 Furthermore, Di Stasio submits that it should not have been ordered to pay the costs of its reopening application on the basis that junior counsel for Di Stasio had also been 'inadvertent' in not specifically drawing the attention of the judge to [12(b)] of its defence.[107] It argues that this was illogical and inconsistent with the judge's finding in the September reasons that even a bare denial was sufficient to put R & K on notice of the case it had to meet.[108] Moreover, Di Stasio submits that its reopening application was caused by the insistence of senior counsel for R & K in R & K's reopening application that Di Stasio's position had not been raised in its defence. It seeks an order that R & K should be ordered to pay all the costs of the reopening applications, not only R & K's own application (because it was granted an indulgence) but also that of Di Stasio's application.

100 R & K submits that Di Stasio fails to grapple with the reasons the judge gave for awarding the costs of the proceeding against it. Furthermore, the basis for the judge's entertaining Di Stasio's application to reopen was attributable to junior counsel for Di Stasio having misstated the terms of its defence in the hearing of R & K's application. In those circumstances, it is explicable that Di Stasio would be ordered to pay the costs of its application to reopen.

101 In my view, R & K is correct to submit that Di Stasio does not grapple with the judge's reasoning on the costs of the proceeding. An award of costs of the proceeding is typically made, as it was here, after the completion of the substantive matter. It is only from that vantage point that a judge can seriously determine the competing merits of the proceeding. This was the appropriate approach here despite the indulgence required by R & K, given, as the judge observed, the discrepancy that required repair by means of the new invoice was minimal.[109] Moreover, it is consistent with principle that an amendment to a pleading is to operate nunc pro tunc.[110]

102 Furthermore, I consider that no error is demonstrated in the judge's disposition on costs with respect to Di Stasio's reopening application. The judge records that Di Stasio submitted to him that it should recover its costs of its reopening application on the basis that it was successful in having the June ruling set aside over the opposition of R & K. In response, R & K submitted to the judge that it should recover its costs (on an indemnity basis) because the ultimate result was the same, namely, that R & K was permitted to reopen its case. The judge determined that the costs of Di Stasio's reopening application should be awarded in favour of R & K because Di Stasio sought an indulgence from the court by reason of junior counsel's conduct at R & K's application to reopen and, in effect, the award of costs against it was the price of that indulgence. He rejected the submission that costs be awarded on an indemnity basis. The need for Di Stasio to seek to reopen R & K's application was due to the 'inadvertence' of its junior counsel in failing to ensure the judge had an accurate understanding of Di Stasio's case, including the defence as pleaded. The 'inadvertence' of Di Stasio's junior counsel at R & K's application to reopen was to be treated in the same way as the 'inadvertence' of R & K's solicitor at trial. Both parties required an indulgence from the Court and costs were awarded accordingly.

103 The judge made this plain in his November reasons:

The basis upon which I was persuaded to 'reopen the reopening' upon the defendant's summons was an affidavit sworn by [the] defendant's trial counsel and its sole counsel at the reopening in June ... that he did not do justice to his client's case upon the reopening due to inadvertence. The result is that the plaintiff's representative was inadvertent at trial and the defendant's representative was inadvertent at the initial reopening application. The honours are even.

The logic that says the plaintiff should pay the costs of its own summons since it was seeking an indulgence as a result of the inadvertence of its own legal representative applies likewise to the defendant.[111]

104 It is axiomatic that an award of costs is in the discretion of the court. The discretion is broad. I do not consider that the judge's discretion miscarried when he determined to treat the two parties equally because each sought an indulgence from the court, the need for which arose because of the inadvertence of each party's legal representative, respectively.

107 By its Notice of Contention, R & K contends that the September reasons should be affirmed on the basis of three grounds that were erroneously decided by the judge.[112] As I have determined that the judgment should be upheld and the appeal dismissed, it is unnecessary to examine the contentions raised by R & K in any detail.[113] This is especially so here the following reasons:

(1) Contention 1 (that the judge was wrong to decide that R & K's solicitor was clearly on notice about the equal in value issue and ought to have appreciated its significance) fails to acknowledge the basis for the judge's preparedness to grant the indulgence R & K sought. It is the judge's conclusion that the conduct of R & K's solicitor was not disentitling which is important.[114] This renders the review of R & K's solicitor's conduct as ultimately immaterial to R & K's interests.[115]

(2) Contention 2 (that the judge erred in construing the contract as requiring the preparation of a tax invoice equal in value to the architect's certificate as a prerequisite to payment) seeks to undermine the very basis of the appeal. If, properly construed, the contract did not require the preparation of a tax invoice equal in value to the architect's certificate as a prerequisite to payment, there was no need for R & K to reopen its case, amend its pleadings, or adduce further evidence. The whole of the appeal would be rendered futile and it might be necessary to set aside all the orders of the judge as arising from a false premise. I do not consider that R & K's attempt to impugn the fundamental basis of the judge's reasoning in this way is consistent with the purpose of a Notice of Contention, namely, to affirm the judgment below. R & K did not seek to cross-appeal.

(3) Contention 3 (that the judge wrongly concluded that R & K's invoice for an amount less than that stated in the certificate meant that the documents were not equal in value) is a question of law that was not raised at trial. On the appeal, senior counsel for R & K conceded that at trial the claim for the payment of Progress Claim 2 was for the higher amount contained in the certificate and that no argument was put to the judge that his client sought the lesser amount in the incorrect invoice and would waive any entitlement to the balance as set out in the certificate. To warrant a grant of leave to raise a new

point on appeal, the circumstances must be exceptional.[116] A court will refuse leave where 'had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding'.[117] However, the resolution of Contention 3 might require, especially on the issue of waiver, examination of the conduct and practices of the parties in circumstances where there was evidence that suggested that, at various times, alternative procedures to those required under the contract were followed. The pre-conditions for the raising of a new point on appeal are not satisfied.

108 For the reasons set out above I would dismiss the appeal.

109 I agree with Tate JA, for the reasons she gives, that the appeal should be dismissed.

110 I have had the advantage of reading, in draft, the reasons of Tate JA. I agree that the appeal should be dismissed, for the reasons given by her Honour.

[1] This obligation was held to arise under cl N6.1. See [14] below.

[2] R & K Services Pty Ltd v Di Stasio Pty Ltd [2017] VCC 502.

[3] R & K Services Pty Ltd v Di Stasio Pty Ltd (Unreported, County Court of Victoria, Judge Macnamara, 16 June 2017).

[4] The judge delivered an ex tempore ruling on 12 September 2017 (Unreported, County Court of Victoria, Judge Macnamara, 12 September 2017).

[5] R & K Services Pty Ltd v Di Stasio Pty Ltd [2017] VCC 1358.

[6] R & K Services Pty Ltd v Di Stasio Pty Ltd [No 3] [2017] VCC 1630.

[7] See [8] below. On 16 February 2018 Whelan JA granted leave to appeal on grounds 1 and 2, but otherwise refused leave.

[8] Di Stasio appeals against the whole of the September reasons insofar as the judge gave leave to R & K to reopen its case, amend its pleading and tender further evidence. It also appeals against the orders that gave effect to the September reasons, orders 1 and 2 made on 28 September 2017 (See n 58) and orders 1, 2 and 4 made on 13 November 2017 and authenticated on 15 November 2017 (See [57] below). It does not seek to appeal the June or September rulings although it complains that in the September reasons the judge overlooked the prejudice Di Stasio would suffer by reason of having applied the wrong test in the June ruling.

[9] (1936) 55 CLR 499, 504-5.

[10] See [107] below.

[12] Greydae Pty Ltd v Malilane Pty Ltd [2003] VSCA 27 [17], [24] (Winneke P).

[13] Di Stasio is here referred to as 'the appellant' rather than 'the applicant' to reflect that leave to appeal has been granted.

[15] During the hearing of the appeal senior counsel for Di Stasio said that the reason for the denial was that the discrepancy between the figures and the words in the architect's document meant that it was not clear whether the figure of $109,333.43 was a certified amount. The judge referred to this in his initial reasons [148].

[16] That is, [11(c)] of the Defence (dated 21 August 2015) to the Amended Statement of Claim dated 29 July 2015. In [11(a)] of that Defence Mr Di Stasio (the named defendant at that time) denied that he was a party to the contract. In [11(b)] it is alleged that a part payment was made. (R & K originally named 'Rinaldo Di Stasio' as the first defendant and 'Di Stasio Pty Ltd' as the second defendant, but amended its pleading to remove Mr Di Stasio.)

[18] Ibid [119]-[120] (emphasis added).

[25] Ibid [205]-[206] (emphasis added)(citation omitted).

[29] [2013] VSC 619 ('CC Containers').

[30] [2006] FCA 22 ('Bradshaw').

[31] [2012] VSCA 232; (2012) 46 VR 1 ('Spotlight').

[32] CC Containers [2013] VSC 619 [8] (citation omitted).

[34] See [17] above.

[42] See [34] above.

[43] The hearing occurred on 16 June 2017.

[44] See [18] above.

[47] It is probable, as R & K's solicitor suggested in his affidavit dated 6 September 2017 [7], that the correct reference was to [11(a)] and [11(b)]. Read in this way, and considering the various pleadings, it appears that the reference to 'above' in the submissions refers back to paragraphs in the submissions and not in the pleadings.

[48] September ruling 75 (emphasis added).

[50] See [35] above.

[52] R & K Services Pty Ltd v Di Stasio Pty Ltd [2017] VCC 1358.

[53] As noted, Di Stasio also seeks to challenge the June ruling by ground 1(c)(ii) or at least its impact on the September reasons. It also appeals against the costs orders made following the November reasons. See [4] and n 8 above.

[54] September reasons [27] (emphasis added).

[55] Ibid [28]-[30] (emphasis added).

[56] Ibid [30]. Junior counsel for Di Stasio submitted that R & K had 'a broad strategy in the case formulated by others acting for the plaintiff, who originated its pleadings before [R & K's solicitor's] involvement, whereby failures to comply with the terms of the contract by the plaintiff builder could be effectively 'outflanked' by reliance on a quantum meruit claim which was included in the plaintiff's pleading'.

[58] September reasons [35]-[36] (emphasis added) (underlining as in original). The judge made orders on 28 September 2017, which relevantly provided: '(1) The Plaintiff be granted leave to amend its Statement of Claim in accordance with the proposed Third Further Amended Statement of Claim being exhibit 'JH-2' to the affidavit of Johannes Hartman sworn 1 June 2017 ('the affidavit'); (2) The Plaintiff be granted leave to admit the affidavit into evidence in respect of its claim in the proceeding'.

[59] November reasons [6]-[7]. The issues in the counterclaim are not the subject of this appeal.

[60] This is relevant to ground 2 of the grounds of appeal. See [8] above.

[63] Spotlight [2012] VSCA 232; (2012) 46 VR 1, 5-6 [17]-[18] (citations omitted).

[64] [1993] HCA 6; (1993) 176 CLR 300 ('Autodesk').

[67] [2011] FCAFC 9; (2011) 190 FCR 437 (Keane CJ, Besanko and Perram JJ) ('Davis').

[68] Autodesk [1993] HCA 6; (1993) 176 CLR 300, 303 (Mason CJ).

[69] Davis [2011] FCAFC 9; (2011) 190 FCR 437, 440 [9] (emphasis added).

[70] Di Stasio points to three examples where applications to reopen were made pre-judgment: Murray v Figge (1974) 4 ALR 612, 614 (Supreme Court NT) (where counsel had forgotten to tender answers to interrogatories and application was made after judgment was reserved, the trial judge accepted he had the power to reopen where the omission was inadvertent, but refused the application on the basis that the evidence would not have influenced the result); Brown v Petranker (1991) 22 NSWLR 717, 728-9 (where the NSW Court of Appeal held that leave to recall a witness, prior to the conclusion of the defence case, ought to have been permitted in circumstances where counsel had through oversight omitted to ask particular questions); and Henning v Lynch [1974] 2 NSWLR 254 (where Jeffrey J held that a magistrate should have given leave to the prosecutor to reopen his case in order to establish that a breath testing device bore the word 'Alcotest', having inadvertently omitted to do so during trial).

[71] See [18] above.

[72] Di Stasio submits that, during the trial, there was a third occasion on which the possibility of R & K issuing a compliant invoice was raised by the judge with R & K's solicitor but he again chose not to act. This was during the solicitor's closing submissions:

HIS HONOUR: So you will recall what [Di Stasio's junior counsel] said, he said the procedure for making progress claims and getting certificates and so forth hadn't been complied with, with respect to that amount and I should deny the plaintiff a judgment on that amount for that reason alone.

...

[R & K's solicitor]: I dispute that, Your Honour.

HIS HONOUR: I assumed you would so what is the basis of the dispute?

...

HIS HONOUR: So let me understand what you're submitting here, are you submitting I should find the process laid down in the contract occurred because it's probable it occurred even though we don't have incontestable evidence to that effect or are you saying that I should find an implied term in the second contract that some other process was available either as a substitute or as an alternative? I assumed it was the first.

[R & K's solicitor]: It was the first but if your Honour doesn't agree with the first as having been sustained, then it is not a mutually exclusive situation.

HIS HONOUR: I understand that except I don't recall that there was any pleading about an implied alternative procedure ...

It is apparent that on this occasion the judge attempted to clarify the basis for R & K's denial that the procedure to make progress claims in relation to Progress Claim 2 was not complied with: was R & K saying that there had been compliance, or, for example, that there was an implied term of the contract that some other process was available as an alternative? In my view, it is difficult to construe this third occasion as one on which the equal in value issue was seriously raised or the potential for compliance with the contract being secured by the issue of another invoice with the correct sum.

[74] The hearing was adjourned on 10 February 2017 and returned to the judge on 10 April 2017.

[75] As mentioned, see [60] above.

[76] (1936) 55 CLR 499, 504-5.

[77] Spotlight [2012] VSCA 232; (2012) 46 VR 1, 7 [25]-[26]; Bradshaw [2006] FCA 22 [24], [26]; CC Containers [2013] VSC 619 [8]-[9].

[79] [1997] HCA 14; (1997) 190 CLR 207 ('De L').

[80] De L v Director-General, NSW Department of Community Services (1996) 187 CLR 640.

[81] Brennan CJ and Dawson J took the view that reg 7 could not confine the general power of the court to award costs conferred by s 26 of the Judiciary Act 1903 (Cth) and saw no need to address the reopening issue.

[82] De L [1997] HCA 14; (1997) 190 CLR 207, 215 (citations omitted).

[87] See the separate questions identified at De L [1997] HCA 14; (1997) 190 CLR 207, 214-15.

[90] Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, 39-40 (Mason J), Neat Domestic Trading Pty Ltd v AWB Ltd [2003] HCA 35; (2003) 216 CLR 277, 288 [20]), Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492, 496, 504.

[91] Ezra Abrahams Pty Ltd v Milburn [2017] VSCA 355 [46] ('Ezra Abrahams').

[92] See [24] above.

[93] Smith v New South Wales Bar Association [1992] HCA 36; (1992) 176 CLR 256, 266-7; the latter situation may be determined on the basis of prejudice alone. See also Ezra Abrahams [2017] VSCA 355 [54].

[94] Goldsmith v Sandilands [2002] HCA 31; (2002) 190 ALR 370, 385 [58].

[95] See [35] above.

[96] See [18] above.

[97] See [14] above.

[98] See [18] and [19] above.

[99] See [36] above.

[101] Ibid. See [36] above.

[103] Senior counsel for Di Stasio on the appeal submitted that this Court was aware that various offers were made and ought to consider them on the issue of prejudice. She sought to rely on an affidavit affirmed after the November reasons were delivered, on 11 December 2017, by Peter Moran, a Principal of Peer Legal, Di Stasio's solicitors, in which he deposes to the advice given to his client and the offers which were made. However, this evidence would only have become relevant if error below was demonstrated on the issue of prejudice and it was not.

[104] See [92] above.

[105] See [68] above.

[106] See the costs orders made at [57] above.

[107] See [38] and [40] above.

[108] See [49] above.

[109] See [56] above.

[110] Wigan v Edwards (1973) 1 ALR 497, 515 (Mason J); Anglo Irish Beef Processors International v Federated Stevedores Geelong [1997] 2 VR 676, 680 (JD Phillips JA).

[111] November reasons [58]-[59] (emphasis added).

1. [112] The grounds raised in the Notice are: '1. The Court was wrong in deciding the matters of fact referred to in paragraph 1 (a) of the appellant's ... grounds of appeal, namely that the respondent's legal representative: (a) was clearly on notice that the appellant was denying compliance with the contractual procedure for payment of progress claims in respect of Progress Claim No 2 ([27]); and (b) ought to have appreciated the significance of the respondent's failure to comply with that contractual procedure insofar as it required service of a tax invoice equal in value to the architect's certificate ([34]). 2. The Court was wrong in deciding that: (a) on the true construction of the contract between the appellant and the respondent the provisions of clauses N6.1 and N7.1 required, as a mandatory requirement for an entitlement to payment of a progress claim, that an invoice delivered for the claim be 'equal in value' to the architect's certificate accompanying the claim; (b) because the invoice delivered by the appellant (via the architect) was for an amount less than the amount of the accompanying certificate of the architect: (i) the invoice was 'not equal in value' to the certificate; (ii) the invoice did not comply with the provisions of clause N6.1 or clause N7.1 of the contract; (iii) the amount claimed in the invoice was not due or payable, at any time until delivery of an invoice claiming the same amount as in the architect's certificate. 3. The Court ought to have decided that: (a) As the invoice was for a lesser amount than was the architect's certificate, on the basis of the legal maxim that the greater includes the lesser, the amount of the invoice was included in the amount of the certificate, and the invoice was thus 'equal in value' to the certificate; (b) The contract does not require that the amounts in the respondent's invoice and in the architect's certificate be identical, or substantially identical, before the respondent was entitled to payment; (c) On the true construction of the contract, the 'value' of an invoice and the 'value' of an architect's certificate is not the same as the 'amount' in either case; (d) The respondent's invoice was equal in 'value' to the architect's certificate as: (i) the 'value' of the invoice did not exceed the 'value' of the certificate; (ii) the lesser claim in the invoice may be taken as a waiver of a claim to the amount in the certificate, and the amount of the claim and of the waiver together were equal in amount to the amount of the certificate; (e) The obligation on the appellant under clause N7.1 of the contract is to pay the 'amount stated as owing in any certificate'. The respondent's claim did not exceed that amount; (f) The respondent was not compelled to require payment of the full certified amount before being entitled to payment of any amount. The tax invoice was what it claimed; (g) The relevant clauses of the contract only provide for a mechanism for the scheduling of payment during the course of the works, and are not a condition precedent to payment'.

[113] Greydae Pty Ltd v Malilane Pty Ltd [2003] VSCA 27 [17], [24] (Winneke P); East Melbourne Group Inc v Minister for Planning (2008) 3 VR 605, 644 [164] (Warren CJ); Legal Services Commissioner v Brereton [2011] VSCA 241; (2011) 33 VR 126, 128 [1]-[2], 156 [115]; Salta Constructions Pty Ltd v St George Bank [2014] VSCA 289; (2014) 45 VR 245, 256-7 [37]-[40].

[114] See [50] above.

[115] This Court is not concerned with any allegation against the solicitor's competence or professionalism.

[116] Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1, 8; Harplex Pty Ltd v Konstandellos (2018) 54 VR 174, 190 [67].

[117] Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1, 7.