By Summons filed on 28 June 2024, the Plaintiff, Mr Jaworski, sought relief described as:
"Grant of leave for derivative action per Request in attached Affidavit: Jaworski Chartered Accountants, Australia and New Zealand."
While the relief that Mr Jaworski sought was framed as the grant of leave to bring a derivative action, which he contended would be granted in accordance with the general law, he rightly then recognised that that leave was not required to commence the proceedings but went, inter alia, to the question whether he would be entitled to retain legal representation at the cost of the Defendant ("CAANZ"). Mr Jaworski has not served the proceedings on CAANZ.
By my judgment delivered on 19 August 2024 ("Earlier Judgment"), I determined the question whether Mr Jaworski should be required to serve the Summons on CAANZ before any determination of any question as to whether he should be entitled to pursue the proceedings further at CAANZ's cost. I referred to the lengthy affidavit on which he relied and the basis on which he submitted, primarily in reliance on the decision in Wallersteiner v Moir (No 2) [1975] 1 QB 373 ("Wallersteiner") that the Court should order that CAANZ pay his costs of the proceedings before CAANZ was served with the proceedings and allowed an opportunity to be heard. I concluded (at [28]-[29]) that:
"I have allowed Mr Jaworski the opportunity to be heard as to orders, and I accept that it would be inappropriate to direct him to serve this application on CAANZ, where he is concerned that the service of the application would expose him to costs then incurred by CAANZ, to which he does not wish to be exposed. In those circumstances, the preferable course is to allow Mr Jaworski the option to serve the proceedings, if he wishes to do so, but stay the proceedings until that has occurred. That allows him to continue the proceedings, if he wishes to do so, but does not require him to do so if he does not wish to do so.
Mr Jaworski has also raised the possibility that he will seek leave to reopen, to the extent that I may not have understood the submissions that he has put or that he may wish to address further matters as to the case law, which I have addressed above. Ordinarily, leave to reopen is not readily granted, but I bear in mind that the issues are complex and Mr Jaworski is self-represented. I will make directions which will allow him the opportunity for further submissions and reserve to him the opportunity to apply for leave to reopen, while reserving the question whether such leave should be granted."
I then made the following orders:
"1. Note that the proceedings have not been served.
2. Stay the proceedings until they are served upon the Defendant, Chartered Accountants Australia and New Zealand."
By written submissions made on 30 August 2024, Mr Jaworski took up the possibility to which I referred in paragraph 29 of the Earlier Judgment and requested that leave be granted for the judgment to be reopened on the basis of further submissions, which were largely structured as a response to the conclusions which I had reached in the Earlier Judgment.
[2]
The applicable principles
Mr Jaworski did not identify a basis in the case law for his application to reopen, but I should address the applicable principles before turning to the broad nature of his submissions. Rule 36.16(1) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") permits the Court to set aside or vary a judgment or order if a notice of motion to set it aside or vary it is filed before entry of that judgment or order. Rule 36.16(3A) of the UCPR provides that, if a notice of motion to set aside or vary a judgment or order is filed within 14 days after the judgment, the Court may determine the matter and (if appropriate) set aside or vary the judgment or order. Mr Jaworski brings this application, although not by notice of motion, within that 14 day period.
The power to reopen is more often exercised in respect of an application to lead further evidence rather than make further submissions. In Urban Transport Authority (NSW) v Nweiser (1992) 28 NSWLR 471 at 478, Clarke JA observed that:
"The principle which should guide the Court in determining whether to grant an application for leave to reopen is whether the interests of justice are better served by allowing or rejecting the application as the case may be. No doubt it is relevant to take account of a number of matters such as likely prejudice to the party resisting the application and the reasons why the evidence was not led in the first place, but there is not, in my opinion, any hard and fast rule which requires the Court to reject an application where the decision not call [sic] the witness in the party's case was a deliberate one …".
In Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 302; [1993] HCA 6 ("Autodesk"), Mason J observed that "the jurisdiction is to be exercised with great caution, having regard to the importance of the public interest in the finality of litigation" and that "generally speaking it will not be exercised unless the applicant can show that by accident and without fault on his part he has not been heard". His Honour also observed at 303 that:
"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."
In De L v Director-General, Department of Community Services (NSW) (No 2) (1997) 190 CLR 207 at 215; [1997] HCA 14, Toohey, Gaudron, McHugh, Gummow and Kirby JJ pointed to the considerations involved in a Court's determination whether to reopen a judgment or orders, noting that:
"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". 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. In the case of a final court of appeal, such as this Court, that injustice may be irremediable, unless the Court itself, acting promptly, is persuaded to reopen its orders so as to afford relief in the exceptional circumstances of the case." [citations omitted]
In New Cap Reinsurance Corporation Ltd v AE Grant [2009] NSWSC 950 ("New Cap") at [20]), Barrett J (as his Honour then was) observed that:
"It seems to me that these principles, as they apply in a case such as the present, can be summarised in one basic proposition, namely, that a single judge whose decision is susceptible to appeal through readily available channels (with or without any preliminary need for leave to appeal) should allow re-opening after judgment where it is obvious to that judge that the decision has miscarried and that the miscarriage may be rectified and the situation retrieved by attention to the matter by that judge rather than by an appeal court. What is highly undesirable is that the first instance judge should be cast in the role of hearing what amounts to an appeal against his or her own decision."
In Big Money World Pty Ltd v Red Hair Entertainment Pty Ltd [2018] NSWSC 1837, Ward CJ in Eq (as the President then was) observed that:
"There is not an ongoing right to be heard, after judgment has been reserved, in order to raise arguments as and when they may belatedly occur ... (In a different context, see the High Court's observations in Eastman v DPP (2003) 214 CLR 318; [2003] HCA 28 at [29] per McHugh J.)"
Her Honour's reference was there to McHugh J's observation that:
"Parties to matters before the Court need to understand that, once a hearing in the Court has concluded, only in very exceptional circumstances, if at all, will the Court later give leave to a party to supplement submissions. Parties have a legal right to present their arguments at the hearing. … a party has no legal right to continue to put submissions to the Court after the hearing. In so far as the rules of natural justice require that a party be given an opportunity to put his or her case, that opportunity is given at the hearing."
I also bear in mind that my Earlier Judgment was interlocutory in character, in the sense that it did not finally resolve the proceedings. In that context, as I observed in Re Anne Lewis Pty Ltd (In Liq) [2018] NSWSC 1727 at [10]:
"the authorities establish that [an interlocutory judgment] should only be revisited where there has been a material change in circumstances. In Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46, distinguished equity judge McLelland J observed that:
The ordinary rule of practice is that an application to set aside, vary or discharge [an interlocutory order] must be founded on a material change of circumstances since the original application was heard, or the discovery of new material which could not reasonably have been put before the Court on the hearing of the original application.
That approach has been repeatedly followed in the authorities, with recent examples including the Court's decisions in Cody v Live Board Holdings (No 2) [2017] NSWSC 308 at [190]; Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 82 at [11] and Maxiwealth Holdings Pty Ltd v The Mill Goulburn Pty Ltd [2018] NSWSC 290."
[3]
Mr Jaworski's submissions
Mr Jaworski refers, first, to my observation that his application was not supported by an opinion of Counsel, a possible course noted in Wallersteiner, and that was a matter that supported allowing CAANZ an opportunity to be heard before an order requiring it to pay his costs of the proposed proceedings was made. Mr Jaworski submits that:
"The question of whether a reasonable case exists is to be decided by the Court, and while such a decision may be assisted by Counsel opinion, the Court would reasonably be expected to make its own decision where necessary …"
I accept that it may be necessary for the Court to reach a decision as to that question, if it is placed in a position that it can fairly determine it; however, the conclusion that I reached in my Earlier Judgment was that, where the Court did not have the assistance of a Counsel's opinion in support of Mr Jaworski's application, then allowing CAANZ an opportunity to be heard will likely promote a just and fair determination of the question. Mr Jaworski also submits that there is a "Catch 22" element, if his application is "criticised" for the lack of a Counsel's opinion, when the point of his application is to seek an order that CAANZ pay his costs of the proceedings so that he can obtain legal representation to conduct them at CAANZ's cost. I note, first, that the application is not "criticised" on that basis; instead, I simply found that, at least absent a Counsel opinion, it would be preferable that CAANZ be allowed an opportunity to be heard in respect of it. There is also no "Catch 22" in that proposition, since Mr Jaworski is not prevented from continuing his application, but is only required to give CAANZ the opportunity to be heard as to whether the orders he seeks should be made. It seems to me that Mr Jaworski's submissions as to these matters do not identify any error of fact or law in my conclusion, as distinct from the fact that Mr Jaworski holds a different view to my view.
Mr Jaworski also submits that his affidavit is a good faith attempt to reflect all the facts and arguments presented by both parties over many years of correspondence and a parliamentary inquiry and it is "unlikely" that any surprises remain. I proceed on the basis that Mr Jaworski has summarised matters as he understands them; but I also recognise that experience teaches that a party against which relief is sought may have a different perception of events to the party seeking that relief. Mr Jaworski then turns to submissions as to the correctness, or otherwise, of my understanding of the decision in Wallersteiner; he submits that the matter is not complex, despite the length of his affidavit; and the large part of his further submissions assume the correctness of the position for which he contends and do not address the possibility that CAANZ may put submissions or lead evidence which casts matters in a different light. Again, it seems to me that Mr Jaworski's submissions as to these matters do not identify any error of fact or law in my conclusion, as distinct from the fact that, understandably, Mr Jaworski is satisfied that his position is correct and any position that CAANZ might put, if allowed the opportunity to do so, would not prevail.
Mr Jaworski also points to the "misapprehensions" which exist in other aspects of my judgment, which would be displaced, implicitly, if I accepted his view of events without allowing CAANZ an opportunity to be heard, and he refers to earlier disputes with CAANZ as to the conduct of its affairs in other forums. I express no view as to whether Mr Jaworski's understanding of those events will ultimately be established, where the conclusion that I reached was only that the Court would likely be better able to reach a just and fair determination of that matter if Mr Jaworski were required to serve the application and allow CAANZ an opportunity to be heard. It seems to me that Mr Jaworski's submissions as to these matters again do not identify any error of fact or law in my conclusion, although Mr Jaworski is entitled to take a different view.
I am conscious, as Barrett J noted in New Cap, that it is undesirable for a first instance judge to hear what amounts to an appeal against his or her own decision. With that qualification, it does not seem to me that Mr Jaworski has shown that I proceeded according to some misapprehension of the facts or the relevant law. While I recognise that I took some time to recognise, in the oral hearing, the extent to which the approach urged by Mr Jaworski, by reference to Wallersteiner, differed from that which is now more commonly seen in statutory derivative actions, I took full account of that matter in the Earlier Judgment. I would likely have permitted reopening had such a misapprehension emerged but it seems to me, without any criticism of Mr Jaworski, that to do so here would allow Mr Jaworski to reargue his case in the manner which Mason J warned against in Autodesk.
For these reasons, I do not allow Mr Jaworski's application to reopen my judgment requiring that his application be served on CAANZ before it is heard and determined.
[4]
Amendments
06 September 2024 - Correcting typographical errors.
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Decision last updated: 06 September 2024