BETWEEN : SWANCROSS CORPORATION PTY LTD (ACN 089 740 090)

THE MINISTER FOR PLANNING AND INFRASTRUCTURE FOR THE STATE OF WESTERN AUSTRALIA

Practice and procedure - Application to amend consent order to include order for costs - Turns on own facts

Rules of the Supreme Court 1971 (WA), O 21 r 10, O 26A r 4(4), O 26A r 7(2)(b)

Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529

Biala Pty Ltd & Anor v Mallina Holdings Ltd (1990) 2 WAR 381

Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400

FAI General Insurance Co Ltd & Ors v Southern Cross Exploration NL & Ors [1988] HCA 13; (1987) 165 CLR 268

Jayasinghe v Minister for Immigration & Ethnic Affairs [1997] FCA 551; (1997) 145 ALR 532

Jovista Pty Ltd v FAI General Insurance Co Ltd [1999] WASC 44

L Shaddock & Associates Pty Ltd & Anor v The Council of the City of Parramatta (No 2) [1982] HCA 59; (1983) 151 CLR 590

Lewandowski v Lovell, unreported; FCt SCt of WA; Library No 960310; 14 June 1996

Raybos v Tectran [1988] HCA 2; (1988) 77 ALR 190

Davis v Sagar, unreported; SCt of WA; Library No 980443; 10 August 1998

DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226

Gould v Vaggelas [1984] HCA 68; (1985) 157 CLR 215

Monaco v Arnedo Pty Ltd, unreported; FCt SCt of WA; Library no 940685; 29 November 1994

Re Inchcape [1942] 2 All ER 157

Rowe v Delfs [1966] WAR 49

Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446

Stowe v Stowe, unreported; FCt SCt of WA; Library No 950556; 11 October 1995

Strand v Pennywise [1991] NTSC 9; (1991) 1 NTLR 17

Symes v Commonwealth (1987) 89 FLR 356

Tak Ming Co Ltd v Yee Sang Metal Supplies Co [1973] 1 All ER 569

The Commonwealth v McCormack [1984] HCA 57; (1984) 155 CLR 273

Yates v Advance Bank, unreported; SCt of WA; Library No 980693; 1 December 1998

1 MASTER SANDERSON: The plaintiffs filed an originating summons on 1 August 2003 which sought an order pursuant to O 26A r 4(4) of the Rules of the Supreme Court 1971 (WA) that the defendant (as a "potential party") give discovery of the documents described in the schedule to the originating summons. On 18 August 2003, the defendant filed an appearance to the originating summons. On 2 October2003, the parties attended a status conference before Acting Registrar Rayney. Mr Andrew Thorpe appeared on behalf of the plaintiffs and Mr Colin Peter Wayte ("Mr Wayte") for the defendant. Orders were made by consent in terms sought in the originating summons, subject to one amendment as to timing.

2 Paragraph 3 of the consent orders stated that "The plaintiffs do pay the costs of this application".

3 On 19 January 2004, the defendant provided discovery to the plaintiffs. On 10 March 2004, documents discovered by the defendant were inspected and copies were provided to the plaintiffs on 11 March 2004. On 25 May 2004, the defendant filed a bill of costs which was listed for taxation before Registrar Dixon on 28 July 2004. By letter dated 28 July 2004, the solicitors for the plaintiffs indicated that the costs listed as items 1, 2, 3, 8, 9 and 10 in the bill of costs (a total of $2769.50), plus the taxing fee, would be agreed, but the balance was not within the scope of the consent orders. Items 4, 5, 6 and 7 in the bill were not agreed. These items were the giving of discovery, inspection, photocopying and disbursements. These items total $10,355.30. Given the contents of the plaintiffs' solicitor's letter, Registrar Dixon adjourned the taxation.

4 By letter dated 30 July 2004, it was conceded on behalf of the defendant that the consent orders did not provide for the costs of giving discovery and the plaintiffs were asked to consent to an order for these costs pursuant to O 26A r 7(2)(b). On 5 August 2004, the plaintiffs' solicitors declined to consent to such an order and maintained the Court was functus officio referring, in particular, to Lewandowski v Lovell, unreported; FCt SCt of WA; Library No 960310; 14 June 1996. By letter dated 16 August 2004, the plaintiffs were requested to reconsider the contention that the principles discussed in Lewandowski precluded the order sought on behalf of the defendant, in default of which an application would be made to this Court. The application was filed on 17 September 2004. At the time of service of the application, a request was again made that the plaintiffs' solicitors reconsider their position. No indication has subsequently been received by the defendant that the plaintiffs' position has changed.

5 The defendant now seeks, by way of chamber summons, an order pursuant to O 26A r 7(2)(b) of the Rules that the plaintiffs pay the defendant's costs of complying with pars 1 and 2 of the consent orders - those being the orders which required the defendant to provide discovery. In support of this application, the defendant relies on three alternative propositions. First it is said that the consent orders did not render the Court functus officio in relation to the exercise of power under O 26A r 7(2)(b). On that basis, it is said that it would now be open to the Court to make such an order. Alternatively, it is said O 21 r 10, the so-called slip rule, may be used to correct the consent orders so as to require the plaintiffs to pay the defendant's costs. As a further alternative, it is said that the Court should exercise its inherent jurisdiction to vary the consent orders, that being what justice demands in the circumstances.

6 It is worth mentioning at this point that I have taken the view that, as a general rule, a non-party who provides discovery ought be fully indemnified for the costs of doing so: Jovista Pty Ltd v FAI General Insurance Co Ltd [1999] WASC 44. This is certainly the case where the party from whom discovery is sought is not a party to the action and it is never intended that it should be a party to any action. In the case of a potential party, there is, I think, a case for reserving costs until the party seeking discovery has decided whether or not it will issue proceedings. If proceedings are issued, then the costs of giving discovery can be swallowed up in the overall costs of the action. But if proceedings are not issued, then there is no reason why the party giving discovery should not be fully indemnified for its costs. So, if the defendant in this case had sought an order for the costs of giving discovery, even if that aspect of the orders had not been by consent, there is every reason to believe that such an order would have been made.

7 Counsel for the defendant explained the first of his submissions in this way. It was said that the term "functus officio" described the situation in which a power conferred by statute is exercised by the person obliged to authorised to exercise it and the result of that act is that the person ceases to have any statutory authority to deal with a matter, the power granted having been exhausted: Jayasinghe v Minister for Immigration & Ethnic Affairs [1997] FCA 551; (1997) 145 ALR 532 per Goldberg J at 542. Whether the term can be properly applied to a Court which is called to exercise a statutory power depends first on whether, on proper analysis, the power already exercised renders the Court functus officio in relation to the exercise of that power and, second, the proper construction of the power subsequently sought to be invoked. Counsel submitted that, in the present case, because consent orders were made, there was no actual exercise of the power conferred by O 26A r 7(2)(a). It is said, therefore, that the Court is not functus officio and can make a costs order.

8 With respect, I do not find that argument convincing. The order in question confers power on the Court to make certain orders in certain circumstances. Absent the order, the defendant could not have been compelled to give discovery. But faced with the clear terms of the order, the defendant conceded that the plaintiffs would succeed on their application and discovery would be ordered. Hence, the consent order. It still seems to me that the learned Registrar, in making the order by consent, was exercising power under the Rules. The position might have been different if the parties never came before the Court. If they had reached agreement that the defendant would give discovery and that was done without any form of order being made, then it could well be said that no power was exercised under O 26A. But that is not the case here.

9 Nonetheless, I do think that there is real doubt as to whether or not the Court could be said to be functus officio. The starting-point in matters such as this is the High Court decision in Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529. In that case, Barwick CJ said (at 530):

"Once an order disposing of a proceeding has been perfected by being drawn up as a record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed."

10 On its face, that would seem to take care of this case. After all, there was an originating summons seeking discovery and discovery was ordered. That would seem to bring the role of the Court to an end. But on closer examination, that may not be the case. For instance, if the discovery provided by the defendant was inadequate, it would have doubtless been open to the plaintiffs to have brought the matter back to Court and to have required the defendant to provide proper discovery. So the role of the Court is not fully complete.

11 The High Court considered such a situation in FAI General Insurance Co Ltd & Ors v Southern Cross Exploration NL & Ors [1988] HCA 13; (1987) 165 CLR 268. In that case, the question was whether, after time had passed for compliance with a springing order, a Court could extend time to comply with the order. The Court held that it could. Gaudron J put the position as follows (at 289 - 290):

"Although it has been common to speak of a conditional order for dismissal as self-executing or of a proceeding upon which such an order has operated as 'dead', that seems to me to obscure the fact that a conditional order, of its nature, necessitates the exercise of the further judicial function of determining that the condition was not satisfied at the specified time. Where such an issue remains to be determined in relation to a proceeding it cannot be said that the court is functus officio. That being so, there seems to me no relevant distinction between a proceeding in which a conditional order for dismissal has been entered and a proceeding in which an order has been made but not entered ...

However, as a conditional order for dismissal such as that presently under consideration neither renders the Court functus officio nor of itself precludes the bringing of fresh proceedings there is no question of fundamental legal principle or policy brought into issue ... "

12 That seems to me to be the case here. In my view, the Court cannot be properly said to be functus officio and the consent order can be amended. The question, then, is whether it is in the interests of justice to do so.

13 Strictly speaking, it is not necessary for me to deal with other matters canvassed by counsel, but, as the matter was fully argued, I should deal briefly with each of the submissions.

"Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court on motion or summons without an appeal."

15 The Court's jurisdiction under O 21 r 10, extends to a case in which the "accidental omission" consists of a failure by counsel to seek the inclusion of something in the terms of the orders made by the Court. L Shaddock & Associates Pty Ltd & Anor v The Council of the City of Parramatta (No 2) [1982] HCA 59; (1983) 151 CLR 590 is an example of such a case. It would seem that cases where the accidental omission relates to a failure to seek a costs order are particular examples of this principle: see Raybos v Tectran [1988] HCA 2; (1988) 77 ALR 190 per Toohey J at 191.

16 That the jurisdiction exists under O 21 r 10 in such a case was recognised in Lewandowski (supra) by Murray J. Having noted that the appellants did not, in that case, seek to rely on O 21 r 10, and by way of explaining why, Murray J stated at pages 4 and 5:

"This is not a case where there was an accidental omission from the order as to costs that a special order be made in relation to the costs at first instance. It was not a case of something, to which the appellants' counsel had turned his mind, being accidentally omitted. This was a case of simple inadvertence and if power exists to vary the order it must, in my opinion, lie within the inherent jurisdiction of the court."

17 Counsel for the defendant submitted that, in using the description "simple inadvertence", Murray J was describing a situation in which a party's counsel did not at the time the orders were being formulated intend that they should include provision for a particular matter, so that the matter was therefore in a real sense merely an "afterthought". It would seem to me in this case that there had been simple inadvertence on the part of Mr Wayte. His affidavit sworn 16 September 2004 makes it plain that it was his intention on 2 October 2003 that the consent orders should provide for the plaintiffs to pay the defendant's costs of complying with the order to give discovery. He thought that the order reflected that intention. In my view, no conclusion can be reached other than "simple inadvertence" meant that the costs order was not in a form that he intended. This is not an omission that would fall within the slip rule.

18 Finally, there is the argument about the inherent jurisdiction to vary. There is, I think, a good deal of overlap between matters covered in this submission and the first submission made on behalf of the defendant. It is clear that there is a distinction to be drawn between varying the "operative and substantive part" of an order and varying matters which may be incidental thereto: see Biala Pty Ltd & Anor v Mallina Holdings Ltd (1990) 2 WAR 381, per Malcolm CJ at 390. Variation of a costs order is not ordinarily to be characterised as varying the operative and substantive part of an order: see Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400. There would, then, appear to be no impediment to varying a costs order in this case.

19 I am satisfied that it is appropriate to vary the costs order in this case. The merits are clearly with the defendant. It gave discovery and should not be out of pocket for having done so. In the course of his submissions, counsel for the plaintiffs pointed out that this was discovery from a potential party. He submitted that it could not be positively concluded that proceedings would not issued and therefore, rather than making a costs order, it was appropriate to reserve costs. There is no evidence one way or the other as to whether proceedings will be issued. Discovery was provided on 19 January 2004 and inspection took place on 10 March 2004. The plaintiffs have had enough time to make a decision. In my view, there is no reason why a costs order ought not be made now.

20 This case illustrates the need for counsel to take the utmost care in drafting orders - be they consent orders or otherwise. Of course, perfection is an illusive goal. But a little more care would have avoided what has been a costly sideshow.

21 In the circumstances, it is my view that the defendant ought pay the costs of this application. I appreciate that the defendant has succeeded in the application and that the plaintiffs, in one sense at least, maintained an unreasonable position. Nonetheless, it was an omission on the part of the defendant's solicitor which led to the order being in the form that it is. It was the defendant which was seeking the indulgence of the Court. That is sufficient to warrant the defendant paying the costs.

22 There will be an order in terms of par 1 of the chamber summons with a further order that the defendant pay the costs of this application, including reserved costs.