91 CLR 353
The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc [1994] HCA 54
Source
Original judgment source is linked above.
Catchwords
91 CLR 112
Masters v Cameron [1954] HCA 7291 CLR 353
The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc [1994] HCA 54
Judgment (2 paragraphs)
[1]
Background
The Bank's submissions helpfully set out the background to the current application in considerable detail. The following is largely based on the Bank's summary:
• On 1 April 2009, the Bank commenced proceedings against the applicant in the Common Law Division seeking an order for possession of the applicant's property by reason of his default under the mortgage.
• On 17 November 2009, the Bank obtained default judgment against the applicant. The Bank took possession of the property on or about 27 January 2010. At the time the Bank took possession, a third party had registered a writ against the title to the property.
• The Bank exercised its power of sale and completed the sale on 14 May 2010. The net proceeds of the sale exceeded the applicant's indebtedness to the Bank. On the Bank's calculations, the excess was relatively modest.
• On 31 May 2010, the applicant filed the notice of motion to which I have referred and sought urgent relief in relation to the excess funds held by the Bank in consequence of the sale. On 9 June 2010, Hidden J made an order that the excess funds be paid into court.
• On or around 13 September 2010, the Bank paid $16,836.00 into court. This sum comprised the amount calculated by the Bank as the excess proceeds of sale ($22,349.67), less past costs incurred by the Bank in dealing with the excess funds ($5,253.10) and a further amount ($260.57) apparently mistakenly withheld by the Bank. This last amount was subsequently paid by the Bank to the applicant on 23 December 2014.
• On 26 May 2015, Hamill J ordered that the amount paid into court (plus interest) should be released to the applicant.
• On 18 August 2015, the applicant filed a motion seeking pro bono assistance in connection with his application to recover the sum of $5,253.10, being the portion of the proceeds of sale applied by the Bank to its post-settlement costs.
• On 22 September 2015, McCallum J ordered the Bank to pay the sum of $5,253.10 into court and directed that the applicant receive a referral for pro bono assistance. The Bank complied with McCallum J's order to pay the funds into court.
• Between 12 and 18 November 2015, discussions took place between the Bank's solicitor and the applicant's counsel concerning settlement of the dispute. On 18 November 2015, the Bank accepted an offer made on behalf of the applicant, subject to a deed of release being executed. On that day, the Bank prepared a draft deed.
• On 19 November 2015, McCallum J was told that the matter had settled, subject to exchange of counterparts of the deed of release. After the hearing had concluded, it appears that the applicant's counsel requested the Bank's representatives to make some amendments to the draft deed.
• On 27 November 2015, the matter was relisted before McCallum J. The applicant's counsel informed the Court that the settlement had "evaporated", but that his view nonetheless was that the matter had finally settled.
• During the hearing on 27 November 2015, McCallum J raised the possibility that she might resolve the question of a settlement on her own motion, pursuant to s 73(1) of the CP Act. The solicitor for the Bank said that he had no instructions on that suggestion. Counsel for the applicant said that his instructions were to seek a hearing date for the outstanding motion. Her Honour stated that she would grant a hearing date, but that the first issue would be whether the settlement about which the Court had been informed should be regarded as binding.
• On 18 December 2015, the Bank's solicitor wrote to the applicant's counsel. The letter, which was in evidence before the primary Judge, included the following:
"Our email to the Court of Thursday, 19 November 2015, which was sent with your agreement, confirmed that the parties had formed a binding settlement agreement which resolved all issues presently before the Court, in the terms set out above."
[Emphasis added.]
In the letter, the Bank offered to make some amendments to the deed in response to the applicant's concerns. However, the Bank did so:
"[w]ithout conceding that an agreed settlement does not exist and while reserving our client's rights to seek enforcement of the settlement agreement."
• On 1 February 2016, the applicant's counsel advised the Court that his retainer had been terminated.
• On 3 February 2015, the matter returned to Court. Mr Foley informed the primary Judge that the Bank was not making an application under s 73(1) of the CP Act, but it had no objection to her Honour acting on her own motion. The applicant, who was not legally represented at the hearing, said that he was prepared to deal with the issue of whether a binding settlement had been reached. Her Honour then proceeded on her own motion to hear the question of whether the parties had entered into a binding settlement of the dispute between them.
• In response to a demand by the applicant for immediate payment of the amount due to him, the Bank paid $5,188.53 to the applicant on 18 February 2016.
The applicant's written submissions identified no less than nine questions involved in the application for leave to appeal. These were as follows:
"(a) Did the Court err in determining an application that was not before it?
(b) Did the Court err by reading the without prejudice materials filed and relied on by the respondent?
(c) Did the Court err in making a determination pursuant to section 73 in the manner in which she did?
(d) Did the Court properly consider the applicants [sic] submissions and grant the applicant an opportunity to meet a case on the issues raised by the court?
(e) Is the appellant [sic] entitled to the sum paid into court as determined by her Honour notwithstanding her reasons?
(f) Is the respondent entitled to costs as determined by her Honour?
(g) Did the court properly consider matters as to costs?
(h) If her Honour did not err, do the settlement terms determined by her preclude the applicant from pursuing his claims for an accounting of all sums paid from the sale proceeds of the property at 23 the Avenue, Newport, a determination of any claim arising and payment of any additional surplus plus interest?
(i) If the answer to the above question is yes, is the respondent entitled to retain any additional sums from that surplus as a contingent liability so as to defend the claim."
The main contention advanced by Mr Luitingh in his oral argument was that the primary Judge wrongly assumed that she had power on her own motion to make a determination under s 73(1) of the CP Act. In assessing that contention, it is necessary to take account of s 86(3) of the CP Act, which provides as follows:
"Subject to this Act and to rules of court, the court may make any order that it has power to make either of its own motion or on the application of a party or any other person entitled to make such an application."
Mr Luitingh accepted that s 86(3) of the CP Act confers power on the Court, subject to the requirements of procedural fairness, to make any order of its own motion that it otherwise has power to make. However, Mr Luitingh submitted that in this case there was no power to make an order under s 73(1) of the CP Act because there was no "question in dispute between the parties to the proceedings as to whether, and on what terms, the proceedings have been compromised or settled between them". He contended that both parties were in agreement that the matter had not settled and that on 3 February 2016 there was no relevant dispute in existence between them.
The Bank's letter of 18 December 2015, the relevant terms of which have been set out earlier, [7] clearly stated the Bank's position that the parties had reached a binding agreement on 19 November 2015. It is equally clear that the applicant's position, albeit not shared by his counsel, was that the parties had never reached a final and concluded agreement to resolve the remaining issues in dispute.
Although the Bank might perhaps have been expected to take a more active role at the hearing before the primary Judge on 3 February 2016, nothing occurred at that hearing to indicate the Bank's position had altered since the letter of 18 December 2015. The Bank's solicitor read an affidavit to which the letter was annexed. The solicitor agreed with an observation made by the primary Judge in the course of argument that there seemed to be a "cogent basis" for concluding that the parties had reached a binding settlement. The submissions made on behalf of the Bank acknowledged that there might be difficulties in the path of that argument but supported it.
After hearing the Bank's submissions, the primary Judge invited the applicant to make his submissions. He did so, contending (not without force) that the parties had not resolved all outstanding issues on 19 November 2015.
In these circumstances, I do not consider that the applicant has made out an arguable case that there was no question in dispute between the parties on 3 February 2016 when the primary Judge exercised on her own motion the power conferred by s 73(1) of the CP Act.
The applicant may have an arguable case that the primary judge erred in finding that the parties reached a final and concluded agreement on 19 November 2015. Even if that is so, it is not sufficient to justify the grant of leave to appeal. As I have explained, it remains open to the applicant, if so advised, to seek an accounting from the Bank in relation to the disbursement of the proceeds from the sale of the property. As I have also explained, in substance the present dispute is limited to the order made by the primary Judge that the applicant pay the Bank costs assessed at $2,500.00. Not only is there no injustice to the applicant in refusing leave to appeal, it is plain that the costs of an appeal would be wholly disproportionate to the very small amount in dispute. [8]
No other basis was advanced on behalf of the applicant to justify the grant of leave to appeal. In particular, nothing was put that suggested that the applicant was denied procedural fairness or that her Honour's direction as to costs miscarried.
For these reasons, I joined in the Court's orders to dismiss the summons seeking leave to appeal, with costs.
[2]
Endnotes
[1954] HCA 72; 91 CLR 353.
[1954] HCA 23; 91 CLR 112.
The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc [1994] HCA 54; 181 CLR 404 at 420-421.
Uniform Civil Procedure Rules 2005 (NSW), r 36.1.
Supreme Court Act, s 23.
Bendigo & Adelaide Bank Ltd v Gorczynski (No 3) [2016] NSWSC 55 (Primary Judgment).
See at [23] above.
CP Act, s 60.
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Decision last updated: 21 March 2018
Solicitors:
Jane Button & Associates (Applicant)
Gadens Lawyers (Respondents)
File Number(s): 2016/62331
Decision under appeal Court or tribunal: Supreme Court of New South Wales
Jurisdiction: Common Law Division
Citation: [2016] NSWSC 55
Date of Decision: 03 February 2016
Before: McCallum J
File Number(s): 2009/293542