Surfing Hardware International Holdings Pty Limited and Ors v William McCausland and Anor

Surfing Hardware International Holdings Pty Limited and Ors v William McCausland and Anor - [2007] NSWIRComm 285 - NSWIRComm 1995 case summary — Zoe

[81]

22 The main elements of the respondents' submissions may be summarised as follows: · This is a strike out motion. The appellants must demonstrate that no order could be made which would be within jurisdiction. The resulting burden is a heavy one. The jurisdiction to terminate an action summarily for want of a cause of action is to be sparingly employed and ought not to be used save where the lack of the cause of action was clearly demonstrated. The appellants have not demonstrated that the orders sought could not be made (see Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 at 447-448 and Nagle (T/as W D & J L Nagle & Sons) v Tilburg & anor (1993) 51 IR 8 at 10-11 for support for this line of argument). · The Full Bench has a wide discretion. For example, the power to confer the role of the Full Bench on one of its members is unlimited. · The respondents do not challenge any aspect of what the court decided in the appeal. In the interests of justice, and in the exceptional circumstances of this case, it is necessary to add to the orders or vary the orders, not to take away the orders that have been made: to amend or vary those orders or add to them or, in other words, to properly deal with the scope of the appeal decision. "What we are asking is [sic] take the decision already made; apply it to the new or subsequent facts and to make additional amended orders of the same kind. That is, orders to protect the confidentiality of the information". This is not the situation dealt with in the authorities to which the appellants referred. · These proceedings are the appeal proceedings. They have not been finalised to that effect. True it is a judgment has been given but these proceedings are still alive. The issue of costs has not been determined in the appeal proceedings. This is not a re-opening; what is sought are amendments to orders in proceedings that are extant. · The appellants' decision to withdraw their retainer from Harmers "strikes at the very heart of the subject matter that this Court was asked to deal with". Considerations of justice weigh heavily here. · The judgment of Gibbs J in Bailey v Marinoff (1971) 125 CLR 529 at 540 is authority for the proposition that as an exception to the rule regarding finality of litigation it is open to the Court, in certain circumstances, to make supplemental orders. · Section 192 does not define the limits of the Full Bench's power. See s 181 regarding the power to award costs, s 190A regarding the power on appeal to deal with interlocutory applications and s 170 regarding the Court's power to amend proceedings. · As to the question of costs, in the context of a strike out motion, the Full Bench does not have all of the evidence before it. Evidence may be adduced for instance (as a consequence of a notice to produce served on the appellants, which has not yet been called upon because of the way the proceedings have progressed) that may go to the heart of the costs issue, such as the circumstances surrounding the change of solicitor and the timing of the decision to withdraw Harmers' retainer. Proposed orders 4 and 5

[102]

36 The appellants contended that the decision in Gamser presented another reason why the appeal could not be re-opened. We agree with that contention. At 154, Aickin J stated: The majority judgments in Bailey v. Marinoff appear to me to make it clear that there is no inherent power to set aside judgments by reason of changed circumstances on application made after the case has been finally disposed of. It is sufficient to quote what Menzies J. said (1971) 125 CLR, at pp 531-532: This appeal is not concerned with the power of a court to alter orders in pending litigation. It is concerned with the power of a court to make an order in litigation which, without any error or lack of jurisdiction, has been regularly concluded and is no longer before the court. To recognize the problem is, I think, to solve it. However wide the inherent jurisdiction of a court may be to vary orders which have been made, it cannot, in my opinion, extend (to) the making of orders in litigation that has been brought regularly to an end. 37 In par [11] of the second amended notice of motion, which spelt out one of the grounds upon which the respondents relied in relation to Part A of the motion, it referred to the "conduct by the Appellants after the date of the judgment". Gamser makes it clear that there is no inherent power to set aside judgments by reason of changed circumstances on application made after the case has been finally disposed of. 38 Finally, in relation to proposed orders 4 and 5, we accept the appellant's submission that even if there was power to re-open, the Court would not permit such a course unless it was satisfied that the respondents would suffer "irremediable injustice" as identified in Codelfa Construction at 38. If there is merit in the respondents' claims regarding circumstances that arose after the Full Bench made the orders on 11 April 2007, we are unable to discern any bar to the respondents pursuing a remedy in the substantive proceedings. Proposed orders 1, 2 and 3 39 We turn to proposed orders 1, 2 and 3. It will be recalled the appellants contended that there was no basis upon which the Court could make orders 1, 2 and 3 and the application to do so was, therefore, hopeless and should be dismissed. The respondents did not demur from the appellants' classification of the grounds supporting the proposed orders and it seems to us the classification was correct, namely, that the appellants' decision to withdraw Harmer's retainer was relevant to the question of costs and, secondly, that there had not been compliance with an undertaking or undertakings that had been given to the Court and that this was relevant to the question of costs of the appeal. 40 As it was submitted by the appellants, in relation to the first category the only thing the Court knows about the appellants' decision to withdraw Harmer's retainer is that the retainer was withdrawn with effect from 5 July 2007. That piece of information, of itself, says nothing about the appellants' conduct of the appeal such as might bear upon the question of costs and the respondents did not attempt to adduce any evidence that may have thrown more light on the matter. Importantly, however, the withdrawal of the retainer occurred after the appeal decision and orders were made. Consistent with the view taken by McDougall J in Leidreiter, we consider that subsequent events are incapable of establishing any "relevant delinquency" for the purpose of determining the basis upon which those costs should be paid. As we understood them, the respondents contended that it was possible that inferences might be drawn from the evidence in proceedings relating to their second amended motion that shows that circumstances relating to the change of solicitors was not altogether an event that occurred after the appeal decision was given. That is speculation on the respondents' part; there is nothing to indicate there was any "delinquency" on the part of the appellants, or for that matter, their solicitors during the appeal proceedings. 41 The same observations we have made in relation to the first category of grounds apply equally to the second category. Further, the remedy in relation to non-compliance with orders made by the Full Bench in the appeal relating to undertakings does not properly lie in orders 1, 2 and 3 but rather, as the appellants submitted, in proceedings to enforce the undertakings. 42 Between 24 April 2007 and 22 May 2007 the parties filed their submissions on costs as a result of the directions given by the Full Bench for the provision of written submissions on costs. By orders 2 and 3 the respondents now seek leave to admit in relation to the question of costs further evidence and leave to make further submissions as to costs. In circumstances where it would appear that the matters that have motivated the respondents to seek such orders relate to events that occurred after the appeal decision and orders were made, the respondents have not demonstrated any basis upon which we should countenance such orders. 43 We propose to dismiss the respondents' second amended notice of motion. That leaves the question of costs arising out of the appeal and the appellants' strike out motion. Costs 44 The appellants contended that the respondents forthwith pay the appellants' costs of: (i) the Notice of Motion heard by Marks J on 14 July 2006, as agreed or assessed;

[113]

52 The application to have Harmers permanently restrained from acting for the appellants was a separately identifiable matter that has now been finally dismissed. As the appellants contended, that application was not a matter arising out of any issue between the parties in the substantive proceeding and is discrete in the true sense. No issue in the trial of the balance of the proceedings can cast doubt on the correctness of order for costs in relation to the appeal (Baramon). Our decision in relation to the appellants' strike out motion confirms this to be the case. 53 A further consideration is the fact that Harmers no longer represent the appellants in the substantive proceedings; that firm's retainer has been withdrawn. The appellants have yet to file their evidence in the substantive proceedings and with new solicitors being retained, it is likely to be many months before the substantive proceedings are heard and determined. 54 We consider there is a clear-cut case for exercising our discretion to order that the costs of the appeal be paid forthwith. In relation to the motion at first instance, however, the respondents contended that Richards v Kadian & Ors (No 2) [2005] NSWCA 373 was authority for the proposition that the costs of that motion should not be payable forthwith and that such costs should be costs in the cause. It was submitted that the motion heard by Marks J, and determined in the respondents' favour, had the significant effect of causing the undertakings which are now relied on by the appellants and the Court to be offered and subsequently given to the Court. 55 It will usually follow a successful appeal that the appellant would receive its costs of both the appeal and the matter at first instance: Day v Smidmore (No 3) (2006) 149 IR 408 at [23], [24]. Accordingly, whilst we propose to order that the appellants' costs of the first instance proceedings are to be paid by the respondents as agreed or assessed, we do not propose to order that those costs be paid forthwith. In relation to the appellants' strike out motion the appellants' shall have their costs as agreed or assessed, but as there were simply no submissions by the appellants seeking an order that the costs of the strike out motion be paid forthwith, we do not propose to so order. 56 As to the costs of the notice of motion of 20 February 2007 regarding the uplifting by the respondents of exhibit DCS1 for the purpose of having it forensically tested, that motion was refused. In proceedings before the Full Bench on 6 March 2007, Mr Dixon of senior counsel for the appellants raised the question of costs of the motion. The Full Bench asked why costs would not be in the cause and it is plain from the record of the proceedings that senior counsel did not cavil with that course. Nevertheless, no order was made in relation to costs of the motion. Having regard to our approach in relation to the costs of the appeal and the costs of the motion before Marks J, where we have adopted the rule that costs follow the event, we propose to order that the appellants shall have their costs of the motion of 20 February 2007, as agreed or assessed. Orders

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