Mitchell v Tucker

CATCHWORDS : PROCEDURE - entry of orders - variation of orders

Hancock v Arnold [2009] NSWCA 19 CASES CITED : Roads and Traffic Authority v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336 Malouf v Prince (No 2) [2010] NSWCA 51

Ian William Mitchell (Plaintiff) PARTIES : Sheridan Ann Tucker (First Defendant) James Cressy Tucker (Second Defendant)

COUNSEL : Ms J. Pentelow (Plaintiff) Mr A. Hill (Defendants)

SOLICITORS : Nicholas W. J. Rolfe & Associates (Plaintiff) Bartier Perry (Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2008/281124 IAN WILLIAM MITCHELL v SHERIDAN ANN TUCKER JUDGMENT 1 HIS HONOUR: On 4 March 2010 I published my reserved judgment in this matter. 2 The substantive order which I made on that occasion was that the summons be dismissed. I also made, as order 2, the following order: I order that the plaintiff pay the costs of the defendant such costs to be on the party and party basis. 3 On the occasion of the publication of my reserved judgment, Counsel for the defendants thereupon stated that he wished to make an application for an order that the costs to be paid by the plaintiff to the defendants be payable on the indemnity basis, rather than on the party and party basis. Because of other matters in my list on that day, and, as I now gather, because of the fact that at least Counsel for the plaintiff was not in a position to argue the costs immediately, I stated that I would entertain such an application for indemnity costs on a date to be fixed by arrangement of the parties with my Associate. 4 Subsequently, the hearing of such an application was appointed for this day, Tuesday, 27 April 2010 at 9. 30 a.m. On the occasion when today's date was appointed for the hearing of the application I also made a direction that each party provide a written outline of submissions on or before Tuesday 20 April 2010. Counsel for each party has provided such a written outline of submissions, and those documents will be retained in the Court file. 5 The basis of the application for indemnity costs is that the defendants on two occasions, being on 11 June 2009 and on l4 July 2009, served upon the plaintiff an offer of compromise in accordance with the provisions of Part 20, rule 26 of the Uniform Civil Procedure Rules 2005. On the former occasion the offer of compromise was that the sum of $35,000 be paid to the plaintiff from the estate of the Deceased, and that the estate pay the plaintiff's costs as agreed or assessed on a party and party basis. On the second occasion the offer of compromise was that the sum of $75,000 be paid to the plaintiff from the estate of the Deceased, and that the estate pay the plaintiff's costs as agreed or assessed on a party and party basis. 6 The dismissal of the plaintiff's claim has resulted in the plaintiff receiving a result considerably less favourable to him than that which he would have received if he had accepted either of the two offers of compromise. In consequence, therefore, the defendant is entitled to an order that the costs payable by the plaintiff to the defendant be on the party and party basis up to the date of either of the offers of compromise, and on the indemnity basis after such date. 7 The plaintiff, however, submits that the Court has no power to grant the order which is being sought by the defendant. In this regard the plaintiff relies upon the provisions of Part 36 rule16 of the Uniform Civil Procedure Rules and, in particular, the provisions of subrule (3A) of that rule. The plaintiff submits that it is incumbent upon the defendants in circumstances such as the present, to file a notice of motion within 14 days of the date of the making of the orders of 4 March 2010. Further, that in the absence of such a notice of motion the consequence of the provisions of Part 36.16(1) is that there is no power in the Court to alter or vary the costs order which I pronounced on 4 March 2010, that order having been entered by being recorded in the Courts' computerised record system. 8 It must be appreciated that at the time of the delivery of my reserved judgement in this matter Counsel for the defendants clearly stated an intention to apply for a variation of the costs order which had just been pronounced, and, in doing so, stated an intention that the defendants were desirous that the costs payable by the plaintiff should be on the indemnity basis, rather than on the party and party basis. There can be little doubt that, had the Court had the time on that occasion, and had the parties been in a state of readiness for a hearing of that application, there would have been ample power in the Court then and there to vary the costs order which had just been pronounced. 9 I have been taken to a number of judicial authorities that are relevant to this question of the power of the Court to vary an order, especially a costs order, where there has not been filed within a 14 day period after the making of the order a motion seeking such variation. 10 In Hancock v Arnold [2009] NSWCA 19 (Court of Appeal, 20 February 2009, unreported) the Court, consisting of Ipp, McColl and Basten JJA, delivered a judgment which is of particular significance to the circumstances of the instant case. Their Honours referred, in paragraph 8, to the practice that was adopted in the case before them of Counsel for one of the defendants orally requesting leave to make submissions as to a special order for costs at the time when the judgment was delivered. That leave was granted, but the orders were nevertheless entered. Their Honours said, that, as no motion was filed in accordance with Part 36.16 (3A) within 14 days of judgment, the power of this Court to vary the orders with respect to costs must be addressed. Their Honours continued, at paragraphs [9] and [10]: Neither party raised any issue as to the power of the Court in the written submissions filed pursuant to leave granted orally when judgment was delivered. Two mechanisms may be available to permit what was clearly intended to occur. First, r 36.16(3) provides a power in the following terms: (3) In addition to its powers under sub rules (l) and (2), the court may set aside or vary any judgment or order except so far as it: (a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or (b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief.

The precise scope of this provision is unclear. Read literally, it might be thought to operate only in respect of orders which were not sought by any party. That reading seems implausible. Given its context, it is more likely that the distinction intended to be drawn is between substantive relief, to which the power does not extend, and ancillary or consequential relief, to which it does extend. On that understanding, a costs order would clearly fall within the latter category. Such a distinction would make practical sense because appropriate orders as to costs frequently depend upon the existence of offers of compromise which are properly not known to the Court until after substantive relief has been determined. On that basis, a party seeking to vary a costs order would not need to rely upon subr (3A). 11 I would here interpolate that that is the very situation which has arisen before me. At the time when I made a costs order, being the normal order made where proceedings are dismissed that costs follow the event, I was unaware of any offers of compromise having been served by either party upon the other party. 12 Their Honours continued at paragraph [11]: An alternative course, which would be open in a case such as the present where an oral application has been made within the l4 day period specified by subr (3A), would be for the Court to exercise the power conferred by s l4 of the Civil Procedure Act 2005 (NSW) to dispense with a requirement imposed by the rules, if satisfied that it is appropriate to do so in the circumstances of the particular case. Whether such a statutory power could permit dispensation with the requirement as to time, despite the terms of subr (3C), need not be determined: it is sufficient that the power is available to dispense with the need for filing a notice of motion in circumstances where a timely oral application has been made.

13 In the circumstances of the present case the defendants made their application immediately upon the publication of the reserved judgment and the pronouncement of the orders. The only question is whether the absence of any notice of motion being filed by the defendant precludes the Court from making an order of the nature which the defendants now seek and which the defendants foreshadowed immediately upon the delivery of the reserved judgment. 14 I have also been taken to the decision of the Court of Appeal in Roads and Traffic Authority v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336, (16 October 2009, unreported) where Campbell JA, with whom McColl JA agreed, (Her Honour being one of the three judges constituting the Court in Hancock v Arnold), and Sackville AJA, both agreed, said, at paragraph [10]: I would respectfully agree that s l4 may provide a means by which, in a particular case, such as where an oral application had been made within the l4 day period, the stringency of the l4 day time period might be ameliorated. However, whether any amelioration is offered in any particular case is completely dependent upon the Court's discretion. If a party to litigation wants to use the making of offers of compromise or writing of a Calderbank letter as a basis for applying to vary a costs order that has been pronounced, the prudent course to adopt is still filing of a notice of motion with the l4 day period. 15 In Malouf v Prince (No 2) [2010] NSWCA 51, (23 March 2010, unreported) the Court of Appeal consisting of McColl, and Macfarlan JJA and Nicholas J, said at paragraph [l0] and [11]: The applicant submitted that on the proper construction of UCPR 36.16 (3A), the power of the Court to set aside or vary was not confined to a judgment or an order specified in a notice of motion filed within the l4 day time limit, but extended to such others as might be specified by an amendment of the notice of motion made after expiry of the time limit. In other words, it was contended, in substance, that the effect of filing a notice of motion within time under UCPR 36.16(3A), albeit limited to challenging only one order, was to expose all the orders made to being set aside or varied. The l4 day window afforded by UCPR 36.16(3A) creates an exception to the principle that ordinarily a Court has no power to set aside a final judgment after it has been entered.

16 Their Honours, having considered various decided cases, continued, at paragraph [21]: There are decisions of this Court which contemplate that a costs order could be varied notwithstanding that no notice of motion was filed within the l4 day window where there had been an oral application to vary it within that period, and if either UCPR 36.16(3) or s l4 were invoked: see Hancock v Arnold Dodd v Arnold (No 2) [2009] NSWCA 19; Roads and Traffic Authority (NSW) v Refrigerated Roadways Pty Ltd [2009] NSWCA 336 (at 6); Spina v Permanent Custodians Ltd (No 2) (2009) NSWCA 419 (at 9). No such oral application was made in this case either in relation to the orders sought in the original or amended notices of motion.

17 I have already observed that in the instant case the Court was not, and could not have been, apprised of the existence of any offer of compromise served by one party upon the other until the substantive decision had been pronounced. It is only in the light of that substantive decision that the service of the offers of compromise can have any bearing upon the costs orders to which the defendant might thereupon be entitled. The defendants immediately informed the Court of their intention to seek a variation of the costs order which had only moments earlier been pronounced. A regime by which the legal representatives of the parties were directed to arrange with my Associate for a hearing of the application for indemnity costs was immediately put in place, and subsequently a direction was made for the provision of written outlines of submissions by each party. The plaintiff, through his legal representatives, raised no objection to such a regime or such a direction. 18 The plaintiff now submits that the Court has no power to entertain the present application. I am satisfied, in the light of the judgment of the Court of Appeal in Hancock v Arnold, and especially what was said in paragraphs [10] and [11] of that judgment, that where there has been a timely application announced orally by the party seeking a variation of the costs order, the Court has ample power to entertain an application for variation, despite the absence of any notice of motion being filed within the 14 day period. 19 I am satisfied that either there is no need for such a notice of motion to be filed, as contemplated by the Court of Appeal in paragraph [10] of the judgment of Hancock v Arnold, where their Honours said on that basis the parties seeking to vary an order would not need to rely on subrule (3A), that is, they would not need to file a notice of motion within the 14 day period; or, alternatively, if that requirement of the Uniform Civil Procedure Rules is considered to be essential, then I am satisfied that the Court has ample power under section 14 of the Civil Procedure Act 2005 to dispense with that requirement. If necessary, I consider that it is appropriate that I should do so in the instant case. 20 In either case, I consider that I have the power to alter or to vary the costs order pronounced by me on 4 March 2010. There is no prejudice to the plaintiff in my now entertaining an application to do so. 21 On the substantive application for indemnity costs there has hardly been any submission made on the part of the plaintiff. This is clearly a case where the consequences to the plaintiff have been less favourable than if the plaintiff had accepted even the lower of the two offers of compromise. I consider that it is appropriate that the costs payable by the plaintiff to the defendants should be on the indemnity basis, rather than on the party and party basis. 22 I make the following order. 1. I order that order 2 made by me on 4 March 2010 be varied to read: "2. I order that the plaintiff pay the costs of the defendants, such costs to be on the party and party basis up to and including 14 July 2009 and thereafter on the indemnity basis." **********

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