W R Carpenter Aust Ltd v Ogle & Anor [1997] QCA 383

Court of Appeal (Qld)|1997-10-28|Before: Before Pincus J, Williams J, Cullinane J, Mr AM, Pincus J

I have read and agree with the reasons for judgment of Williams J, and agree with his Honour that the appeal should be allowed.

By the action commenced in 1985 the respondent, WR Carpenter Australia Limited, sought orders, including an order of foreclosure, with respect to various parcels of land mortgaged by the appellant, DG Ogle, to the respondent. Consequent upon the appellant's failure to take interlocutory steps as directed by the court his defence was struck out on 20 February 1991.

In about August 1991 the respondent was desirous of applying for an order of foreclosure and at that time the appellant had no address for service in accordance with the Rules. In consequence service of the appropriate papers was effected on the appellant by reliance on O.93r.12; the relevant papers were affixed to the notice board in the Registry. The learned primary judge was correct in concluding that in those circumstances the proceedings were not strictly ex parte - they were made on due notice being given to the appellant.

The matter came before the court on 19 September 1991 and a foreclosure order was made. There was no appearance by or on behalf of the appellant.

On 20 May 1996 an application was brought before the court seeking to have that order set aside. The learned primary judge declined to grant that relief; for reasons which he gave he concluded that he had no jurisdiction or power to set aside the judgment in question.

From that decision this appeal has been brought. The appellant also filed a notice of motion and supporting affidavits seeking leave to adduce further evidence on the hearing of the appeal. That material solely related to the way in which the discretion should be exercised if the court had jurisdiction to set aside the judgment in question. This court determined that it should only rule upon the issue whether or not the primary judge had jurisdiction to set aside the foreclosure order; if this court concluded that there was jurisdiction then all parties conceded that it was preferable to have the matter remitted to a chamber judge to consider the discretionary matters.

It was submitted to the learned primary judge that the Supreme Court had inherent jurisdiction to set aside the foreclosure order and also that it had such power under the Rules of Court, particularly O.39r.33. The learned primary judge rejected both submissions, but regrettably he was not referred to the decision of the High Court in Taylor v. Taylor [1979] HCA 38; (1979) 143 CLR 1. Submissions before the primary judge concentrated upon the earlier decision of the High Court in Bailey v. Marinoff [1971] HCA 49; (1971) 125 CLR 529 and that decision was central to the judgment he delivered. The New South Wales Court of Appeal had ordered that if appeal books were not filed and served by a certain day the appeal should stand dismissed. Those conditions were not satisfied and in consequence the appeal stood dismissed. Notwithstanding that, the Court of Appeal subsequently ordered that the time for filing and serving the documents should be extended so that there had been sufficient compliance with the original order. The High Court held that there was no inherent power in a court to deal further with an appeal which had already been dismissed by formal order. It is sufficient to refer to brief passages from the judgments of Barwick CJ and Menzies J. The former said at 530-1:

"Once an order disposing of a proceeding has been perfected by being drawn up as the 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 power to reinstate a proceeding of which it has finally disposed. In my opinion, none of the decided cases lend support to the view that the Supreme Court in this case had any inherent power or jurisdiction to make the order it did make, its earlier order dismissing the appeal having been perfected by the processes of the Court."

"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 in which, without any error or lack of jurisdiction, has been regularly concluded and is no longer before the court. To recognise 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 the making of orders in litigation that has been brought regularly to an end."

"It is a well settled rule that once an order of a court has been passed and entered or otherwise perfected in a form which correctly expresses the intention with which it was made the court has no jurisdiction to alter it."

It is significant for present purposes that his Honour at 540 recognised as an exception to that proposition the situation where the court was concerned with an "order made ex parte"; he there made reference to Woods v. Sheriff of Queensland (1895) 6 QLJ 163 at 164.

The learned primary judge appears to have considered that the application before him was governed by the ratio of Bailey v. Marinoff, and he distinguished Woods v. Sheriff of Queensland on the basis that in the matter before him the order was not made ex parte in the sense that the appellant had not been served. As I have already noted it is unfortunate that the learned primary judge was not referred to the decision of the High Court in Taylor. There the wife brought proceedings for dissolution of marriage which were duly served on the husband, but through no fault of his own he was neither present nor represented at the hearing of the petition. An order for decree nisi was made and it became absolute. The husband then applied for a variation of the orders originally made. When that application came on for hearing the wife, through no fault or her own, was neither present nor represented. The original order was varied by order made on the later application. An appeal ultimately came before the High Court. It was held that the court (specifically the Family Court) had inherent jurisdiction to set aside an order made in default or ex parte. It was held that both the original order and the variation order should be set aside.

The following extracts from the leading judgments clearly indicate what was decided in Taylor. Gibbs J began his analysis of the relevant principles by referring to Cameron v. Cole [1944] HCA 5; (1944) 68 CLR 571 and Grimshaw v. Dunbar (1953) 1 QB 408. He quoted a passage from the judgment of Rich J in the former case at 589 to the following effect:

"It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case."

From the latter case he quoted the following passage from the judgment of Jenkins LJ at 416:

"Be that as it may, a party to an action is prima facie entitled to have it heard in his presence; he is entitled to dispute his opponent's case and cross-examine his opponent's witnesses and he is entitled to call his own witnesses and give his own evidence before the court. Prima facie that is his right, and if by some mischance or accident a party is shut out from that right and an order is made in his absence, then common justice demands, so far as it can be given effect to without injustice to other parties, that that litigant who is accidentally absent should be allowed to come to the court and present his case - no doubt on suitable terms as to costs ..." (My emphasis)

It was after referring to those passages that Gibbs J observed at 4 that the failure to appear at the initial hearing "was not due to any fault on the part of" the husband. He then went on at 8 to say that it "is clear that the majority of the court in Cameron v. Cole accepted that a court, whether superior or inferior, has inherent power to set aside an order made against a person who did not have a reasonable opportunity to appear and present his case." In his view because the husband had no actual notice of the original hearing date "the court had inherent power to set the order aside"; that power was a discretionary one.

Mason J after citing the passage quoted above from Grimshaw v. Dunbar went on to say at 16:

"A jurisdiction to set aside its orders is inherent in every court unless displaced by statute. In my opinion the jurisdiction extends not only to the setting aside of judgments which have been obtained without service or notice to a party ... but to the setting aside of a default or ex parte judgment obtained when the absence of the party is due to no fault on his part." (my emphasis)

"The principle that parties to litigation are entitled to be present and heard, either in person or by a duly authorised legal representative, is of fundamental importance and involves the consequence that, where through no fault of his own, a party is deprived of that entitlement, prima facie any order of a court made against him may be set aside by that court. I can see no basis for confining the application of that principle to cases where there has been a failure to serve the process or give other appropriate notice." (my emphasis)

Stephen J in agreeing with Gibbs J referred to Bailey v. Marinoff. There is no doubt that the members of the court in Taylor were aware of the decision in Bailey v. Marinoff, and did not consider that there was any inconsistency between the two decisions. In my view they are clearly reconcilable. Bailey v. Marinoff is concerned with the power of a court to vary a perfected order, whereas Taylor is concerned with the jurisdiction of the court to set aside an order made either in default or in ex parte proceedings.

The Full Court of the Federal Court applied Taylor in Liquor Commission of the Northern Territory v. Gaye Pty Ltd (1986) 10 FCR 394, though that was a case of the order having been obtained ex parte. Burchett J applied the principle in Re Anasis ex parte Total Australia Ltd [1985] FCA 458; (1985) 11 FCR 127 to set aside a sequestration order made in circumstances where, through no fault of his own, the debtor did not appear on the hearing of the petition though he had been duly served. Young J recognised the Taylor principle in Easyfind (NSW) Pty Ltd v. Paterson (1987) NSWLR 98, though on his findings that was not an appropriate case for its application. Finally, an observation by Priestley and Handley JJA in Chappuis v. Filo (1990) 19 NSWLR 490 at 512 should be noted. There they said that if "the procedure adopted by the Court has unwittingly deprived the second respondent of his right to be heard, without any fault on his part, and if he has been prejudiced by these orders he would have the right to apply to have those orders, which so far as he was concerned were pronounced ex parte, set aside: see Taylor v. Taylor".

It follows, in my view, that if the appellant here satisfied the court that his non-appearance when the foreclosure order was made was not due to any fault on his part, then the Supreme Court had an inherent jurisdiction to set aside that order in the exercise of its discretion. The learned primary judge was therefore wrong in holding that the court had no inherent jurisdiction to set aside that order. Because of the approach he adopted, due no doubt at least in part to the fact that Taylor was not cited to him, he did not direct his mind to the question whether the appellant's failure to appear was due to no fault on his part. It is sufficient for this court to note that there is evidence which prima facie could arguably support a finding either way on that question. That is a factual matter which in the circumstances should not be determined by this court. It follows that the matter should be remitted for further consideration by a chamber judge.

Senior counsel for the appellant also submitted that, in addition to its inherent jurisdiction, the Supreme Court had power pursuant to the Rules to set aside the order for foreclosure. O.39r.33 provides, so far as is relevant, that the "verdict or judgment obtained where one party does not appear at the trial may be set aside by the Court or a Judge upon such terms as may be just." As already noted in this case the defence of the appellant was struck out for non-compliance with directions given by the court, and thereafter he was in the position of a defendant who had not pleaded. The application for the foreclosure order was made pursuant to O.19r.4 which provides:

"In any action in which an account has been taken under rules 1 to 3 the plaintiff may, at any time after the account has been taken, and in any action for administration of real or personal estate, or for the execution of a trust, and in any action for limited relief under the provision of Order 4, rule 12 or 16 in which the writ of summons has been specially endorsed under Order 6, rule 10, and in any action in which the writ has been specifically endorsed under the provisions of Order 6, rule 11, the plaintiff may at any time after appearance, or after the time for appearance has expired, apply to the Court for judgment in a summary way without pleadings, and the Court shall thereupon proceed to hear and determine the action and give such judgment as may be just."

This was a matter within O.6r.11. The argument was put to the primary judge, and repeated in this court, that the procedure under O.19r.4 was a "trial" for purposes of O.39.r33. The learned primary judge, influenced by an observation of Wanstall J in Seymour v. Holm (1961) Qd. R. 214, held that O.39r.33 did not apply because the judgment in question was not obtained "at the trial". In my respectful view a careful reading of Seymour v. Holm does not support the broad proposition for which it was cited by the learned primary judge. In that case certain questions had been referred to a special referee and thereafter there was a motion for judgment in accordance with the findings of the special referee. The defendant, who had actively participated in the proceedings before the special referee, did not appear on the hearing of that motion. Wanstall J was concerned with a subsequent application to have the judgment set aside. Relevantly he said at 220:

"I can see no reason why O.39r.33 should not prima facie apply where a trial follows the course taken by this one. The rule is one making up the Order governing the procedure for trying issues between parties, and it was under one of the other rules of the same Order, i.e. rule 7, that the special referee was appointed. That rule appears under the subheading of "Mode of Trial", and I think that the procedure adopted is properly and literally to be regarded as one of the stipulated modes of trial. The report thus obtained leads to judgment, which is the end of all trials. But I think that this rule, on its face, is intended to be restricted to circumstances in which there has been literally a complete failure of a party to attend at the trial. ... Here the defendant did attend at the inquiry by the special referee, which, as I hold, was properly constituted as the mode of trial of the issues between him and the plaintiff. He attended that inquiry and took part in it up to a point, and then ignored it. He is in the position of a party who appears and takes part in a trial in the usual manner in court and then absents himself part way through and takes no further interest in the proceedings. If, after verdict, judgment had been given on motion in the absence of a party so conducting himself, the rule would plainly not apply. I think that is the position here. Consequently I treat the rule as being inapplicable, and the defendant's last resort is to the inherent jurisdiction."

Here the appellant did not participate at all in the proceedings under O.19r.4 and that clearly distinguishes his conduct from that of the defendant in Seymour v. Holm. I do not read the judgment of Wanstall J as necessarily limiting the scope of operation of O.39r.33 to a "trial" held in accordance with O.39.

The term "trial" is not defined in the Rules. Counsel for the appellant referred the court to the discussion of the term "trial" in Jowitt's Dictionary of English Law. To that may be added the primary definition appearing in Butterworths Australian Legal Dictionary: "A fact finding process, by which the court resolves disputed issues of fact presented by the parties and applies appropriate legal rules, culminating in a judgment." That, in my view, is an accurate description of what is meant by the term "trial" when used in the Rules.

O.19r.4 is but one of the summary trial procedures available under the Rules. It is a trial in the true sense of the word; evidence is received and there may in appropriate cases be cross-examination and legal argument. The procedure culminates in the court delivering a final judgment. There is always an onus on the party seeking judgment to prove all necessary elements of the cause of action before judgment can be obtained under that rule.

The position, at least in strict theory, is different where there is a summary judgment application under O.18 or 18A. There the important question is whether or not the court is satisfied that the defendant has a defence; because of the rather special procedure involved it could arguably be said that there was no "trial" for purposes of O.39. That may well be the explanation for the express rules in Orders 18 and 18A empowering the court to set aside a judgment given thereunder. (cf. Langdale v. Danby (1982) 1 WLR 1123).

If O.39r.33 did not extend to a judgment given pursuant to O.19r.4 then there would be a very strange gap in the rules. The court would have, pursuant to the rules, power to set aside all judgments given in default of appearance except those where the hearing was held pursuant to O.19r.4. However, there is no reason why the hearing pursuant to O.19r.4 should not rightly be regarded as a "trial" for purposes of O.39r.33.

It is sufficient for this court to say that the learned primary judge erred in holding that he did not have jurisdiction to entertain the application pursuant to O.39r.33. It will be necessary to make findings of fact, inter alia with respect to the appellant's conduct, before a decision could be made as to which way the discretion should be exercised. Again those findings must in the first instance be made by a chamber judge.

It follows that the appeal should be allowed, the orders appealed from made on the summons of 26 March 1996 should be set aside, and the summons of 26 March 1996 should be remitted to a chamber judge for further consideration. The respondent should pay the appellant's costs of the hearing before the primary judge and of this appeal. The appellant's notice of motion seeking leave to adduce further evidence should be dismissed without costs.

I agree with the orders proposed by Williams J and his reasons.

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