Woodhouse v Fitzgerald

Judgment

1. THE COURT: The respondents (and cross-appellants) in an appeal which was determined by the Court on 9 April 2021 have filed a post-judgment motion seeking to vary the order made by this Court as to the costs of the trial.
2. In August 2012 sparks from a controlled burn which had been undertaken on land owned by the respondents (Barry Thomas Fitzgerald and Virginia Eileen McCoy) escaped driven by strong winds and reignited on the property of the appellant (Brian Herbert Woodhouse) causing a fire which destroyed his house. The trial judge held that the respondents were liable to the appellant and awarded damages in favour of the appellant. Despite an assessment that the appellant's loss was $1.3m, the trial judge reduced that sum by 10% on account of contributory negligence and apportioned the balance, leaving Mr Woodhouse with a judgment against the respondents in the amount of some $410,000.
3. Mr Woodhouse appealed from reductions in the calculation of his damages. The respondents cross-appealed against the finding that they were liable in damages. Although Mr Woodhouse was partly successful on his appeal, as a result of which the reduction in damages by way of apportionment was found to be erroneous, that success was to no avail because the respondents succeeded in their challenge to the finding that they were liable. Accordingly, the judgment in favour of the appellant was set aside on the cross-appeal.
4. The orders made by the Court were those sought by the respondents in their notice of cross-appeal, namely the setting aside of orders 1, 2, 3 and 4 made by the trial judge on 1 May 2020. An order for the costs of the trial was also made in accordance with the orders sought in the notice of cross-appeal, namely that the plaintiff (Mr Woodhouse) pay the defendants' costs of the trial.
5. Shortly after judgment was delivered, the respondents realised that order 4 made by the trial judge had been in their favour. Thus, although by order 3 they were ordered to pay the plaintiff's (appellant's) costs of the trial prior to 21 November 2019, order 4 read as follows: "4. The plaintiff to pay the defendants' costs incurred from and after 21 November 2019 as agreed or assessed on the indemnity basis."
6. The basis for order 4 was an offer of compromise by which the respondents would pay the appellant the sum of $600,000, together with costs to the date of the offer. The appellant did not accept the offer and the judgment he obtained was less favourable than the offer. In accordance with the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), r 42.15, the defendants were entitled to an order for their costs to be paid by the plaintiff from the date of the offer and assessed on an indemnity basis.
7. The respondents' motion, filed on 23 April 2021, that is on the fourteenth day after the orders were entered, sought to have the indemnity costs order made at the trial reinstated. The written submissions in support of the order relied upon two provisions in the UCPR, namely r 36.16(3A) which empowers the court to set aside or vary a judgment or order where a notice of motion seeking such setting aside or variation has been filed within 14 days after the judgment or order was entered. Further, the respondents relied upon r 36.17, commonly known as the "slip rule" which reads as follows: 36.17 Correction of judgment or order ("slip rule") If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error.
8. There was in fact no clerical mistake; nor was there any "omission". If r 36.17 was to be invoked, the respondents had to establish "an error arising from an accidental slip" in the orders made by the Court. However, there was no "slip" on the part of the Court: having reached the conclusion sought by the respondents, it made the orders sought by the respondents in the terms they proposed. The "slip" was on the part of the respondents' legal representatives in failing to appreciate that they were entitled to retain order 4 in the event that they were successful on the cross-appeal. Accordingly, the slip rule is only available if it can be engaged where the error is that of the legal representatives of a party. The respondents acknowledged that the error was that of their legal representatives, but submitted that the rule was, nevertheless, engaged.
9. In Newmont Yandal Operations Pty Ltd v J Aron Corporation, [1] Spigelman CJ stated (with the agreement of Santow JA and Handley AJA) that whilst the operation of the slip rule was to be addressed by reference to the specific provision in r 36.17, rather than by applying terminology found in earlier cases, [2] it was also necessary that words used in the rule, including "error", "accidental slip or omission" and "correct" should be construed in such a manner as to give effect to the overriding purpose provided by the Civil Procedure Act 2005 (NSW), s 56, namely "to facilitate the just, quick and cheap resolution of the real issues in the proceedings." [3]
10. The Chief Justice also considered whether the Court had inherent jurisdiction to vary its orders once entered. The answer to that question must be that it did not. As Barwick CJ stated in Bailey v Marinoff: [4] "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 a power to reinstate a proceeding of which it has finally disposed."
11. However, as noted in DJL v Central Authority: [5] "[34] The common law courts, as superior courts of record, had 'full power to rehear or review a case until judgment [was] drawn up, passed, and entered'. … Even after entry of judgment, an error arising from an accidental slip or omission might be corrected at any time by further order in the action and even without an enabling rule of court. An order also might be made in the action for the correction of the records of the court to make certain that they truly represented what the court had pronounced or had intended to pronounce."
12. In Newmont Yandal, Spigelman CJ quoted the last sentence from [34] in DJL, emphasising the words "or had intended to pronounce." Spigelman CJ continued: "[84] With respect to both the inherent jurisdiction, and the element in the slip rule which empowers a court to 'correct' an order, Newmont submits that the terms of any order made must accord with the intention of the judge who made the original order. … … [89] I have no doubt, indeed there was no submission to the contrary, that the orders made by Austin J had consequences which Austin J had not intended. This engages the inherent jurisdiction to correct an order, in accordance with authoritative restatement of the relevant jurisdiction in DJL . [90] I will indicate below why it is also an 'error' within the slip rule. The only question then is what form should the order take."
13. In applying those principles to the case before him, after referring to the analysis of the primary judge, Spigelman CJ continued: "[153] … I would add that the issue is whether the Court's order can be characterised as arising from an accidental slip or omission. Inadvertence or inefficiency on the part of legal representatives may explain why the Court's order can be so characterised. However, the conclusion can be drawn even if the legal representatives 'adverted' to all relevant matters. White J was correct to focus on the intention of Austin J. Indeed, there is no challenge on this basis to the critical proposition in White J's reasons, that is, that Austin J's order was an 'error' based on an 'accidental slip or omission' by Austin J."
14. The difficult issue in Newmont Yandal, which does not arise in the present case, was that the primary judge had made the order he intended to make, but did not intend certain consequences. Whether the order had those consequences was disputed, but the "error" was held to lie in the ambiguity of the order.
15. There can be no doubt that, in accordance with the principles in Bailey v Marinoff, this Court has no power under the slip rule to reopen a case where orders have been entered so that one party can raise an issue which, through inadvertence or otherwise, was not raised at the hearing. That is this case. The court intended to set aside order 4 made by the primary judge because neither party (nor the Court) adverted to the question as to whether it should be set aside. This was not an occasion for the invocation of the slip rule.
16. In his written submissions on the motion, the appellant stated that the "only power" relied upon by the respondents was the slip rule. [6] Although the respondents filed a reply on 3 June 2021, they did not take issue with that proposition. Nevertheless, it was plainly erroneous. The respondents' original written submissions had expressly invoked UCPR r 36.16(3A) [7] and complied with the 14-day time limit for such an application.
17. There have been occasions on which the Court has refused to set aside or vary an order under r 36.16 in circumstances where the variation could and should have been sought in the relevant pleading (usually a notice of appeal), or at least agitated in the course of the hearing of the appeal, and where the issue raised may be contentious. Some appeals raise issues which are complex and, depending upon the findings of the court, fresh orders may need to be formulated after the court has determined the disputed issues. Furthermore, offers of compromise are, quite properly, not raised prior to the determination of an appeal, where their effect will turn on the outcome. This case did not fall into either of those categories.
18. However, although the appellant resisted the variation of the Court's order with respect to the costs of the trial, the underlying issue was not contentious. The making and non-acceptance of the offer, and the consequence given the judgment at trial, led to the indemnity costs order being made by consent. Following the appeal, the appellant's position is worse, not better, than it was at trial. There is no question of indemnity costs in relation to the appeal; there is, however, no reason why, as a matter of justice, the respondents should not be entitled to retain their indemnity costs order from the trial. Their error in failing to seek that outcome in the cross-appeal can be remedied pursuant to r 36.16, as the filing of a timely notice of motion allows the Court to proceed as if the orders had not been entered. Order 4 was unfavourable to the appellant, but, understandably, was not challenged by his appeal. There was no submission that the correctness of the order would have been challenged had it been raised in the hearing of the cross-appeal. Accordingly, the appropriate course is to vary the orders of this Court as sought by the respondents.