Westpac Banking Corporation v Wittenberg

1. The interlocutory application filed 15 March 2016 be dismissed with costs (if any), as taxed if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT: 1 Judgment in this appeal (and some others) was delivered on 14 March 2016 (Westpac Banking Corporation v Wittenberg [2016] FCAFC 33). A correction was made on 30 March 2016 to rectify a failure to preserve an order made in Mr Wittenberg's favour by consent on 27 March 2015 (Westpac Banking Corporation v Wittenberg (No 2) [2016] FCAFC 49). 2 The correction made on 30 March 2016 requires no further attention. However, the appellant ("Westpac") has raised issues about the orders made on 14 March 2016. 3 On 15 March 2016, Westpac filed an interlocutory application which sought, in lieu of an order that Westpac pay 25% of Mr Wittenberg's costs at first instance, an order in the following terms: 2. That order 2(b) in the orders made on 14 March 2016 in proceedings NSD 405 of 2015 be varied so as to provide that: (a) the appellant pay the respondent's costs of the proceedings in NSD 90 of 2010 on a party and party basis for the period up to and including 11 am on 6 December 2011; and (b) the respondent pay the appellant's costs of the proceedings in NSD 90 of 2010 on an indemnity basis for the period after 11 am on 6 December 2011. 4 This proposed order is based upon an offer of compromise made to Mr Wittenberg on 2 December 2011 to settle the proceedings at first instance. The offer was annexed to an affidavit sworn in support of the interlocutory application. No reference was made to it in the appeal. 5 Westpac's notice of appeal, which was dealt with in the judgment delivered on 14 March 2016, sought the following orders: Orders sought 1. The orders made in the proceedings on 27 March 2015 be set aside and, in lieu thereof, judgment for the Respondent be ordered in the sum of $60,000, plus interest on that amount from 27 February 2009 to 27 March 2015, at the rates prescribed by section 51A of the Federal Court of Australia Act 1976. 2. Costs of the proceedings. 3. Costs of the appeal. 6 Those orders, proposed by Westpac, failed to refer to the order in Mr Wittenberg's favour, made by consent on 27 March 2015, which it was necessary to later address in the supplementary orders made on 30 March 2016. However, the orders proposed by Westpac on appeal did reflect a finding made in Mr Wittenberg's favour by the primary judge and, correctly (as that finding was not challenged on appeal), proposed that if Westpac's appeal succeeded the finding be given effect to, as in due course it was. In that context, Westpac had an ample opportunity to seek to reserve its position on costs, if it was necessary to do so, but it did not. 7 The orders made initially on 14 March 2016 addressed the claimed relief directly, based on the matters argued, and referred to, on the appeal. One consequence was that the consent order made on 27 March 2015, referred to earlier, was overlooked. That has since been rectified, although not at Westpac's initiative. Another consequence was that Westpac was ordered to pay 25% of Mr Wittenberg's costs at first instance (rather than 75% as the primary judge ordered), rather than receive costs. Notwithstanding the amendments made on appeal, the result was that Mr Wittenberg still achieved orders in his favour in the proceedings which he commenced, including as to costs. 8 No order for indemnity costs was sought by Westpac on the appeal. No reference was made in the notice of appeal to the possibility that such an order might be sought if Westpac's appeal succeeded, or that any other special costs order might be sought. 9 Normally it is to be expected that a party will deal with costs during the course of the proceedings or at least indicate clearly that it desires an opportunity to make further, and later, submissions on costs (see ACCC v Daniels Corporation Pty Ltd [2001] FCA 936; Hewlett Packard Pty Ltd v GE Capital Finance Pty Ltd [2003] FCAFC 278 at [13]; Grygiel v Baine [No. 2] [2005] NSWCA 434; Tristar Steering and Suspension Australia Ltd v Industrial Relations Commission of New South Wales (No 2) (2007) 159 FCR 274 at [26]; Shahid v Australasian College of Dermatologists (No 2) [2008] FCAFC 98 at [11]; Siminton v Australian Prudential Regulation Authority (No 2) [2008] FCAFC 113 at [4]; Harding v Deputy Commissioner of Taxation (2008) 172 FCR 469 at [13]). 10 At no point in the hearing of or at the completion of the hearing of the appeal was the Court requested by Westpac to refrain from making any or any specific orders pending further submissions. No reference at all was made even to the possibility that an order might later be sought in terms different to the relief sought by the notice of appeal. 11 When the interlocutory application was filed, directions were made for written submissions which included a requirement that Westpac identify how its application for indemnity costs arose within the scope of the appeal. Westpac's submissions accepted: 10. The existence of the Offer of Compromise made to Mr Wittenberg was not drawn to the attention of the Full Court at the hearing on 2-5 November 2015. … 15. … a. It is acknowledged that no written or oral submission was made to the Full Court in relation to the possible consequences for the costs of the proceedings below of success by Westpac on the other issues in its appeal and the rejection by the Court of Mr Wittenberg's cross-appeal. … 12 Now, Westpac has submitted that the costs order made in favour of Mr Wittenberg should be vacated on two bases, neither of which is correct. First, Westpac assumes that the orders made on appeal have not been entered; they have been under the electronic court file arrangements adopted by the Court and in accordance with rr 39.32 and 39.35 of the Federal Court Rules 2011 (Cth). The orders were authenticated on 16 March 2016 and thereby entered. Secondly, Westpac submitted that the Full Court had proceeded "in ignorance of a critical matter of fact or law" and referred to r 25.06: 25.06 No communication to Court of offer … (2) No communication about the existence or terms of an offer is to be made to the Court until: (a) the offer is accepted; or (b) judgment is given; … … 13 In our view, r 25.06 has no application. It would only apply to an offer of compromise made in relation to the appeal. At first instance, judgment had been given. 14 Based upon its desire to pursue Mr Wittenberg for indemnity costs, Westpac then raised a further issue in its written submissions, and sought leave to amend the interlocutory application accordingly. Westpac now sought a stay of the judgment in favour of Mr Wittenberg for $60,000 (which order Westpac had conceded by its notice of appeal) and any order for costs in his favour, because Westpac anticipated that the indemnity costs which it sought would considerably exceed any amount it was required to pay to Mr Wittenberg and it wished to have the benefit of an immediate set off. 15 We will not now entertain an application for any order for indemnity costs based on the 2011 offer of compromise because it falls outside the scope of the appeal. No application for leave to amend the notice of appeal has been made. Final orders have been entered in circumstances where Westpac failed to draw any attention to the matter in its notice of appeal or otherwise. 16 As we reject the application for indemnity costs, no issue arises concerning a possible stay of any order made on appeal. We do not grant Westpac leave to amend its interlocutory application. 17 To avoid any further unnecessary costs to Mr Wittenberg, he was relieved from the requirement (by direction made on 17 March 2016) to respond to Westpac's submissions, shortly after those submissions were received. 18 We dismiss the interlocutory application filed on 15 March 2016 with costs (if any) in favour of Mr Wittenberg. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Buchanan, McKerracher and White.