A Woodley Osteopathic Services Pty Ltd v Transport Accident Commission and Brendan Woodley , , Brendan Woodley and Transport Accident Commission and a Woodley Osteopathic Services Pty Ltd
[2014] VSCA 124
•20 June 2014
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2012 0037
| A WOODLEY OSTEOPATHIC SERVICES PTY LTD | Appellant |
| v | |
| TRANSPORT ACCIDENT COMMISSION and BRENDAN WOODLEY | First Respondent Second Respondent |
| S APCI 2012 0040 | |
| BRENDAN WOODLEY | Appellant |
| v | |
| TRANSPORT ACCIDENT COMMISSION and A WOODLEY OSTEOPATHIC SERVICES PTY LTD | First Respondent Second Respondent |
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| JUDGES: | MAXWELL ACJ, TATE and PRIEST JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | Decided on the papers |
| DATE OF JUDGMENT: | 20 June 2014 |
| MEDIUM NEUTRAL CITATION: | [2014] VSCA 124 |
| JUDGMENT APPEALED FROM: | [2012] VCC 188 (Judge Howie) |
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PRACTICE AND PROCEDURE – Costs – Appeals allowed – First respondent ordered to pay costs of trial and appeal – No application by appellants for special costs order – Orders authenticated – Subsequent application for orders that costs of trial and appeal be paid on indemnity basis – Calderbank offers rejected – Whether slip rule applicable – Inherent jurisdiction – Whether ‘supplemental order’ – Whether previous authorities in doubt after enactment of Civil Procedure Act2010 (Vic) – No power to vary orders once authenticated – Application refused – Gamboni v Bendigo and Adelaide Bank Ltd [2013] VSCA 282 followed – Supreme Court (General Civil Procedure) Rules2005 (Vic) r 36.07.
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| APPEARANCES: | Counsel | Solicitors |
| No appearances by leave of the Court | ||
MAXWELL ACJ
TATE JA
PRIEST JA:
Summary
On 6 December 2013, the Court delivered judgment in these appeals.[1] Both appeals were allowed. As is often done when judgment is delivered, the Court provided to the representatives of the parties a draft form of order intended to give effect to the judgment just published.
[1]Woodley v TAC [2013] VSCA 350.
On this occasion, the draft provided by the Court proposed an order in each appeal that the appeal be allowed and the respondent Commission pay the appellant’s costs of the appeal. In lieu of the orders made by the trial judge, the draft proposed an order in each case that the proceeding be dismissed and the plaintiff Commission pay the defendant’s costs of the proceeding. Counsel for all parties having indicated that there was no objection to the form of the draft, the Court made orders in those terms. The orders thus made were authenticated on 10 December 2013.
Subsequently, the appellant company, A Woodley Osteopathic Services Pty Ltd (the ‘Company’), applied in writing for an order that the Commission pay its costs of both trial and appeal on an indemnity basis. In a supporting written submission, the Company contended that such an order was justified because of what was said to be the Commission’s unreasonable rejection of successive Calderbank offers, the first made before the trial, the second before the appeal.
In a responding submission, the Commission contended that because the orders of 6 December 2013 had already been authenticated, the Court had no jurisdiction to make the special costs orders sought. In particular, it was submitted, the ‘slip rule’ in r 36.07 of the Supreme Court (General Civil Procedure) Rules2005 (Vic) had no application. It followed, so the Commission submitted, that the application for indemnity orders should be refused.
For reasons which follow, this submission should be upheld. The orders made on 6 December 2013 having passed into record, the Court has no power to alter them in the manner sought.
‘Slip rule’ not applicable
In a supplementary written submission, the Company accepted that the fact of authentication of the orders precluded recourse to the slip rule. The submission quoted the following passage from the judgment of Chernov JA (with whom Warren CJ and Dodds-Streeton AJA agreed) in Victoria Legal Aid v The County Court of Victoria:[2]
[O]nce a judgment is authenticated it becomes the record of the court, or, put another way, passes into the record of the court, and the judge in question has no jurisdiction to vary it, and thus becomes functus officio. The rule that a judgment once entered cannot be recalled is based on the principle that it is in the public interest that there be an end to litigation. But, ‘until a judgment or order has passed into record it remains under the control of the judge who may recall it or alter it, even if he seeks to do so merely because he has second thoughts about it; but once the judgment or order has passed into record the power to recall or alter it is of a very different kind … ’. In those circumstances, the power to recall the judgment is circumscribed by the slip rule, which operates to prevent a miscarriage of justice that might otherwise occur by reason of an accident or slip or omission by the court in perfecting its judgment.[3]
[2](2004) 9 VR 686, 693–4 [12].
[3]Emphasis added; citations omitted.
The submission also referred, quite properly, to the decisions of this Court in Sands & McDougall (Wholesale) Pty Ltd (in liq) v The Commissioner of Taxation[4] and in Gamboni v Bendigo and Adelaide Bank Limited.[5] As the submission acknowledged, in each of those cases the Court rejected an application by a successful party for a special costs order in circumstances where — because of an oversight on the part of counsel at the time the orders were made — no reference was made to offers of compromise having been made or to any reliance on the rejection of those offers as justification for such a special order.
[4][1999] 2 VR 114.
[5][2013] VSCA 282 (‘Gamboni’).
The Company’s submission continued:
17. Because issues concerning offers of compromise will necessarily involve an exercise of discretion by the Court, after receiving submissions by the parties, an omission or mistake will not be treated as accidental if the proposed amendment requires the exercise of an independent discretion or is a matter upon which a real difference of opinion might exist. ...
18.Accordingly, the authorities do not assist the company should its present application be confined to the slip rule; it accepts that those hurdles are insurmountable under the slip rule.[6]
[6]Citations omitted.
That concession was properly made, in our view.
The inherent jurisdiction of the Court
The Company’s supplementary submission accepts that the slip rule ‘reflects the inherent jurisdiction of a court “at any time to correct an error in a decree or order arising from a slip or accidental omission”’.[7] The Company contends, however, that the inherent jurisdiction extends beyond the correction of accidental omissions and permits the making of an order which can be characterised as ‘supplemental’ to orders made previously.
[7]L Shaddock & Associates Pty Ltd v Parramatta City Council [No 2] (1982) 151 CLR 590, 594 citing Milson v Carter [1893] AC 638, 640.
Recently, in Gamboni,[8] this Court was dealing with an application for an order for indemnity costs made in circumstances almost identical to those in the present case. The appellant having succeeded in his appeal, the Court ordered that the respondent pay his costs of the appeal and of the hearing at first instance. Counsel for the appellant inadvertently failed to inform the Court that his client had served an offer of compromise before trial, which the respondent had rejected. Application was subsequently made for an order that the appellant’s trial costs be paid on an indemnity basis.
[8][2013] VSCA 282.
The Court rejected the application, holding that what was sought was not in the nature of a supplemental order but was rather an order which would vary or alter the order initially made. The Court said:
[Rule] 63A.31 of the [County Court Civil Procedure Rules 2008 (Vic)] provided that, if the Court did not specify another basis of taxation, costs are to be taxed on a party and party basis. That is precisely the basis upon which we intended that costs be taxed pursuant to the Order, as no submissions were made to us that any other basis should apply. Accordingly, if this Court now made an order that some of the appellant’s costs be taxed on an indemnity basis, we would not be specifying a basis of taxation where none previously applied, but we would be substituting an order for taxation of some costs on an indemnity basis for an order that had the effect of requiring taxation of all costs on a party and party basis.
Although it is true, when we made the Order which had the effect of requiring that all of the appellant’s costs be taxed on a party and party basis, we were not aware of the offer of compromise, there was nothing unintended about the effect of the Order. On the basis of the information available to us on [the date the Order was made], we intended by the Order that all of the appellant’s costs be taxed on a party and party basis. Accordingly, the substitution of an order for taxation of some of the appellant’s costs on an indemnity basis, as sought by the appellant, would not be a supplemental order or an order to overcome unforeseen or unintended consequences of the Order or any ambiguities in its meaning. Rather, such an order would vary the legal consequences that we intended the Order to have at the time that we made it.[9]
[9]Ibid [73]–[74].
The Company’s submission also relied on the decision of the Full Court of the Federal Court in Caboolture Park Shopping Centre Pty Ltd (in liq) v White Industries (Qld) Pty Ltd.[10] In that case, White Industries had succeeded in the substantive proceeding and Caboolture Park had been ordered to pay its costs. Subsequent to the entry of judgment, White Industries obtained new information suggesting that the proceedings had been improperly conducted by the solicitors for Caboolture Park, and application was made for an order that the solicitors pay the costs on an indemnity basis. The solicitors argued that, as judgment had been entered, the Court had no jurisdiction to make the orders sought.
[10](1993) 45 FCR 224 (‘Caboolture’).
The Court ruled that it did have jurisdiction, saying:
Critical to the jurisdiction of the Court is first that the application not be one in any way to vary or alter the initial order. The present application does not seek to do this. It is, in the sense used in the cases, a supplemental order.
…
That the present case involves the making of a supplemental order is made more apparent when the form of the appropriate order is considered. In our view that order would be that the solicitors pay the costs of White Industries (Qld) Pty Ltd on an indemnity basis and that payment by the solicitors operate to discharge the liability of Caboolture. So framed it is clear that the Court has no need in any way to vary or alter any order previously made by it.
The principle behind denying the right of a court to vary or alter judgment regularly given and entered is the need for finality of litigation. … [T]he issues involved where a claim is made against a solicitor for costs by a party to the litigation have not been determined by the judgment which has been entered. They remain yet to be resolved.[11]
[11]Ibid 235–6.
Akedian Co Limited v Royal Insurance Australia Limited[12] was a similar case. The plaintiff having succeeded against its insurance broker, final orders were made which included an order that the broker pay the plaintiff’s costs of the proceeding. Two months later, the broker made application to the trial judge for an order that its professional indemnity insurers, which had conducted the broker’s defence on its behalf, should be jointly and severally liable with the broker for the plaintiff’s costs. Citing the decision in Caboolture,[13] Byrne J concluded that the orders sought against the non-party were ‘truly supplemental’ and did not affect the legal impact of the judgment originally pronounced.[14]
[12][1999] 1 VR 80 (‘Akedian’).
[13](1993) 45 FCR 224.
[14]Akedian [1999] 1 VR 80, 99–100 [56]–[58].
The Company’s submission in the present case is that the decision in Gamboni[15] should not be followed. According to the submission, to characterise indemnity costs as not being ‘supplemental’ to orders previously made is incorrect or, at least, is difficult to reconcile with the characterisation of non-party cost orders as supplemental. According to the submission:
25.In terms of substance over form, the substantive issues decided on the appeal are not in any shape being challenged, in the sense of altered or varied, by a consideration of indemnity costs. All that is sought is that the Court address an issue which is consequential to the initial decision and which would certainly have been addressed by the Court but for the omission of counsel.
[15][2013] VSCA 282.
In our view, this submission must be rejected. It is well-established that this Court will follow its previous decisions unless they are shown to be ‘plainly wrong’. There is no basis for any such contention here. On the contrary, we respectfully agree with the conclusion reached in Gamboni.[16] The decisions in Caboolture[17] and Akedian[18] draw a clear and cogent distinction between an application for an order against a non-party — that being a matter not previously the subject of decision by the Court — and an application to vary an order already made against a party. The present application is in the latter category, as was the application in Gamboni.[19]
Civil Procedure Act 2010 (Vic)
[16]Ibid.
[17](1993) 45 FCR 224.
[18][1999] 1 VR 80.
[19][2013] VSCA 282.
The alternative submission for the Company was that the scope of the inherent jurisdiction had been broadened by the Civil Procedure Act2010 (Vic) (the ‘CPA’), in a manner which warranted a reconsideration of earlier authority. The submission drew attention to s 8(1)(a) of the CPA, which requires the Court in the exercise of any of its powers — including powers exercised in the inherent jurisdiction — to give effect to the ‘overarching purpose’.
The overarching purpose is described in s 7 of the CPA in these terms:
(1) The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.
(2) Without limiting how the overarching purpose is achieved, it may be achieved by—
(a) the determination of the proceeding by the court;
(b) agreement between the parties;
(c) any appropriate dispute resolution process—
(i) agreed to by the parties; or
(ii) ordered by the court.
According to the written submission:
29.One of the purposes of [the CPA] is to reform and modernise the laws, practice, procedure and processes relating to the resolution of civil disputes which may lead to civil proceedings … in Victorian Courts. The Act facilitates that purpose in several ways. Section 9 of the Act provides that in make any order, a court shall further the overarching purpose of having regard to, inter alia, the object of the public interest in the early settlement of disputes by agreement between the parties. And for the purposes of s 9(1), the Court may have regard to matters including the extent to which the parties have used reasonable endeavours to resolve the dispute by agreement.
30.It is submitted that in exercising its inherent jurisdiction, informed by the modern approach embodied in the Act which serves to emphasise the public policy of early resolution of disputes by the parties, the Court should not apply the principles in Gamboni without qualification in the appropriate case. Applying Gamboni without qualification may, with respect, penalise a party that has sought to promote early resolution of disputes in giving effect to its obligations under the Act. And, conversely, to confer an unintended benefit on a respondent who must have anticipated the application for a special costs order being made against it and who was, at least, at risk of such an order being made.
31.The company served two Calderbank letters; one before the trial and the second prior to the appeal. Ultimately, it established it had not breached its (accepted) duty of care. It had nevertheless sought a reasonable compromise of the dispute. The compromise it offered was rejected by the Commission.
32.In the present case, the inquiry should be whether the circumstances are such that the public policy of finality is to be subsumed to the extent necessary to give effect to the overarching purpose of the Act. The mere fact of authentication of the Court’s orders ought not be a barrier to the ability of the Court to do justice between the parties, when no substantive injustice had been visited upon the first respondent. If there is a competition between the public policies of finality of disputes and promoting the purpose of the Act, the first policy is less compelling than the second where the result may effect an injustice on a party who has acted reasonably.
33.The accidental omission of its counsel has deprived the appellant of the opportunity of having the matter determined judicially, in circumstances where there is no sound policy reason to refuse the application, and where there are sound policy principles to allow it.[20]
[20]Citations omitted.
This was, with respect, a thoughtful submission, properly directing attention to the legislative policy underpinning the CPA. On analysis, however, there is nothing in the CPA which would justify, let alone require, a departure from established authority. On the contrary, the emphasis which the CPA places on the responsibility of legal representatives reinforces the principle of finality. If a party has a basis for seeking a special costs order at the conclusion of a proceeding (whether at trial or on appeal), the person representing that party at the delivery of judgment must be in a position to make — or at least foreshadow — that application at that time.
Moreover, a decision in this case not to disturb the cost orders already made is well justified in terms of the overarching purpose in the CPA. Simply put, agitating aspects of a dispute after they have been adjudicated is inimical to the objective of cost-effective and timely resolution of disputes.
As we have said, the CPA is clearly intended to encourage litigators to act diligently and responsibly in resolving disputes. No doubt the omission of counsel here was inadvertent, and unfortunate. Nonetheless, it is consistent with the thrust of the overarching obligations in ss 16–26 of the CPA to expect counsel to come properly briefed to a judgment hearing, to be in a position to assess draft orders and to raise any objections (even if only on a provisional basis) before the Court rises. As these circumstances illustrate, not doing so can lead to the protraction of a dispute (and further costs for both parties).
Nor does anything decided in Gamboni[21] (or in the authorities on which it is based) undermine the policy of encouraging parties to pursue opportunities for settlement. In the recent decision in Settlement Group Pty Ltd v Purcell Partners [No 2],[22] this Court upheld a well-founded application for indemnity costs — made in good time — based on the unreasonable rejection of a settlement offer.
[21][2013] VSCA 282.
[22][2014] VSCA 68.
Certificates in relation to trial
At the trial of the proceeding, all parties were represented by senior and junior counsel. In giving judgment for the Commission, the judge ordered that the defendants (now appellants) pay the Commission’s costs. His Honour certified the following items ‘in respect of the hearing prior to 31 August 2011’:
(a) the cost of transcript;
(b) two counsel;
(c) senior counsel fee on brief at $6600, three refreshers, one circuit fee of $266 and three circuit fee refreshers of $244;
(d) junior counsel fee on brief at $2054, three refreshers, one circuit fee of $266 and three circuit refreshers of $244;
(e) counsel’s attendance on 9 August 2011 fixed at $660;
(f) the cost of court books, the first copy on scale and any further reasonably necessary copies at a commercial rate to be determined by the Costs Court.
Both the Company and Mr Woodley submit that, following the reversal by this Court of the result of the trial, the like certificates should be granted to each of them. It is said that this is not precluded by the authentication of the order, as it does not in any way vary the order for costs made.
We accept that submission. These are purely supplemental orders. The necessary certificates will be granted. We will ask counsel to prepare appropriate minutes of orders.
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