Wentworth v Rogers

• 9 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

13492/01 - WENTWORTH v ROGERS & ANOR 13494/01 - WENTWORTH & ANOR v ROGERS JUDGMENT 1 In each of these proceedings, I heard on 1 August 2002 an application for leave to appeal under s.208M of the Legal Profession Act 1987 against determinations made by a costs assessor. On 15 August 2002, leave to appeal was, in each case, refused and I published my reasons: see Wentworth v Rogers [2002] NSWSC 709. No orders have yet been entered. Subsequently, a notice of motion was filed in each matter seeking orders that the hearing be re-opened. I heard those applications on 10 September 2002. 2 Re-opening is sought by the plaintiffs so that they may make submissions on certain matters referred to in my reasons for judgment - specifically, the application of quantum meruit principles in relation to lawyers' remuneration and the effect of the provision of the Act referring to a new hearing - and to adduce evidence and make submissions relevant to the meaning of the expression "pro bono". 3 In coming to my decision on the question whether leave to appeal should be granted (and in concluding that it should not), I was guided by principles applied and adopted in Reynolds v Whittens [2002] NSWSC 155 and Chapmans Ltd v Yandell [1999] NSWCA 361 discussed at paragraph [50] of my judgment. Those tests involve an inquiry whether there is an obvious error on the face of the record such that there will be substantial injustice to the party seeking leave if the challenged decision is allowed to stand, with the court acting as a filter to forestall unsuitable appellate proceedings with consequent demands on the resources of the court, burden upon the other party to the litigation and delays caused to other litigants. On the assessment I made, there was no obvious error giving rise to a need for the attention of the court to prevent injustice. 4 In coming to that conclusion, I canvassed a number of issues for the purpose of testing the soundness and cogency of the decisions reached by the costs assessor. Among these (although by no means the only and not necessarily the most central) were

(a) whether the absence of a written fee agreement between lawyer and client entailed the necessary consequence that the lawyer had no right to be paid - as to which I observed that recovery upon a quantum meruit should allow recovery of reasonable remuneration unless clearly excluded;

(b) the nature of a s.208M appeal - as to which I took the view that, because it is a "new hearing" (which is the plain English version of a hearing de novo), the court must determine the whole matter afresh and is not bound (although it might be entitled) to accept some narrowed approach based on mutual concessions; and

(c) what is conveyed by the expression "pro bono" in the context of legal fees - my general view being that it is a term of no fixed or accepted meaning but one which, in a context where costs might be awarded, could be understood as not precluding a payment obligation on the part of the client where that client was awarded costs against another party. 5 The plaintiffs say that they had no proper opportunity to make submissions on these matters and should be given such an opportunity upon re-opening, coupled with an opportunity to adduce evidence on understandings and practices relevant to the last matter. 6 There was, in fact, some exchange in the course of submissions on both the quantum meruit issue and the meaning of "new hearing". The first was dealt with briefly in an exchange between senior counsel for the second plaintiff and myself (transcript, page 17 line 46 to page 18 line 12), as well as being referred to by the solicitor for the defendant (page 30 line 21 to page 31 line 12). The second matter was also the subject of comment by the first plaintiff (page 11 line 48 to page 12 line 5 and page 43 lines 11 to 36) and an exchange between senior counsel for the second plaintiff and me (page 41 line 9 to page 42 line 41). I should add, by way of explanation, that the second plaintiff was represented by counsel at the hearing before me on 1 August 2002 and that the first plaintiff, who was unrepresented, both adopted the submissions made by counsel for the second plaintiff and added submissions of her own. 7 On the application for re-opening of the hearing, senior counsel for the second plaintiff referred to a number of the High Court decisions on re-opening after judgment but before entry of orders. The first plaintiff, who again appeared in person, made reference to a great number of authorities. While cases on this subject as it affects appellate courts are no doubt instructive, the fact remains that treatment of the issue at that level is affected by considerations which do not apply when it is sought to have proceedings determined by a single judge at first instance re-opened after judgment. In R v Nitin Giri (No 2) [2001] NSWCCA 234, Heydon JA distilled from High Court authority (Wentworth v Woollahra Municipal Council (No 2) (1982) 149 CLR 672, State Rail Authority (NSW) v Codelfa Construction Pty Ltd (No 2) (1982) 150 CLR 29, Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300) the three issues central to the re-opening jurisdiction which the High Court regarded as exercisable by appellate courts in only "extremely rare" or "quite exceptional" circumstances and then only with "great caution": · first, whether the appellant has shown that, without accident or fault on the appellant's part, he or she has not been heard on a relevant matter; · second, whether the appellant has shown an error in the court's reasoning because of a misapprehension of the facts; and · third, whether the appellant has shown an error in the court's reasoning because of some misapprehension of the relevant law.

(See also, in particular, Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256 and De L v Director General, New South Wales Department of Community Services (No 2) (1997) 190 CLR 207.) 8 Principles of general application which are relevant to the question of re-opening by first instance judges where avenues of appeal are readily available were discussed by Santow J in Wentworth v Wentworth [1999] NSWSC 638: "While appellate courts must have regard to whether and to what extent there is any prospect of any final appellate review and which in the case of the Australian courts of appeal depends upon special High Court leave, the principles for exercise of the discretion as laid down in Smith v NSW Bar Association (No. 2) (supra) at 265 embrace all courts: 'The power is discretionary and, although it exists up until the entry of judgment, it is one that is exercised having regard to the public interest in maintaining the finality of litigation ( Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684)). Thus, if reasons for judgment have been given, the power is only exercised if there is some matter calling for review ( Marinoff v Bailey (1970) 92 WN(NSW) 280 at 284; National Benzole Co Ltd v Gooch [1961] 1 WLR 1489 at 1492-1494). And there may be more or less reluctance to exercise the power depending on whether there is an avenue of appeal ( State Rail Authority of NSW v Codelfa Constructions Pty Ltd (1982) 150 CLR 29 at 38-39, 45-46; Wentworth v Rogers [No 9] (1987) 8 NSWLR 388 at 394-395).'

Per Brennan, Dawson, Toohey and Gaudron JJ in Smith v NSW Bar Association (No 2) at 265. Their Honours went on to say (at 265) 'the power to review a judgment in a case where the order has not been entered will not ordinarily be exercised to permit a general re-opening'.

Speaking in broad terms, the basis for review has been expressed thus (in Yenald (supra) at 42,362): 'An order varying the terms of a judgment that has not been entered will be made to correct error or oversight or to give effect to a review of the contemplated order so that the orders made deal more adequately with the matter as litigated by the parties before the Court. (See: The Texas Company (Australasia) Ltd v FCT (1940) 63 CLR 382 per Starke J at 457).'

In appellate courts particularly, there is to be weighed the public interest in the finality of litigation against what would otherwise be irremediable injustice; State Rail Authority of New South Wales v Codelfa Construction Pty Limited at 38 per Mason and Wilson JJ. But that latter factor does not have the same weight where, as here, appeal is allowed as of right or as a matter of usual course.

The discretion to re-open or vary a judgment is thus significantly qualified. As is so often said, the power should 'be exercised with great caution'; Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684. Examples where re-opening was denied serve to illustrate the constraint observed by the courts in exercise of the discretion:

(i) Where the ground was that the Court misconstrued a section of legislation this was said to be 'an attempt to re-argue the substantial question decided in the appeal after hearing full argument from counsel for the parties'; Wentworth v Woollahra Municipal Council (supra) at 685.

(ii) Where the grounds are an allegation of bias against the Court or allegations of mistaken findings of fact, the proper procedure is to seek special leave to appeal from the High Court. Wentworth v Rogers (No 9) (1987) 8 NSWLR 388 at 395.

(iii) Where what is occurring is in truth the re-agitation of arguments already considered by the Court; as was said by Mason CJ in Autodesk (at 302): 'It must be emphasised that the jurisdiction [to review or re-hear an issue] is not to be exercised for the purposes of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a re-hearing has failed to present the argument in all its aspects or as well as it might have been put'.

(iv) Where the parties have been sufficiently heard on the impugned issue; Autodesk Inc v Dyason (No 2) .

(v) Where even if there be the possibility of some misapprehension on the Court's part as to the facts or relevant law, this misapprehension can be attributed solely to the neglect or default of the party seeking the re-hearing; for 'the purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to re-argue their cases'; per Mason CJ in Autodesk at 303.

Examples on the other hand where review has been allowed in the case of a judgment or order of a court of first instance include the following:

(i) Where the court's reasons for judgment inadvertently did not deal with important matters argued by counsel at the hearing where an appeal to correct this would involve inevitable delay; Twenty-First Australia Inc v Shade (NSWSC, Young J, 31 July 1998, unreported) in Butterworths Unreported Judgments at 18.

(ii) Where the court's reasons involve 'infelicity of expression and ambiguous statements' which may be corrected by the trial judge upon the bringing in of short minutes; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 2) (1998) 29 ACSR 290.

(iii) Where re-opening in respect of an order which was consequential upon a finding of error of law and the trial judge had no intention that the order have the effect that further evidence could be called on in the remittal to the tribunal below, and where the possible effect of the order had not been the subject of argument at hearing; AB v Federal Commissioner of Taxation (1998) 157 ALR 510. (While the order arising out of this decision to re-open the matter and the previous decision which found an error of law were overturned on appeal in Glennan v Commissioner of Taxation [1999] FCA 297, the decision to re-open was not itself canvassed in the appeal.)

(iv) Where what was sought was further consideration of orders in respect of the nature and extent of equitable relief which had been earlier sought at trial (in the context of a complex litigation); Farrow Finance Company Ltd (in liquidation) v Farrow Properties Pty Ltd (in liquidation) and Ors (SC(Vic), Hansen J, 16 April 1998, unreported).

(v) Where a party had misunderstood the basis of a pleading and failed to address the issue in its strike-out application; Hoad v Nationwide News (1996-1997) 37 IPR 407 [Anderson J SC(WA)]

(vi) Where excision of a paragraph from a judgment was sought where the trial judge had mistakenly referred in his reasons to a situation which did not exist; Smits v Buckworth (No 2) (NSWSC, Young J, 14 November 1997, unreported).

(vii) Where the trial judge recalled his order after deciding it was wrong immediately after making it; Pittalis v Sherefettin [1986] 1 QB 868.

In the Court of Appeal, where further appeal would have depended on discretionary special leave from the High Court, the Court agreed to re-open its decision in order to permit a reconsideration of a particular issue, because the court had not originally been made aware of authority directly in point and which was to the contrary to that earlier decision; Wentworth v Wentworth (NSWCA, 30 November 1998, unreported).

While illustrations of where the courts have or have not re-opened a judgment not yet entered are of value, they can be subsumed more generally in what Mason CJ said in Autodesk (at 301-2). He delimited the scope of the discretion by explaining that "the exceptional step" of reviewing an issue might occur where a court has good reason to consider that it had proceeded on a misapprehension as to the facts or the law and where the misapprehension cannot be attributed solely to the applicant's neglect or default". 9 It seems to me that the relevant principles, as they apply in a case such as the present, can be summarised in one basic proposition, namely, that a single judge whose decision is susceptible to appeal through readily available channels (with or without any preliminary need for leave to appeal) should allow re-opening after judgment where it is obvious to that judge that the decision has miscarried and that the miscarriage may be rectified and the situation retrieved by attention to the matter by that judge rather than by an appeal court. What is highly undesirable is that the first instance judge should be cast in the role of hearing what amounts to an appeal against his or her own decision. I adopt, in that connection, the following observation of Rix LJ in Compagnie Noga D'Importation et D'Exportation SA v Abacha [2001] 3 All ER 513: "I do not wish to say anything against the usefulness of the reconsideration jurisdiction, within its proper limits. I have made use of it myself. However, it is in the nature of the legal process that, once judgment has been rendered, analysis thereafter becomes clarified and refined, and citation of authority is applied to the findings made at first instance so as to illuminate that clarification and refinement of analysis of which I speak. But that is the function of the appeal process. In my judgment, to grant this application that I reconsider my judgment would subvert the appeal process itself. In doing so, it would not answer the interests of justice, but would be the antithesis of justice according to law. There are of course cases where an error of fact or law may be too clear for argument. The best test of that is perhaps - but not necessarily - where the judge himself identifies the error which concerns him. In such a case, it is better that the error is corrected without imposing on the parties the need for an appeal. But no parallel to Noga's application has been cited to me. It is in my judgment wrong for a judge to be treated to an exposition such as would be presented to a court of appeal. If in such circumstances a judge should be tempted to open up reconsideration of his judgment, an appeal would not be avoided, it would be made inevitable. Every case would become subject to an unending process of reconsideration, followed by appeal, both on the issue of reconsideration and on the merits." 10 In the present case, the plaintiffs say that they had inadequate opportunity to address the issues of quantum meruit and the nature of the s.208M appeal and also that they wish to adduce evidence relevant to views I expressed as to what would be appreciated by the expression "pro bono" in the particular context. I say four things about that. First and as I have already noted, the first two matters were the subject of exchanges in the course of the hearing. Second, the ways in which a particular expression in common usage in legal circles would be employed in a particular context is something on which evidence would not normally be useful. Third, this cannot, as I see it, be said to be a case in which the court is asked simply "to repair errors clearly demonstrated and readily corrected" (Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (unreported, NSWCA, 8 July 1993, per Kirby P). Third and as Lord Wilberforce observed in Saif Ali v Sydney Mitchell & Co [1980] AC 198, "Judges are more than mere selectors between rival views - they are entitled to and do think for themselves." Fourth, if re-opening were permitted and further submissions were made, the fact that I had already expressed myself as I did in the original judgment would inevitably have the effect of casting me in a role somewhat akin to that occupied by a respondent upon appeal; and that is not, from anyone's perspective, a satisfactory base from which to seek to progress (or, if rectification is needed, to seek to rectify) the matters which are of concern to the plaintiffs. 11 The jurisdiction to re-open after judgment is discretionary and is to be exercised having regard to the public interest in maintaining the finality of litigation. An appeal against my original decision is available upon leave granted by the Court of Appeal: Supreme Court Act, s.101(2)(q). If that decision is affected by any error of the kind to which the plaintiffs have referred in seeking to have the matter re-opened - or, for that matter, any other error - such that the requirements of justice demand that the decision be reviewed, leave will be readily granted so that the question of error can be fully explored on appeal and the error set right. The leave to appeal needed in this case is quite different from the kind of leave that influenced thinking in Wentworth v Wentworth (unreported, NSWCA, 30 November 1998), Taylor v Lawrence [2002] 2 All ER 353 and Stambulich v Ekamper [2002] WASCA 212 (ie, the form of leave which seeks to ensure that only cases of particular importance are appealed from an intermediate court of appeal to a final court of appeal). If the matters the plaintiffs seek to agitate further are to be pursued, they should be pursued in the Court of Appeal. 12 In 13492 of 2001, the plaintiff's notice of motion filed on 5 September 2002 is dismissed. In 13494 of 2001, the plaintiffs' notice of motion filed on 5 September 2002 is dismissed. **********

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