Dubow v Fitness First

REASONS FOR JUDGMENT 1 On 10 June 2010 a hearing was held to resolve two Notices of Motion filed by Ms Dubow - one filed in proceeding NSD 523 of 2010; the other in proceeding NSD 526 of 2010. Reasons for decision were published on 24 June 2010: Dubow v Fitness First (Australia) Pty Ltd [2010] FCA 660. Also listed for hearing on that day was a Notice of Motion filed by the Respondent on 8 June 2010 in proceeding NSD 523 of 2010 seeking an order that the appeal be "dismissed as incompetent" pursuant to O 52 r 18(1) of the Federal Court Rules. 2 In proceeding NSD 523 of 2010, Ms Dubow sought by way of a Notice of Motion filed on 24 May 2010 a "stay of judgment" in respect to a decision of a Federal Magistrate ordering her to pay costs: Dubow v Fitness First Australia Pty Ltd (No 3) [2010] FMCA 287. A stay was granted on conditions. The orders made on 24 June 2010 were as follows: 1. The Order of the Federal Magistrate as made on 3 May 2010 for the payment of costs in the amount of $25,594.32 be stayed until further order. 2. Costs reserved. 3. Orders 1 and 2 are conditional and shall only take effect upon the Appellant, within 14 days: (i) filing an undertaking with the Court seeking to have the Notice of Appeal heard at the earliest date convenient to the Court; and (ii) paying into Court the sum of $25,594.32. Those orders have not been entered. Those orders did not deal with the Respondent's Notice of Motion. 3 The Respondent on that Motion, Fitness First (Australia) Pty Ltd ("Fitness First"), had the matter re-listed on 16 July 2010 with a view to seeking a further order to resolve the fate of its own Notice of Motion. The Respondent invoked the "slip rule". In oral submissions, it remained of the view that an order should be made as sought in its Motion, namely an order dismissing the appeal as incompetent. Alternatively, it sought an order that the Motion should be stood over for further hearing. Consistent with the pragmatic approach pursued at the hearing on 10 June 2010, the solicitor appearing on behalf of Fitness First nevertheless acknowledged that the orders already made staying the order of the Federal Magistrate for the payment of costs could not have been made had it been successful in its Motion and had the purported appeal been dismissed. 4 Ms Dubow was unable to attend in person on 16 July 2010 but made submissions by way of audio link, as is permitted by s 47B of the Federal Court of Australia Act 1976 (Cth). 5 The power of the Court sought to be invoked by Fitness First was that conferred by O 35 r 7 of the Federal Court Rules. That Rule provides as follows: Setting aside (1) The Court may vary or set aside a judgment or order before it has been entered. (2) The Court may vary or set aside a judgment or order after the order has been entered where: (a) the order has been made in the absence of a party, whether or not the absent party is in default of appearance or otherwise in default and whether or not the absent party had notice of the motion for the order; (b) the order was obtained by fraud; (c) the order is interlocutory; (d) the order is an injunction or for the appointment of a receiver; (e) the order does not reflect the intention of the Court; or (f) the party in whose favour the order was made consents. (3) A clerical mistake in a judgment or order, or an error arising in a judgment order from an accidental slip or omission, may at any time be corrected by the Court. (4) Subrule (2) shall not affect the power of the Court to vary or terminate the operation of an order by a supplementary order. 6 Rule 7 clearly draws a distinction between those cases where a variation of a judgment or order is sought before it has been entered (r 7(1)) and those cases where a judgment or order has been entered (r 7(2)). 7 Even in those cases where a judgment or order has not been entered, the discretionary power is "to be exercised cautiously, bearing in mind the public interest in the finality of litigation": Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 317 per Dawson J. Although acknowledging the power is to be exercised "with great caution", in State Rail Authority of New South Wales v Codelfa Construction Pty Ltd (1982) 150 CLR 29 at 38 Mason and Wilson JJ further acknowledged that "[t]here may be little difficulty in a case where the orders have not been perfected and some mistake or misprision is disclosed". 8 The need for reservation in exercising the power may nevertheless be accepted. In Venus Adult Shops Pty Ltd v Fraserside Holdings Ltd [2007] FCAFC 41, 239 ALR 724, French and Kiefel JJ summarised the approach to the exercise of the discretion as follows: [6] The discretion under O 35 r 7(1) to vary or set aside a judgment before it has been entered is to be exercised sparingly. The public interest in the finality of litigation requires no less. A liberal approach would open the way to disappointed litigants to seek to re-argue cases generally on the basis that the Court failed to properly consider their submissions on the law or the facts. On the other hand, where a court has adopted a proposition of fact or law which the unsuccessful party has not had a reasonable opportunity to argue there may be a denial of procedural fairness if that party is not allowed to reopen argument for the purpose of meeting the adverse proposition: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 309 (Brennan J). See also: Wati v Minister for Immigration and Multicultural Affairs (1997) 78 FCR 543 at 550 to 551 per von Doussa, Moore and Sackville JJ; Yau's Entertainment Pty Ltd v Asia Television Ltd [2002] FCAFC 378 at [3] per Sundberg, Finkelstein and Hely JJ. 9 Whilst accepting the need to exercise reservation when exercising the power conferred by O 35 r 7(1), it is nevertheless considered that orders should be made expressly granting leave to appeal and dismissing the Respondent's Notice of Motion. As noted in the reasons for decision given on 24 June 2010, the hearing on 10 June 2010 proceeded upon the basis that Ms Dubow's Notice of Appeal was treated as an application for leave to appeal; indeed, that was but the converse of the order sought by Fitness First in its own Notice of Motion: [2010] FCA 660 at [28]. As also previously acknowledged, Fitness First accepted that "it would be a 'bold' proposition to contend that the decision of 3 May 2010 did not expose at least 'arguable' grounds of appeal": [2010] FCA 660 at [32]. 10 It was in that context that the application for the stay of judgment as sought by Ms Dubow was heard and the stay granted, albeit subject to conditions. Had Fitness First been successful in obtaining the relief it sought in its own Notice of Motion, Ms Dubow would have been unsuccessful. The question as to whether there was any merit in the arguments sought to be advanced on behalf of Fitness First and Ms Dubow had been fully canvassed. No question arises as to now entertaining any further evidence or submissions. To make the orders now sought, it is considered, merely gives effect to the manner in which the hearing proceeded on 10 June 2010 and makes express provision for that which was otherwise implicit. 11 The orders granting leave to appeal and dismissing the Notice of Motion of Fitness First, it is considered, give effect to the underlying manner in which the case proceeded on 10 June 2010 and the intention of the Court. It is considered appropriate to reserve the question as to the costs of the present application, together with the costs of the Respondent's Notice of Motion as filed on 8 June 2010. ORDERS 12 The Orders of the Court are: 1. The orders as made on 24 June 2010 be varied by adding the following orders: "4. The Respondent's Notice of Motion as filed on 8 June 2010 is dismissed." "5. Leave be granted to the Appellant to appeal the decision of the Federal Magistrate as made on 3 May 2010." 2. The costs of the present application, together with the costs of the Respondent's Notice of Motion as filed on 8 June 2010 be reserved. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.