[2008] HCA 34
Hoskins v Van Den-Braak (1998) 43 NSWLR 290
Kendell v Carnegie (2006) 68 NSWLR 193
[2006] NSWCA 302
Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No 2) (2009) 78 NSWLR 190
Source
Original judgment source is linked above.
Catchwords
[2008] HCA 34
Hoskins v Van Den-Braak (1998) 43 NSWLR 290
Kendell v Carnegie (2006) 68 NSWLR 193[2006] NSWCA 302
Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No 2) (2009) 78 NSWLR 190
Judgment (2 paragraphs)
[1]
Judgment
These proceedings concerned the exercise of options to renew contained in a lease between the plaintiff as lessee and the four defendants as lessor.
The second and fourth defendants contended that the plaintiff had not validly exercised the options to renew. Following a hearing held on 5 and 6 July 2017, the Court delivered a judgment on 20 July 2017 in which it was held that the plaintiff had validly exercised the options (see Stonewall Hotel Pty Ltd v Papantoniou [2017] NSWSC 964 - "the principal judgment"). Orders to give effect to the reasons for judgment were made on 29 August 2017, following further submissions directed to that issue (see Stonewall Hotel Pty Ltd v Papantoniou (No 2) [2017] NSWSC 1152). Declarations were made to the effect that the plaintiff had validly exercised the options.
The second and fourth defendants filed a Notice of Appeal on 20 October 2017. The appeal is listed for hearing on 16 April 2018.
On 20 March 2018 the second and fourth defendants filed a Notice of Motion in these proceedings seeking an order that the abovementioned judgments be set aside pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 36.15(1). UCPR r 36.15(1) provides:
A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith.
It is contended by the second and fourth defendants that the judgments (or perhaps the final orders) ought be set aside because the judgments were given (or the final orders were made) irregularly.
The irregularity is said to be the fact that the third defendant (Stella Papantoniou) was at relevant times a person under legal incapacity and that, contrary to UCPR rr 7.14(1) and 7.17(1), the proceedings were carried on by Stella Papantoniou other than by a tutor, and the plaintiff took steps in the proceedings against her when no tutor had entered an appearance on her behalf.
Although not mentioned in the Notice of Motion, the second and fourth defendants also seek to rely on s 63(3)(a) of the Civil Procedure Act 2005 (NSW) to set aside the judgments (or orders). Section 63 of the Civil Procedure Act provides:
63(1) This section applies to proceedings in connection with which there is, by reason of anything done or omitted to be done, a failure to comply with any requirement of this Act or of rules of court, whether in respect of time, place, manner, form or content or in any other respect.
(2) Such a failure:
(a) is to be treated as an irregularity, and
(b) subject to subsection (3), does not invalidate the proceedings, any step taken in the proceedings or any document, judgment or order in the proceedings.
(3) The court may do either or both of the following in respect of proceedings the subject of a failure referred to in subsection (1):
(a) it may, by order, set aside the proceedings, any step taken in the proceedings or any document, judgment or order in the proceedings, either wholly or in part,
(b) it may exercise its powers to allow amendments and to make orders dealing with the proceedings generally.
(4) The court may not take action of the kind referred to in subsection (3)(a) on the application of any party unless the application is made within a reasonable time and, in any case, before the party takes any fresh step in the proceedings after becoming aware of the failure.
The second and fourth defendants contend that s 63 applies to the proceedings because there were failures to comply with the rules of court in the manner described above.
The second and fourth defendants accepted that service had been effected upon Stella Papantoniou. The complaint is made about the subsequent failure to have a tutor appointed. The case is thus unlike that dealt with in Hoskins v Van Den-Braak (1998) 43 NSWLR 290.
The Notice of Motion was brought on for hearing at short notice in circumstances where the hearing of the appeal itself is imminent.
Three affidavits were read by the second and fourth defendants in support of the motion. These were affidavits sworn by the solicitor for the second and fourth defendants, Mr Angelos, on 20 March 2018, 6 April 2018 and 9 April 2018 (as to service). In addition, part of an affidavit of Christodoulos Papantoniou sworn on 12 April 2017 was tendered. That affidavit was one of the affidavits read at the hearing last July. No other evidence was adduced.
The plaintiff opposed the motion. There was no appearance by the first defendant. At the commencement of the hearing of the motion an order was made for the appointment of Mr Timothy Young, solicitor, as tutor for Stella Papantoniou for the purposes of the application. Mr Young was recently appointed by White JA as tutor for Stella Papantoniou in the appeal proceedings. The order was made at the suggestion of the Court, in circumstances where it seemed to me that it would be incongruous for Stella Papantoniou to have a tutor for the purposes of the pending appeal, but not for the purposes of the present application. The order was not made on the basis of my own assessment of Stella Papantoniou's capacity. The making of the order was supported by the second and fourth defendants. The plaintiff neither consented to nor opposed the making of the order. Mr Young took no position one way or the other in relation to the orders sought in the motion.
The evidentiary basis for the contention that the third defendant was a person under legal incapacity at relevant times is found in paragraph 4 of the affidavit of Christodoulos Papantoniou sworn on 12 April 2017. That paragraph reads:
In or about mid 2014 my mother was diagnosed with Alzheimer Disease. Currently my mother has stage three Alzheimer's, which means she requires assistance with day to day tasks and is no longer able to engage in conversation longer than a minute or two, she often forgets names of loved ones. My father is legally blind.
Notwithstanding that evidence, which was read at the hearing, no party raised any question about a need for a tutor to be appointed for Stella Papantoniou. Any party could have applied for such an appointment to be made (see UCPR r 7.18(6)). Neither was the question raised by the Court of its own motion.
The evidence was referred to in the principal judgment at [15] as follows:
The reference in the email to Stella Papantoniou is to the third defendant who was at that time practising as the sole solicitor at Papantoniou Blake Lawyers. She was not called as a witness in the proceedings. However, Christodoulos Papantoniou, the son of John and Stella Papantoniou, gave evidence that in mid-2014 his mother was diagnosed with Alzheimer's Disease, and is no longer able to engage in conversation longer than a minute or two. Christodoulos Papantoniou, who does not have legal qualifications, became the Practice Manager of Papantoniou Blake Lawyers in October 2014.
At [21] of the principal judgment it was stated:
None of the defendants gave evidence. The absence of Stella Papantoniou as a witness is explained by the evidence, referred to earlier, of her present mental condition. However, the first and third defendants adduced evidence from their son Christodoulos, and the third and fourth defendants adduced evidence from their son, Panos Papantoniou.
Mr Angelos deposed that "in the course of the preparation of the appeal" it was determined that Stella Papantoniou required a tutor to be appointed for the purposes of the appeal. On 7 March 2018 Mr Angelos sent a letter to Christodoulos Papantoniou (and an email to Papantoniou Blake Lawyers) which contained the following:
In light of paragraph 4 of your affidavit of 12 April 2017 at first instance, we are of the view that a Tutor must be appointed in the interests of your mother Stella Papantoniou for the purposes of the Appeal.
Kindly advise by reply whether you agree to act as tutor for your mother Stella Papantoniou.
Mr Angelos received no response, so steps were then taken to have a "third party" appointed as tutor. Mr Angelos further deposed that:
In giving consideration to the appointment of a tutor for the purposes of the appeal, it was realised that no tutor was ever appointed in the proceedings at first instance decided by Darke J.
Mr Angelos was not cross-examined.
The first matter to consider is whether Stella Papantoniou was at any relevant time during the proceedings (that is, prior to the giving of judgment and the making of final orders) a person under legal incapacity. By s 3 of the Civil Procedure Act "person under legal incapacity" is defined to mean:
person under legal incapacity means any person who is under a legal incapacity in relation to the conduct of legal proceedings (other than an incapacity arising under section 4 of the Felons (Civil Proceedings) Act 1981) and, in particular, includes:
(a) a child under the age of 18 years, and
(b) an involuntary patient, a forensic patient or a correctional patient within the meaning of the Mental Health Act 2007, and
(c) a person under guardianship within the meaning of the Guardianship Act 1987, and
(d) a protected person within the meaning of the NSW Trustee and Guardian Act 2009, and
(e) an incommunicate person, being a person who has such a physical or mental disability that he or she is unable to receive communications, or express his or her will, with respect to his or her property or affairs.
Further, Uniform Civil Procedure Rules r 7.13 provides that in Division 4 of Part 13 "person under legal incapacity" includes a person who is incapable of managing his or her affairs.
The plaintiff submitted that the evidence, which consisted only of paragraph 4 of Christodoulos Papantoniou's affidavit, was insufficient to establish that Stella Papantoniou was a person under legal incapacity at any relevant time during the proceedings. It was submitted that the evidence was not given by a medical expert, and it fell well short of showing that Stella Papantoniou was not "capable of understanding, with the assistance of such proper explanation from legal advisors and experts in other disciplines as the case may require, the issues on which consent or decision is likely to be necessary in the course of the proceedings" (see Smilevska v Smilevska [2015] NSWSC 1794 at [28] per Slattery J).
It is true that Christodoulos Papantoniou gave only lay evidence about his mother's condition. However, given his relationship with his mother and his role over a number of years representing his parent's interests (including by way of Power of Attorney), there is no reason to doubt that he accurately described the diagnosis his mother had been given in 2014. Further, Christodoulos Papantoniou was able to give evidence of his mother's actual condition at the time his affidavit was sworn. He deposed that she was "no longer able to engage in conversation longer than a minute or two, she often forgets names of loved ones". Again, there is no reason to doubt that testimony.
I considered that this evidence provided an explanation as to why Stella Papantoniou was not called as a witness (see the principal judgment at [21]). The evidence suggested that she would have great difficulty giving worthwhile evidence concerning events that took place in 2010. I note that in the course of submissions in the present application, counsel for the second and fourth defendants accepted that Stella Papantoniou could not have given evidence.
However, the question whether Stella Papantoniou was a person under legal incapacity is a different one. She would only fall within the definition found in s 3 of the Civil Procedure Act if she was "an incommunicate person, being a person who has such a physical or mental disability that…she is unable to receive communications or express…her will, with respect to…her property or affairs". I do not think that the evidence goes so far as to establish that position. Being unable to engage in conversation for longer than a minute or two, and being forgetful, even about the names of "loved ones", does not mean that the person is unable to receive communications, or express their will with respect to their property or affairs. It also does not mean that the person is incapable of managing his or her affairs. I think that more evidence would be required in order to reach those conclusions. Accordingly, I am not satisfied on the evidence that prior to the giving of judgment and the making of final orders Stella Papantoniou was a person under legal incapacity. It was not suggested that I was bound, by reason of the order made by White JA, to be so satisfied.
I appreciate, of course, that there is tension between that conclusion and the making of the order, at the commencement of this application, appointing Mr Young as tutor. However, that order was only made to avoid incongruity between the positions of Stella Papantoniou in this application and in the pending appeal and, as I have said, the order was not based on my own assessment of her capacity.
My conclusion that Stella Papantoniou was not, prior to the giving of judgment and the making of final orders, a person under legal incapacity has the consequence that the irregularity asserted by the second and fourth defendants has not been established. However, in case my conclusion is incorrect, I will proceed to deal with the application on the assumption that Stella Papantoniou was, at relevant times, a person under legal incapacity.
If that was the case, the carrying on of proceedings by Stella Papantoniou without a tutor being appointed for her would have been contrary to Uniform Civil Procedure Rules r 7.14(1); and the taking by the plaintiff of steps against Stella Papantoniou in the proceedings, without a tutor entering an appearance on her behalf, would have been contrary to Uniform Civil Procedure Rules r 7.17(1).
A question arises as to whether the judgments and final orders were thus given or made (as the case may be) irregularly for the purposes of Uniform Civil Procedure Rules r 36.15(1). In Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No 2) (2009) 78 NSWLR 190; [2009] NSWCA 387 the Court of Appeal stated (at [16]-[17]):
The focus of r 36.15(1) is on the judgment or order that is attacked, and the question is whether it was "given ... entered, or ... made" irregularly etc. The focus is on irregularity in those steps, not on the merits of any decision, or the irregularity of other steps in the proceedings, or in the proceedings below.
The rule applies with particular force to default or consent judgments and orders, and those given or made ex parte. It can only have limited application to judgments and orders made or entered after a hearing on the merits at which all parties were represented and fully heard.
I am inclined to think that the giving of a judgment against, or the making of orders that affect, a person under legal incapacity, where no tutor has been appointed for the person, would be considered irregular for the purposes of Uniform Civil Procedure Rules r 36.15(1). The failure to comply with the requirements of the rules continues whilst no tutor is appointed. It seems to me that it could be said that the person under legal incapacity has not been "represented and fully heard". In my view, if Stella Papantoniou was a person under legal incapacity the Court could, upon sufficient cause being shown, exercise the power under Uniform Civil Procedure Rules r 36.15(1) to set aside the judgments and orders.
The failures to comply with the rules of court would also be treated as an irregularity for the purposes of s 63(2) of the Civil Procedure Act. Such irregularity does not invalidate the proceedings, any step taken in the proceedings, or any judgment or order made in the proceedings, but the Court has a discretion under s 63(3)(a) to set aside those aspects of the proceedings.
In Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No 2) (supra) the Court of Appeal considered (at [44]-[48]) that, having regard to the general rule that final orders regularly made and formally entered can only be challenged on appeal or in proceedings to set aside the judgment for fraud, the word "judgment" in s 63(3)(a) should be given a narrow meaning that does not extend to perfected final decisions when the parties were "fully heard". Again, I am inclined to think that if Stella Papantoniou was a person under legal incapacity the judgment and orders can be considered not to be regularly made, and she can be considered to be a party that has not been "fully heard". On that basis, the judgments and final orders would be susceptible of being set aside under s 63(3)(a) as well as under Uniform Civil Procedure Rules r 36.15(1).
Counsel for the second and fourth defendants submitted that the requirements of the rules concerning the appointment of tutors for persons under legal incapacity should be seen as important safeguards for such persons who need protection. It was submitted that the failure to appoint a tutor for such a person (who may be a child) was an irregularity of significance. It was further submitted that if a tutor had been appointed for Stella Papantoniou, the tutor may have taken a different position to that actually taken by the solicitors and counsel who appeared for her in the proceedings, and the hearing could potentially have run differently.
Counsel for the second and fourth defendants, when pressed to identify how the hearing may have run differently, could not point to any approach, or any argument, that was not available to the second and fourth defendants, who actively opposed the plaintiff's claims. The second and fourth defendants nonetheless maintained that the judgments and orders should not stand against Stella Papantoniou, with the consequence that they must also fall in relation to all other defendants.
In considering whether a judgment or order should be set aside under UCPR r 36.15(1) on the ground of the irregularity, it is necessary to consider the nature of the irregularity and its consequences. A failure to appoint a tutor when one is required is an irregularity that goes to the quality of representation of a litigant who, by definition, is required to be represented in a particular manner. An irregularity of that kind can obviously have serious consequences for such a litigant, but that is not necessarily so.
In the present case Stella Papantoniou, assuming her to be a person under legal incapacity at relevant times, was deprived of representation in the proceedings by a tutor. Instead she, along with her husband (the first defendant), was represented by solicitors and counsel engaged by them or on their behalf. Through those representatives, Stella Papantoniou and her husband did not oppose the plaintiff's claims that it had validly exercised the options to renew the lease. I accept that if a tutor had been appointed for Stella Papantoniou it is possible that the tutor may have taken a different position.
That may be considered unlikely, given the stance taken by her husband and the evidence given by Christodoulos Papantoniou, who had for many years been involved in representing his parents' interests (see the principal judgment at [24]), but it is a possibility nonetheless. I note in passing that when the question of a tutor arose in the course of the appeal in March 2018, it was initially suggested that Christodoulos Papantoniou would be appropriate to fulfil that role.
However, even if a tutor had been appointed and had taken a different position, it is difficult to see how that would have led to any different outcome in the proceedings. Even if a tutor decided that it would be in Stella Papantoniou's interests to oppose the plaintiff's claim, there is no reason to think that this would have led to any different judgment or orders. That position was taken with vigour by the second and fourth defendants, who were themselves represented by solicitors and counsel. As I have said, counsel for the second and fourth defendants (who appeared for them at the trial) could not identify any approach to the defence, or any argument, that a tutor could have pursued that was not available to the second and fourth defendants. It was not suggested that the second and fourth defendants themselves failed to raise any argument at the hearing in opposition to the plaintiff's claim. In these circumstances, I am not satisfied that the absence of a tutor for Stella Papantoniou has caused any prejudice or injustice to her. The judgments and orders in this case would almost certainly have been given and made even if a tutor had been appointed for Stella Papantoniou.
In Burrell v R (2008) 238 CLR 218; [2008] HCA 34 the High Court stated at [15]:
Secondly, it is important to recognise that underpinning consideration of the issues presented in this matter are fundamental principles about finality of litigation. As was said in D'Orta-Ekenaike v Victoria Legal Aid: "A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances." That tenet finds reflection in rules concerning the bringing of an action to set aside a final judgment on the ground that it was procured by fraud and in doctrines of res judicata and issue estoppel. The principal qualification to the general principle of finality is provided by the appellate system. But in courts other than the court of final resort, the tenet also finds reflection in the restrictions upon reopening of final orders after they have been formally recorded.
Reference should also be made to Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No 2) (supra) at [44]-[45].
In Kendell v Carnegie (2006) 68 NSWLR 193; [2006] NSWCA 302 Bryson JA (with whom Hodgson and McColl JJA agreed) stated at [45] that "sufficient cause" (as found in a rule of the District Court concerning the setting aside of judgments for irregularity, illegality and fraud) recognised the need for finality by protecting judgments from being set aside for slight or uncertain causes. That statement was applied by Garling J in Weber v Aquaqueen International Pty Ltd [2013] NSWSC 1181 at [119] in the context of UCPR r 36.15.
I am not satisfied that in the circumstances of this case sufficient cause has been shown to set aside the judgments or final orders of the Court due to the irregularity asserted by the second and fourth defendants. In my view, leaving the judgments and orders in place would cause no prejudice or injustice to Stella Papantoniou, or to any other party, including the second and fourth defendants. It is relevant to note that if the judgments and orders were set aside, the parties to the litigation would suffer the considerable costs that would thus be wasted, and the resolution of the dispute would be further delayed. For the above reasons, I would not set aside the judgments and final orders pursuant to UCPR r 36.15(1).
For similar reasons, I would not exercise the power under s 63(3)(a) of the Civil Procedure Act to set aside the judgments and final orders. It is not necessary to consider the submission made by the plaintiff that it would not be open to the Court to exercise the power under s 63(3)(a) because the application was not made within a reasonable time.
The Notice of Motion filed on 20 March 2018 will be dismissed with costs.
[2]
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Decision last updated: 11 April 2018