Kabat Investments Pty Ltd and Anor v Compleat Imports Pty Ltd [2002] VSCA 134

Court of Appeal (Vic)|2002-08-23|Before: BATT and BUCHANAN, JJ.A.

Practice & Procedure - Order made in ignorance of facts - Any application to vacate order to be made to first tribunal - Slip rule not applicable.

Costs - No appearance by one party - Whether opposing party to be deprived of costs for failing to remind first party's solicitor of the hearing.

In these proceedings, Compleat Imports Pty Ltd claimed the balance of the price of units in a unit trust which it sold to Kabat Investments Pty Ltd. The defendant counterclaimed against Compleat Imports Pty Ltd and Wendy Swift. I will refer to those parties as "the plaintiffs." the action came on for trial on 19 June 2001. On that day Judge Ostrowski adjourned the trial as His Honour was of the opinion that Claremont Lodge Pty Ltd should be added as a plaintiff to the counterclaim. An order for costs was made in favour of the plaintiffs.

In about December 2001 the defendants, by which I mean Kabat Investments Pty Ltd and Claremont Lodge Pty Ltd, learned of the existence of diaries which, they allege, the plaintiffs ought to have disclosed in their affidavit of documents.

A directions hearing was fixed by the County Court for 14 March 2002. On the eve of that hearing the solicitor for the defendants sent a facsimile to the solicitor for the plaintiffs which stated, "This matter is listed for a directions hearing tomorrow morning," and complained about the plaintiffs' discovery. An hour before the hearing the solicitor for the defendants telephoned the plaintiffs' solicitor to inquire as to the orders which the plaintiffs would seek at the hearing. The solicitor was not available. The defendants' solicitor left a message that he wished to speak to the plaintiffs' solicitor about the directions hearing.

The defendants' solicitor appeared before Judge Harbison on 14 March 2002. There was no appearance for the plaintiffs. It later appeared the plaintiffs' solicitor entered the wrong date in his diary and, although the facsimile from the defendants' solicitor was received on 13 March 2002, it did not come to the attention of the solicitor handling the file. The defendants' solicitor told her Honour of his attempts to contact the plaintiffs' solicitor. Judge Harbison struck out the plaintiffs' claim, set the counterclaim down for trial and reserved the costs of the hearing.

On 16 May 2002 a County Court judge heard an application by the plaintiffs to reinstate the action and an application by the defendants to vacate the costs order made by Judge Ostrowski. The application to reinstate the plaintiffs' claim was not opposed. Her Honour reinstated the action and made no order as to the costs of the application, remarking, according to the defendants' solicitor, "Non-attendance of practitioners at directions hearings is commonplace, but opposing solicitors are encumbered with an obligation to ensure that there is communication to overcome this frequent occurrence and to make sure that any non-attendance is conscious rather than inadvertent." Her Honour struck out the defendants' application to vacate the costs order made by Judge Ostrowski on the ground that she had no jurisdiction to entertain it.

The defendants now seek leave pursuant to s.74(20) of the County Court Act 1958 to appeal from the orders made on 16 May 2002.

The parties were notified that if we were persuaded to grant leave, we might proceed to hear and determine the appeal. The application was conducted on that basis.

Although the efforts made by the defendants' solicitor to communicate with the plaintiffs' solicitor on 13 and 14 March 2002 do not appear to have been made for the purpose of ensuring his attendance at the directions hearing, their effect was the same. On 16 May 2002 the judge was informed of those efforts. It is difficult to see what more could have been done by the defendants' solicitor to alert his opponent. In failing to make an order for the costs of the application occasioned solely by the default of the plaintiffs' solicitor, and in respect of which the plaintiffs were granted an indulgence, we are of the opinion that her Honour failed to properly exercise her discretion. The defendants' solicitor was not a guarantor of the appearance at the directions hearing by the plaintiff's solicitor. The fact that the amount of the costs was relatively small does not lead to the result that leave to appeal should be refused because there is no substantial injustice occasioned to the defendants. To be wrongly deprived of even a small sum is sufficient to warrant the grant of leave.

As to the application to vacate the order as to costs made by Judge Ostrowski, we are not persuaded that her Honour erred in striking out the application. Assuming that there is a power to vacate orders even when perfected (see Autodesk Inc. v. Dyason [No. 2] [1993] HCA 6; (1993) 176 CLR 300 at 317 per Dawson, J.; University of Wollongong v. Metwally [No. 2] (1985) 60 ALR 68; Re Bruce [1886] VicLawRp 144; (1886) 12 VLR 696), in our opinion, except in a case of necessity, which is not shown to have existed here, any power to vacate an order is to be exercised by the court or judge who made the original order. In Re Bruce the Full Court said:

"We are of opinion ... that the Court of Insolvency, like every other court, or judge of a court, has power to set aside an order made by it or by him upon being satisfied either that the order has been made improvidently, or that facts have been withheld from him which should have been disclosed to him, but which were not disclosed either through negligence or some other cause. Every court and every judge has, we think, power to do that, and to set aside any act of their or his own shown to have been done under circumstances which operated to deprive his mind of the power of exercising a fair judgment at the time."

The reconsideration by one judge of what another judge has done is tantamount to sitting on appeal from the first decision. On the second occasion the enquiry is one as to the order or judgment that the first tribunal would have made or given if it had received the additional evidence or argument available to the second tribunal. That question should be answered by the first tribunal.

The defendants also invoked Rule 36.07. In our opinion, breach of the plaintiffs' obligation to make proper discovery did not lead to a clerical error in the order of Judge Ostrowski, nor an error arising from any accidental slip or omission. There was no accident, no slip, no clerical error made by either the judge or counsel. Rather, the judge proceeded in ignorance of an arguably relevant fact.

For the foregoing reasons we will grant leave to appeal, hear and determine the appeal instanter, allow the appeal, set aside paragraph 4 of the order made on 14 May 2002, and in lieu thereof order that costs of the defendants of the summons by the plaintiffs be taxed on Scale D and paid by the plaintiffs to the defendants.

The orders of the court are as follows, save for the costs of today, on which we will hear counsel.

In "Other matters" it will be noted: "Mr Joel Ruffles, solicitor for the applicants/appellants, undertook to the court to ensure that the fee payable on the commencement of the below mentioned appeal and the hearing fee for one day are paid by noon on Monday 26 August 2002".

1. The applicants have leave to appeal from the order made herein by Her Honour Judge Jenkins on 16 May 2002.

4. Paragraph 4 of the said order be set aside and in lieu thereof it be ordered: "The costs of the defendant and the plaintiffs by counterclaim of the summons filed on behalf of the plaintiff on 5 April 2002, including reserved costs, be taxed on Scale D and paid by the plaintiff to the defendant and the plaintiffs by counterclaim."

Paragraph 5 will deal with the costs of today. Are there any submissions?

There is a question now to be decided as to the costs of the summons on which the applicant/appellants have had some success, but not complete success. Ms McLeod asks for an apportionment or, as a fallback, no order as to costs. Mr Stirling points out, as I gather, that in monetary terms, his clients have had greater success, and says there should be no order as to costs.

In our view, the applicants/appellants had to come to court to obtain the relief which they have been given, and in the light of the submission for an apportionment of the costs, the court will order that 50 per cent of the costs of the applicants/appellants be paid by the respondents, and I will pronounce that order in formal terms now, noting, before I do, that we have been informed that there are no costs reserved by any order:

5. One half of the costs of the applicants/appellants of the application made by summons filed on 30 May 2002 and of this appeal be paid by the respondents to the applicants/appellants.

In "Other matters" there will be a second paragraph reading, "2. A certificate is granted to the respondents under the Appeal Costs Act 1998."

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