AON Risk Services Australia Limited v Australian National University
[2009] HCATrans 74
[2009] HCATrans 074
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
No C1 of 2009
B e t w e e n -
AON RISK SERVICES AUSTRALIA LIMITED
Appellant
and
AUSTRALIAN NATIONAL UNIVERSITY
Respondent
FRENCH CJ
GUMMOW J
HAYNE J
HEYDON J
CRENNAN J
KIEFEL J
BELL J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON WEDNESDAY, 29 APRIL 2009, AT 10.19 AM
(Continued from 28/4/09)
Copyright in the High Court of Australia
FRENCH CJ: Yes, Mr Walker.
MR WALKER: Your Honours, overnight our friends have notified us of a decision of the Full Court of the Supreme Court of Victoria - Dwyer v O’Mullen 8 VLR 933. I hope your Honours have copies of that before you. It raises matters which require me to go back and seek again to answer some of the matters which were particularly the focus of some questions addressed to me by Justice Kiefel at the beginning of my address yesterday.
Now, the rule in question in this case was in the familiar older form. You will find it quoted at page 939 in the Chief Justice’s reasons, in the middle of that page, and as observed several times yesterday in that older familiar form the general provision providing for a power or discretion, rule 502’s equivalent, was immediately followed by what might be called a special case, the rule 501 equivalent. Using a slightly different expression, I do not think I am in a position to say there is much material difference, if any, namely, “for the purpose of determining the real questions in controversy between the parties”. That was the phrase which was the subject of the expressions of opinion by their Honours in the Full Court in Dwyer v O’Mullen.
Now, the facts in Dwyer v O’Mullen are easily appreciated, not only from the headnote but from the way in which the Chief Justice explains the matter at page 937. Whether or not the land had been conveyed by deed by the defendant depended, so far as what I will call the controversy that brought the parties to trial, simply and solely on whether she, an illiterate, had fixed her mark in the appropriate way to that deed.
At the trial, apparently, it emerged that the defendant probably did affix her mark, so far as formalities are concerned, in the appropriate way and on the pleadings that disposed of the case and that was the outcome of the case, but that evidence emerged that she thought that she had never affixed her mark to a deed conveying land and that she thought it had something to do with potatoes or flour.
Certainly there were problems of consideration and understanding and one sees the way in which the Chief Justice described how that came out at trial at the top of page 938:
yet she did so in ignorance of the purport of the instrument . . . or that she was parting with her interest in the land. And he was further of opinion that, if that question had been properly raised on the pleadings, he would have found a verdict for the defendant. But he was of opinion it was not raised by the pleadings; and we think he was correct in so holding.
Having then dealt with the matter of the pleadings and the way in which the issues needed to be raised at page 939 his Honour then turns to the question of an amendment and in familiar terms said that they would not interfere with the discretion of the first instance judge in refusing it. But after quoting the rule the Chief Justice pointed out that the last clause, our rule 501 equivalent, makes an amendment mandatory and then Chief Justice Higinbotham explains what that means in this context of a decision which is described as a discretion as follows:
The judge is under the obligation of making an amendment, but only for a certain purpose and in certain cases – for the purpose of determining the real question in controversy between the parties – that being expressed in many cases to be the question which the parties had agitated between themselves, and had come to trial upon.
I need to interpolate there. That requires me to revisit the answers I gave Justice Kiefel yesterday. I do not wish to modify that part of our argument where we said the rule obviously does not require that the issue already be raised on the pleadings because, if so, it could not be a necessary amendment. But this is an explanation from an early Australian reception of these rules in the familiar form which is plainly a precursor of the Australian Capital Territory Rules in this case. This is an explanation that one looked to what I will call the pre-litigation state of affairs between the parties, the controversy or dispute.
Now, that will raise questions of level of generality which will be necessary in order to understand whether something has been an issue between the parties. But alas rule 501 in its wording does make that a bit difficult simply to apply because it talks about issues in the proceedings, and so here there is a difference that has been introduced because the controversy between the parties which, on the wording of the older rule, was held by the Full Court in Victoria to mean that which was the subject matter of their dispute, perhaps the lineaments of their dispute, before there was any litigation, is very difficult, as a reading of rule 501(a) – namely, the real issues in the proceeding. It complicates rather than simplifies the position that I tried to supply in answer to Justice Kiefel, but in our submission it is a reason to resist straightforward application, as it were, of Dwyer v O’Mullen to this case with this rule.
HAYNE J: The application of the necessary amendment passed of the common form Order 28 rule 1 is exemplified perhaps best by Nottage v Jackson (1883) 11 QBD, a case about copyright of photographs of the Australian cricket team, where it emerges at page 638 that, as fought at trial, the issue was one about authorship. Counsel for one party in discussing costs at page 638 said:
that no costs of the appeal should be given. The point on which the case had been decided was not raise on the pleadings, but had been added by amendment by the judge in the Court below in order to raise the real point at issue.
That is the Court of its own motion made the amendment to identify what the parties were debating.
MR WALKER: Yes.
HAYNE J: Does that not suggest that we are not at rule 501 territory? Rule 501 territory is limited in that we are in truth in rule 502(1), which is the equivalent of the first part of Order 28, rule 1.
MR WALKER: Yes, I accept that it is the equivalent. No, we do not abandon the position of reliance on rule 501. Your Honours will recall it is not only (a) but also importantly (c) to which we plead. I will come back to that in a moment. Certainly a direction for pleadings to be amended by the court in order, for example, that the pleadings conform with the evidence and argument and, indeed, at a late stage, perhaps just before the entry of judgment is, in our submission, appropriate where the case could as well be covered by 501 as by 502. So if there had been no application to amend but to the court it appeared clear that the pleadings were inadequate to convey the real issue, which was in the course of being tried or perhaps had been all but tried, then that would be an occasion for the direction for amendment to be made under rule 502 because there were real issues to be determined and because, in terms of rule 21, that would facilitate the just resolution of those issues.
HAYNE J: I should perhaps add, Mr Walker, that if you go back into the annual practice – the earliest edition I could conveniently find was, I think, the 1922 annual practice – amendments which parties desire to make to their own pleadings were treated as a separate subject governed by the first part of Order 28, rule 1 from that class of amendment, the necessary amendment which was exemplified by Nottage v Jackson.
MR WALKER: Yes. That pattern of behaviour, as it were, does not mean that the second part, our rule 501 equivalent, is one that cannot be evoked by an application by a party. I do not think that anyone has suggested that, at least in modern practice.
GUMMOW J: It is unusual, but I suppose a party might seek to amend another party’s pleading. How does that fit in?
MR WALKER: I confess I have never heard of that but I accept that the wording covers it. It would be, as it were, a hygienic approach to surplusage in one’s opponent’s pleading, but what you may see as surplusage he or she may see as an appropriate point. It would appear to be a not particularly useful use of court time to argue about those characterisations.
HAYNE J: It would pick up the slip‑rule case, would it not, in another party’s pleading?
MR WALKER: It would certainly cover matters of slip in an advertence, yes.
HEYDON J: But it is just a sort of strike out, is it not?
MR WALKER: I was about to say, if you have an objection that there is something in the nature of excrescence or inappropriateness or error in your opponent’s pleading, I think, from my experience, the universal practice without exception is to request your opponent to do something about it and if there is what you regard as unreasonable or incorrect refusal, then to burden the court with a motion to strike out. However, that motion to strike out ‑ ‑ ‑
FRENCH CJ: Maybe there is an overlap. I mean, in the case of a false issue raised which is ‑ ‑ ‑
MR WALKER: The motion to strike out is very often of course – the real issue is whether or not there would be leave to replead. So it functionally approaches what Justice Gummow asked me to consider, namely, it might amount outright to an application to amend your opponent’s pleading with whatever perversity that involves of suggesting a better pleading against yourself than presently exists. Normally, as Justice Heydon has asked me to consider, in our submission, it would simply be a matter of striking out something you do not like.
The mandatory language of rule 501 upon which, of course, I have relied certainly encompasses the judge initiated as well as the opponent initiated possibilities that have been just raised with me now. However, we point out the difference of wording between rule 501 issue in the proceeding compared to questions in controversy because it is the questions in controversy phrase which led to the reading that one sees at page 939 of Dwyer v O’Mullen. Mr Justice Williams at page 940 of the report at about point 6 expresses what he calls his very decided opinion:
They mean –
that is, the words mean –
that the amendment is to be allowed to determine some question which the parties have been agitating between themselves before the day of trial.
Mr Justice Kerferd in the last sentence on page 941 is to the same effect:
this matter was not in controversy between the parties before the trial.
Now, first, that does not apply to rule 501 as now expressed. Second, if it did, it raises the question of level of generality. Third, in my case, our case, the question in controversy was whether the broker by shortcomings in conduct was responsible for the deficiency or disappointment we suffered in the insurance indemnity we obtained from the insurers. I accept that is a level of generality point because I do not retract any of the concession I have made about the new and different case we put about the nature of the alleged shortcoming of the broker’s conduct in the bulk of the amendment for which we obtained leave in the courts below.
It is a matter of level generality, I accept that, but it can be seen, for example, in this case that we are not asking for more damages under the amendment than we were pre‑amendment.
CRENNAN J: In terms of Dwyer v O’Mullen, I mean, one way of looking at it is to say the new case was not in controversy.
MR WALKER: That is right. The lady had said, “I did not execute the document”, and that that was radically different from, “I did execute the document but I thought it was about potatoes and flour and there was nothing about the transaction and particulars”, the Chief Justice points out, I think, “the consideration to suggest it was conveying my land”, and she was, after all, illiterate. I cannot resist reminding your Honours of the first sentence of the Chief Justice’s reasons in this case. I do not think that is a complete answer to its use by my learned friend, but one can certainly see these are very striking facts. I venture to suggest it may not have been determined on a failed amendment nowadays.
Your Honours, that is how we deal with that. It raises, obviously, the question – there is a difference between a defendant’s position and - Mrs Dwyer was the unfortunate defendant in that case - a plaintiff and we are a plaintiff. The difference is that a plaintiff within a limitation period, and before there has been any judgment or order or disposal of what I will call the first case, is at liberty, indeed one can talk of a right to commence fresh proceedings, and that is why rule 501(c) is important in this case because if we can do that then we could commence proceedings alleging the shortcomings now sought to be put in the amendments.
It is a fresh case, it has all the inconvenience if there is not consolidation, of the possibility of proceeding on a different track, perhaps even before a different judge and maybe even, therefore, on different evidence among the evils which were sought to be addressed by rules 21 and 501(c) - I do not suggest in any novel way, but certainly they are continuing evils in any litigation system.
FRENCH CJ: Would the subsistence of the limitation period protect you against an argument that by instituting fresh proceedings asserting matters which you could have raised in the earlier proceedings, there is an abuse of process? I am not talking Anshun, but beyond that, the wider penumbral sort of area.
MR WALKER: Yes, that is right. In other words, there is nothing of a common law or rules based nature akin to something like laches derived from some impression supposedly created by the original form of your first proceeding. Bearing in mind the faculty of amendment, it is very difficult, without very special facts as were available in Verwayen, for anyone to say that “I thought when I was sued in this form, this was the form that I would go to trial or judgment on”, and for a defendant to say that is particularly difficult because if it is good enough for the defendant to believe that of the plaintiff’s first form of pleading, why would that not be true in the plaintiff’s view as to the defendant’s first form of pleading, and that then raises the question of plaintiffs getting relief from a court when they should not according to law - which informs the administration of justice - they should not get it, because there is a good defence.
If raised late, then so long as prejudice can be met, which in the case of Verwayen it could not be, in the case of many a commercial case it can be, by the usual form of order, the money thrown away by reason of the amendment, and where there is a good defence which means that all sorts of factual exploration was unnecessary, then the defendant, in our submission, is in a position to come to court and say – I stress the defendant is in the position to come to court and say – “I am sorry that I did not think of this earlier, I accept that I have to pay the money thrown away by the plaintiff”, but the state of law between the parties, that is the legal rights and obligations between the parties, deny that this plaintiff should get any relief.
GUMMOW J: I think it is clear from Batistatos that the taking of a step in the litigious process, that step itself can be an abuse.
MR WALKER: Yes.
GUMMOW J: Maybe that is a satisfactory explanation of Verwayen, because if you look at it as estoppel, the representation had been withdrawn and withdrawn by telling them and then getting the amendment.
MR WALKER: That is right. Verwayen is, in our submission, irretrievably complicated by ‑ ‑ ‑
GUMMOW J: It may be very simple actually.
MR WALKER: I am sorry. An understanding of it is complicated by the extraordinary difference between the treatment of the amended application and then the reply to the defence and, in our submission, generalisations about the jurisprudence of amendment from Verwayen would be dangerous because Verwayen itself does not determine the question of amendment but it is based upon a rather odd decision as to amendment.
GUMMOW J: It is also odd because the relationship between the parties, as it were, was purely litigious, which is an unusual setting in which to start worrying about estoppels.
MR WALKER: Yes. Being litigious it involves the possibility of amendments, just as it involves the possibility, with the best will in the world by both case managers and litigators, of surprising evidence at trial, all of which, in our submission, means that one cannot really attach any weight to the idea that the form in which one is first sued any more than the form in which there is first a defence put on, must be seen as a point from which there cannot be or should not be, except in the most exceptional circumstances, departure.
Now, I hope I am sensitive to the fact that that does not mean that it ought to be translated into anything in the nature of a right, let alone an untrammelled right, simply to stand up at any point, toll an imaginary bell and say “I have now thought of another point. I have got a right to have this determined. This is a real issue”, et cetera. We do not rely upon any such approach. We do, however, say that once something is a real issue, then a proper approach is to say, can this be done and approaching the matter constructively, seeing the exercise under rule 21 to be the resolution of real issues. If it can be done, that means without injustice, then it should be.
I accept that “without injustice” has a rather wider content nowadays because it includes not only matters for which the salve of money can be seen as an appropriate salve, but also understanding that there may be continuing injustice even with an appropriate costs order, hence the Verwayen prejudice. There was none of that in this case and therefore there is no misdirection by the majority in the Court of Appeal or the first instance judge on that point below.
On the limitations question, there could not be anything in the nature, in our submission, of abuse of process or Anshun if a party, knocked back from making an amendment thereafter within the limitation period, commences proceedings.
It seems extraordinary to say that because this had not been in dispute earlier – you have now discovered that there is something that gives you grievance against a party – the court will not let you add it to the present proceedings. There is no doctrine of law, in our submission, that says you have lost a right to sue. That would appear to give rise to the possibility of a whole new area of exploration, doctrinal as well as evidentiary raised, such as, for example, is the putative defendant responsible in some way for you only having recently discovered an extra way of putting your grievance or a new grievance against that defendant?
In our submission, that would be a most unrewarding way for court resources to be spent, which one should get down to determining the real issues raised. The plaintiff says, “The defendant owes me money because of X”. If the plaintiff cannot add Y to that case then the plaintiff starts a new case: “The defendant owes me money because of Y”. The court has the processes of consolidation to avoid multiplicity but rule 501(c) has, in any event, a mandatory or imperative aspect that that would be an amendment necessary in order to admit what is, in the lexicon of the rule, a real issue in the proceeding.
Now, I confess it is difficult and somewhat strained to say that an issue that would be raised in another proceeding sued on in time, therefore, becomes a real issue in the proceeding within the meaning of rule 501(a), but there is no such difficulty in saying it falls within rule 501(c). It is necessary in order to avoid a multiplicity of proceeding.
FRENCH CJ: If we assume that case management issues, questions of the limited availability of court resources are to be given perhaps greater weight than they were in JL Holdings and if we take the simple case of an amendment refused because it reflects a failure to comply with case management directions and is raised on the eve of the trial and would result in a waste of court resources, loss of time and so forth, putting aside prejudice to the respondent, does the existence of an unexpired limitation period preclude the argument that the institution of fresh proceedings on the cause of action refused might constitute in that sort of context arguably an abuse of process, and having regard to what was said in Batistatos, of course, about the limits of what you can take from the limitation period?
MR WALKER: We submit yes, but it would be dangerous to put that as a universal rule because circumstances may alter cases, particularly ‑ ‑ ‑
FRENCH CJ: There cannot be a rule; I agree with that.
MR WALKER: ‑ ‑ ‑ actual dealings between parties of a kind that Verwayen has in spades.
FRENCH CJ: I am assuming no reliance issue of the Verwayen kind here.
MR WALKER: To take a case that would be favourable to my argument, if by dint of something, as it were, over-discovered – that is, something that was not necessary in discovery in proceedings one – something arises which gives rise to a suspicion then researched and solidified into belief that there is a new cause of action against the defendant. If there is still time left to sue – in other words, there is no rule in Weldon v Neal to worry about or court rules to deal with that problem in terms of amendment then, in our submission, the court entertaining the amendment application, even on the eve of or during the beginning of a trial, will be sensitive to the fact that, if refused, it is by no means straightforward that such a claim ought to be seen as unlikely to complicate matters in the future because it will be struck out as an abuse of process. In our submission, prima facie, it is not at all an abusive process. It is the ‑ ‑ ‑
FRENCH CJ: The circumstance weighs in your favour.
MR WALKER: Quite. It is the putting in train of a process which the court will not prejudge by saying, “Is your claim good or not?” That is what the trial will do. It is perhaps in the nature of things that defendants do not, as it were, disclose everything over and above the issues raised against them in present proceedings that might give a grievance to a plaintiff. It is for those reasons that, if a defendant succeeds in resisting an amendment in such a case, then, as it were, I regret to say, there may well be some unseemly race to see whether something in the nature of Anshun can be made available to the defendant by getting a judgment in the first case – it does not matter whether it is favourable or not; just getting a judgment in the first case – before there is a judgment in the second case.
That will then raise, of course, questions about whether in terms of the diligence and reasonableness which informs the Anshun estoppel, whether the way in which the amendment application was made and determined throws any light on whether or not there is such an estoppel for the second proceeding. All of that seems rather unseemly, with respect, but it will depend upon particular circumstances. For those reasons, no, as a rule, the availability of commencement by right of fresh proceedings to put that which you have failed to add by way of amendment will not indicate an abuse of process in those future proceedings. It might in particular circumstances but you would need considerable extra circumstances beyond simply raising a case after it has by decision become too late for you to add it by amendment. Now, that, in our submission, is true for this case as well.
It also throws some light on the pendency of litigation point that Justice Hayne asked me about yesterday. The pendency of litigation is not the only way in which of course co‑operations with the counsel or with obligations of disclosure or simply by dealings with their bankers may be prejudiced in circumstances I was asked about yesterday. It is really the pendency of the claim, that is, the known possibility contingently of a liability. That means, in our submission, the whole of the period between the raising of a claim, by a letter of demand for example, and the commencement of an action which need not occur until the end of the limitation period.
If that is all that is in question, that is, there is only ever one set of proceedings and it starts the day before the expiry of the limitation period, there is not, in our submission, any shred of justification to suggest that there is any abuse of process in that. The remedy relies in the legislature to shorten the limitation period. That is a pendency of claim and known uncertainty of contingent liability which the legislature, beyond any palliative cure by the court permits to happen, and it is an aspect of there being available processes which need not be initiated for a certain period, that is, the limitation period, in order to vindicate claimed rights.
CRENNAN J: Whilst you are dealing with prejudice, Ms Carr’s affidavit which goes to the work which has already been done in relation to the old case and 391 goes to the work which will need to be repeated in order to meet the new case, does that not show work which was being done and which will have to be done which has been carried out at an in‑house level, that is to say, obviously involving managers and solicitors working under her, as I understood the affidavit? I just wondered how you make the case that prejudice suffered can all be assuaged by an order for indemnity costs.
MR WALKER: Your Honour, with great respect, that is a point that is not answered by the way in which I have talked about the indemnity costs order to date. The way we have put it, in writing and in my address, does not answer what your Honour has raised. That point has never been raised by the other side in the sense that they have never said – I will stand corrected if I am wrong, but there was nothing in their written submission, there was nothing in the Court of Appeal to say “But there is all this work we did not get in our broking business” from the people who in‑house were busy responding to Ms Carr and her team.
In our submission, there is no reason in principle why the conditions that can be imposed, as well as cost orders which are of a limited category as your Honour’s question, with respect, correctly points out, there is no reason why a condition on leave, just as on a condition on adjournment, should not include the payment of appropriate compensation for diverted and wasted – and I stress “and wasted” ‑ ‑ ‑
CRENNAN J: Thrown away?
MR WALKER: Yes. In other words, the good old expression “thrown away” which is used in cost orders can as well be used to refer to executive time and I accept that that is something that can be taken into account.
HEYDON J: Do you know of any case where such a condition has been imposed?
MR WALKER: No, I do not. I have never heard of it, your Honour, ever. I think the explanation for that may be that the cultural expectation of lawyers has been that it is only those things which taxing masters permit, both as to kind and quantity in relation to costs, which can be seen as able to compensate. That has led, obviously, to the need in cases such as the present to address the yawning gap of quantum by indemnity. I accept that in terms of removing all prejudice of a kind that can be measured in money, for the reasons that Justice Crennan has pointed out, a cost order does not. However, I stress that has never been a live issue. There has never been an argument to that effect.
CRENNAN J: I did think Mr Gleeson was pointing to it in the context of debating the prejudice aspects of the case, but I may be wrong.
MR WALKER: But never in the context of, therefore the money is inadequate, so far as I can recall, but I have made my concession. The argument that I have put about indemnity costs, no it does not deal with that - it cannot by definition. My inability to point to any precedent in response to Justice Heydon’s question does not mean that there ought to be seen to be any limit in principle that would prevent such a condition being imposed in an appropriate case, but it would have to be an appropriate case where something was shown that needed to be compensated in order to avoid an injustice being done.
CRENNAN J: That is what I was getting at. I mean obviously costs do not cover every possible loss that has been incurred by a litigant, but that seemed to me to be a real issue here whether there was prejudice suffered which could not be assuaged by the indemnity costs order.
MR WALKER: Yes. Certainly that affidavit material, in our submission, does not make good the proposition of it being thrown away at least in whole, but the circumstances have altered in this case. I think it was your Honour yesterday who raised the point, well, so much time has now passed that things have to be done again, but there is nothing I can add to what I said yesterday about that. Yes, that has happened.
Now, on that point, by the way, may I give a reference. Justice Heydon asked me yesterday about the way in which written submissions were sought and permitted at the end of the argument about the amendment and the adjournment before Justice Gray. The transcript passage is in volume 2 of the appeal book. It starts at page 325 and it continues over to page 327. I do not want to read any passage of it but I draw to attention, in particular, that Mr Stitt understandably asked to know where everyone stood in relation to the balance of the hearing days. I think there is a slight error of punctuation in the transcript on page 327, Supreme Court line about 5. I think it should read:
My difficulty with respect to that is that until I have a response –
I think that is a response from the parties, one or other of the parties, AON, I think, the rejoinder that had been talked about –
I’m not in a position to say –
I think there should be a full stop at that point –
in any event the timetable that I’ve set –
and you see that that is the seven days referred to at the foot of page 326 –
is such that it seems to me that the matter is now to be determined ultimately after 8 December.
That seems to be how it happened. Could I then turn to the so‑called abuse of process point? I do not wish to add a great deal to what we have put in writing about this. Can I say this about two of the cases my learned friend went to yesterday. Goucher v Clayton is difficult for my learned friend to enlist in support of his argument, bearing in mind the difference in parties and the way in which the court disposed of the matter, because the way in which the court disposed of the matter made it clear that the consent nature of the judgment did not yield ‑ ‑ ‑
GUMMOW J: What is the citation of that case?
MR WALKER: Your Honour, the citation given ‑ ‑ ‑
HEYDON J: 13 WR 336.
MR WALKER: 13 WR 336 – because the nature of the consent judgment was such that in the absence of pleadings it did not yield any determination as to the validity of the patent and it was the absence of the pleadings, among other things, that prevented the effect being sought by way of an estoppel. There was two estoppels sought from two sources. One from the licence – that is a kind of non‑derogation from landlord’s title, as it were – and the second one was from the consent judgment.
The other case which we wish to refer to is Brewer v Brewer 88 CLR 1. There they were the same parties, and there was something in the nature of a consent judgment although there had been – as one might expect in the matrimonial jurisdiction – some exploration in fact and a determination in fact of the wife’s adultery. It is therefore all the more significant, in our submission, that in a different issue joined between precisely the same parties, the wife was held not precluded from pointing to the husband’s adultery for the purposes of the maintenance case; that cannot help my learned friend either.
But, in our submission, at the heart of the matter is the character of a consent judgment. The expression “consent judgment” neatly points up the role of the parties; consent and judgment the role of the imprimatur of the court. It is not just the statement of claim which lends content to what it is concluded by a consent judgment, it is the issues joined in the pleadings, and the issues joined in the pleadings between these parties – CGU and ANU – were joined on pleadings which were amended as to the defence just before the consent judgment was made; in other words there was adjustment of those issues.
An issue which had been constant in all versions of CGU pleadings was that CGU denied that it had contracted to indemnify in relation to the so‑called PNI properties, but there was, on the face of the pleadings, a concession that there was indemnity, but on terms different from those alleged by ANU with respect to the so‑called Schedule C properties. There was issue joined by denials and non‑admissions as to the amounts still outstanding under the conceded cover.
So that the issues between the parties which the consent judgment clearly settles - leaving neither ANU nor CGU at liberty to raise any of those matters again against each other – included the proposition that there were claims in relation to Schedule C, claims in relation to PNI and a different position of the parties in relation to both the availability of any cover plus the quantum of cover. The amount for which consent judgment was entered - and that is perhaps the most striking aspect of the content of the consent judgment, that is the amount is informative - is nowhere near large enough to mean that of necessity this went beyond the conceded Schedule C indemnity.
So, for those reasons, the consent judgment read and understood against the nature of the issues joined between the parties – you do not just look at the statement of claim, you look at the defence as well – does not yield the conclusion by inference any more than it does by, as it were, overt determination, that there was any conclusion between the parties that CGU was liable to indemnify with respect to PNI premises.
That is, of course, the issue that our learned friends argue was precluded by the consent judgment between ANU and CGU from now being litigated by ANU against AON. In our submission, there is no case that says any such thing and there is nothing in the nature of the consent judgment which factually could convey any such thing.
In the Court of Appeal reference is made by Justice Lander to an absence of factual material. That appears, and we have repeated that in our written submission, somewhat Delphicly I accept. The point is taken against us in the written reply. With respect, it is a good point. The content that we did not supply in our written submission we think is this. There is insufficient material factually to understand what it is that the consent judgment amount should be seen as covering.
Now, leaving aside the question of whether it would be admissible to explore that factually, that we think is the factual foundation that the Court of Appeal regarded as lacking and which plainly is lacking. I have sought really to put that to one side by pointing out that on the face of the pleadings, particularly given the amounts that we have drawn to attention in our written submission were claimed by us with respect to the various properties including Schedule C, one cannot read that consent judgment for that sum as extending to the PNI properties at all. The nature of the defences by CGU which delineate those issues to which I have just referred are to be found at these references to which I will not take your Honours but I will give you in volume 1 of the appeal book pages 130 to 131 paragraph 2, page 135 paragraph 19 and pages 137 to 139 paragraph 25 which is the section 28 defence.
The section 28 defence is important because that was joined issue between the parties and it means that there was credit claimed for additional premium as one of the alternative ways which CGU put to dispute the claim against it financially by ANU. That also has been determined by the consent judgment in that neither side is free to go back on that. That is another demonstration of the fact that one cannot see that consent judgment as speaking in any way about the encompassing of cover for the PNI as being available. May it please the Court.
FRENCH CJ: Thank you, Mr Walker. Yes, Mr Gleeson.
MR GLEESON: Your Honours, the submission we make based on Dwyer v O’Mullen 8 VLR 933 is that it usefully assists in identifying that the real questions in controversy or now the real issues are those which the parties have agitated between themselves and brought to trial. Mr Walker says that means agitated pre‑litigation. We submit it means agitated in the proceedings by the pleadings through the interlocutory process and the actual issues the parties brought to the court to try. That is clear in both judgments, but particularly Justice Williams at page 940.
GUMMOW J: I think myself the argument of – was it Mr Hood – yes, the real question was had this woman executed the instrument?
MR GLEESON: Yes.
GUMMOW J: An execution is not just a physical act, it is a mental act. So the issue they brought to the court seems to me is wider than what Chief Justice Higinbottom was saying. When we say a mental element, either non est factum, common law notion, or equitable notions of undue influence, surprise and catching bargains and Blomley v Ryan and so on.
MR GLEESON: The case may be influenced by a view that equitable challenges of that sort needed to be ‑ ‑ ‑
GUMMOW J: No no, common law non est factum. Not just equitable.
MR GLEESON: Yes.
GUMMOW J: The whole thing seems to be, to my mind, looking at it now through far too narrow a focus and I do not find it an attractive precedent.
MR GLEESON: Could I simply offer your Honours that at the level of principle and not the particular decision what Justice Williams put at page 940 at about point 6 that the rule requires amendments to determine questions “which the parties have been agitating between themselves before the day of trial”. It need not appear necessarily on the pleadings but it must be one that “has been in dispute or agitated” before the trial “and which they intended to raise, but by some slip did not”.
Now, in the present case as we would apply that, the issue agitated before trial was a simple one. “Did you fail to carry out your mandate to renew the expiring policy?” That was the issue. Nothing was needed to be done by way of amendment to the pleadings and still needs to be done now to enable that issue to be determined.
Secondly, your Honours, what has come out of the discussion this morning, I would respectfully submit, about the difference between rule 501 and 502, is that it is possible and perhaps the preferable view to view each of Cropper v Smith, Shannon v Lee Chun and even JL Holdings as essentially rule 501 type cases in that in each of those cases the court formed an evaluative view of what was the real controversy and allowed a party an opportunity in a case of good faith or mistake to make an amendment to ensure that the real controversy as the parties adjoined it was heard. I say that because in Cropper v Smith of course the real controversy was was the patent invalid and the court had decided that.
In Shannon 15 CLR 257 – that appears from the judgment of Justice O’Connor at page 263, the real matter in controversy being, was the money which you had undoubtedly advanced liable to be repaid? The amendment was made on the ground that it was the duty of the court that appears to invoke the origin of rule 501 to allow the pleadings to be brought into line with the real controversy. Justice Isaacs, we submit, at page 265 also approached the matter in that way. At about point 6 he relied upon the predecessor to rule 501, the same rule as in O’Dwyer.
That, we submit, your Honours, provides some light on the concept of multiple actions in rule 501(c). The multiplicity of actions being spoken of is that which Justice Isaacs is referring to at 265, if I was to send you away, would you be running a separate action which would be deciding in a different form the same issue, the same real controversy? If so, that would be a reason to allow it to be done here. We respectfully differ from the University that multiplicity of actions is not the broader conception they argue for, namely, if I send you away would he be running somewhere else some other action involving very different issues upon which you had never been joined to date.
That explains why rule 501, they fail under both (a) and (c). There is no prospect of multiple actions once the real issue is properly identified as the one I mentioned, namely, did you fail to carry out your mandate to renew a policy?.
HAYNE J: Just on this branch of multiple actions, the proposition you just advanced was if you are sent away, in effect, will there be a second action?
MR GLEESON: Yes.
HAYNE J: How procedurally would that have worked? Discontinuance of the existing claim could be, I presume, only by leave. How would you get rid of the existing claim? I am not saying you cannot, but how could you in a way that would not yield a difficulty of preclusion?
MR GLEESON: You may not be able, and my next submission is going to be that Shannon v Lee Chun, in any event, has probably been overtaken in part by Anshun, because the assumption that you could go in a second action and have the same dispute resolved but through a different set of allegations would now be precluded by Anshun. So to that extent Shannon has been overtaken. Your Honours, the passage I wanted to offer in JL which might indicate it is also a real 501 case is in 189 CLR 146. At page 154, at about point 7, when the Court said that whatever the state of the pleadings, the point might be unavoidable at the trial. The purpose of the amendment was to avoid surprise, but even if it raised a new defence and not merely something that had to be proved, in any event it constitutes a substantial answer to the claim. So the Court considered that in terms of the controversy the claim by JL necessarily threw up this defence as a part of that controversy.
The same would appear from page 155 at the end of the middle paragraph:
But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties.
On the Court’s reasoning it did not become an issue simply because someone asserted it late, it became an issue because it was regarded as being of itself within the real controversy. If that is right, and each of these cases is a real 501 case, what the University really is doing here is a 502 case saying, although the real controversy is narrow we would like at a very late stage to dramatically expand it to make it a different one. If it is a real 502 case, as we submit it is, JL does not stand in the way of it, does not erect any right in the University ‑ ‑ ‑
FRENCH CJ: I suppose any arguable defence is almost by definition within the scope of the existing controversy.
MR GLEESON: It is easy to see that within the controversy than a party saying it is here. That was my claim. It was about you failed to effect a defined renewal. My claim now is you never advised me on deductibles, you were involved in misleading valuations. The contract, contrary to Mr Walker, is in fact a different contract, it is now a 1999 contract, not a 2002 one, and contrary to his submission that it is the same shortfall for the first time there is a claim that extends beyond the PNI properties to the Schedule C, and that represents a different claim and a different amount of money.
Your Honours, the only other matters in reply on the first issue are these. It was said we have not sufficiently identified what the challenge to JL is. Our challenge is that if it is read as erecting a right, particularly in a case like the present, it is erroneous. It was said that a mistake should be given this broad meaning, “Any decision I previously made that I now wish to change.” That, we submit, is far too broad for the purpose at hand. It was also said we have never identified what might have been the particular tactic adopted and therefore they should be allowed to repent their decision. We repeat, that in the light of the failure to call Mr Will and Mr Owen’s limited evidence it was hardly for us to explain what their thinking was when they were not frank with the court.
In answer to the submission, there could be no reason for this decision other than just a change of mind. It is not hard to think that a litigant in the University’s position might have – I do not say they did because we do not know – but might have approached it this way. “I will join the broker, I will get them in. I will join them on a narrow case which is not too difficult to plead in the alternative. I will hold back a case which will be more difficult and complex on any view which will require me to allege in the alternative that I, the University, was a misrepresenter to my insurer and I will hold it back until the time suits me, and when it suits me, whether that is at the hearing when I ask for an adjournment or whether it is in a separate action where I do it there, I will just do that at the time most suited to my advantage, eg, after I have got the insurer to pay money, and in the meantime I can go hard against the insurer and say there is no section 28(3) case and in doing that I can treat the court rules and orders as something to be dispensed with and I have always got JL Holdings in my back pocket.”
Now, that is not a fanciful view that a litigant might have taken. We do not know what their view was. If that was their view, we submit it was improper and it is one that would not get any indulgence.
FRENCH CJ: That is inviting us to speculation, is it not?
MR GLEESON: We just do not know. That is the difficulty. Mr Walker has put it on the basis of it is impossible to think of any reason why this was done. Our primary answer is that is not for us and not for your Honours. It was for their witnesses and they did not call it. In terms of the prejudice and the pendency argument where it was said we did not prove enough, we needed to go into evidence, that having a $17 million claim outstanding against us for a significantly longer period would cause real burden to AON, we would submit that, having proven the size of the claim, having proven the work had to start again, that it involved the solicitors and management and the quite extraordinary scale of it – the whole case starting again – the pendency matter was fairly proved.
HAYNE J: Just return to the question of comparing the claim as originally framed and the claim as proposed, as framed the interests of AON and the University on at least some aspects of the issue joined were not different, were they?
MR GLEESON: That is correct.
HAYNE J: As the amendment was proposed, would there have been any interest common between them or would they have been opposed on all aspects of the claim as reframed?
MR GLEESON: On all, and I maintain the submission that if one looks at the existing pleading pages 97 to 103, that remains fully adequate to present the case they now wish to present. The pleading simply says, I am not insured for PNI. Previously it said that was an alternative plea. Now that is the plea and it is your fault because of your failure to effect a renewal.
Your Honour Chief Justice French asked a question of Mr Walker about abuse of process or some extended notion in relation to a new action to run the same matter. The answer that was given this morning was that if the party said, “I have just discovered, recently discovered, now discovered a point”, it is unlikely that it would be an abuse to raise that in a separate case. That proposition may not be a difficult one. The present case is, of course, one where a party would have to say, “I knew it all along, I deliberately chose not to bring it in the appropriate proceedings. I deliberately held it back but I now wish to do it in a separate action”, and we maintain that that would be an abuse of process.
BELL J: I do not know about the rules in the ACT, but would that be right in New South Wales looking at it generally, Mr Gleeson, given the provisions of section 91 of the Civil Procedure Act which contemplate that dismissal of proceedings not following a hearing on the merits is no bar to the commencement of further proceedings.
MR GLEESON: Section 91 is in the same form as the ACT provision and it would not operate as a bar in terms of a res judicata to those proceedings being commenced, I accept that. What we are putting it is on the ground of a broader notion of abuse. If I have a claim which I bring, there is another claim which I know is related in a fashion, I deliberately decide not to bring it because it suits me to hold it back and I then bring it in a separate action, Anshun would say that you would have to have a good explanation for why it was reasonable to generate a multiplicity of proceedings, the very evil that it generates. In New South Wales, I submit, that in a case where the explanation was as flimsy as the present, there would be a strong argument that they would be barred from doing it.
FRENCH CJ: At the point at which the primary judge made his decision, he had already made the adjournment decision. That was when he said in that piece of transcript to which Mr Walker took us that it was all going to go beyond 8 December. I suppose the simple question arises: what is the point in that setting of refusing the amendment, beyond a kind of a disciplinary point about the conduct of the applicant in those proceedings?
MR GLEESON: Your Honour, we would say that at the time the application was made on day three of the trial for adjournment, and then subsequently amendment, there was only one correct exercise of the legal discretion available. The judge, when he came to deal with the matter much later, misdirected himself; the correct exercise of discretion would have been straightforward, and it should have dealt with on that morning. His Honour should have said, “Where is the evidence? Where is your explanation? Where is the pleading? Why is this Court being trifled with? Why are 20 days that you solemnly asked me to set down in July - that you assured me was ready to go - are to be wasted?”, and had his Honour made that decision the trial would have proceeded and the trial would have finished comfortably within that week.
To the extent that because of his Honour’s delay in giving a judgment and the time needed to deal with – in an overly leisurely fashion – a motion, which in law deserved to fail, we would submit none of that should be put at the fault of AON, that is clear, and that AON should not be penalised by those two matters. It either lies in the judge’s dealing with it, or more particularly the University’s initiative in asking for something they should not have asked for. They should have simply got on with the case.
On that matter we submit if your Honours do find the errors that we assert in the various judgments below, this is a clear case where the Court should re‑exercise the discretion that occurred in JL Holdings. Your Honours should, if you find the errors, go on to say there was only one correct ‑ ‑ ‑
GUMMOW J: I am looking at your draft orders at paragraph 89 of your submissions. You have a footnote there about abuse of process. You do not seem to be asking for costs of the appeal to the Court of Appeal actually.
MR GLEESON: We currently have an order for the costs of the Court of Appeal.
HEYDON J: And no order as to costs? You were partially successful and substantially unsuccessful.
GUMMOW J: You look as if you got your costs at page 525.
MR GLEESON: Page 525, paragraph 4, which we do not ask to be disturbed.
GUMMOW J: You do not ask for disturbance of that.
MR GLEESON: Yes. Your Honours, in terms of the orders, if we were successful on the JL Holdings point, the order we would seek is as per the submission. If we were successful on both points, the same order is sufficient. The reasons would simply record that we have obtained it on two bases. If we were only successful on the second point, as we have indicated in the footnote, there would need to be a more discrete order allowing parts to the statement of claim. Perhaps I should seek to hand up a longer order which would indicate the paragraphs we say are specifically caught by only the second point.
FRENCH CJ: Has Mr Walker seen these?
MR WALKER: I am seeing it, your Honour.
MR GLEESON: If we succeed on, as I say, JL alone or JL plus a second point, the orders in paragraph 89 are sufficient. The reasons do the rest. The document I hand up is only in the event that we succeed solely on the second point.
GUMMOW J: Assuming you get these orders in their broad form, what is to stop the University then instituting a new proceeding on its fresh case? There will not be Anshun estoppel. There will not be an Anshun estoppel against them because they have tried, and what is the practicality of this?
MR GLEESON: The practicality of it is that we would argue that if the explanation remains as it is, there would be an abuse of process.
FRENCH CJ: In the institution of the fresh proceedings.
MR GLEESON: Of the fresh proceedings.
GUMMOW J: Why?
MR GLEESON: Why? Because the matters in the fresh proceedings were matters which were so closely connected to the first proceedings as in they arose out of the defences taken by the insurers. They were matters which were deliberately held back from that first set of proceedings for a tactical advantage, unexplained, and absence some other explanation – and we do not have that, there may be none next time – that the court would regard it as something which with reasonable diligence they would have brought forward at the appropriate time in the first matter.
GUMMOW J: You would have to show the abuse.
MR GLEESON: Yes, but we would expect them ‑ ‑ ‑
GUMMOW J: You just cannot grumble and say they have not explained themselves. You have to show the abuse.
MR GLEESON: We have to show the abuse and as Anshun itself indicates evidence can be relevant from the ‑ ‑ ‑
GUMMOW J: What you want to do is get out of Anshun in some way by using abuse of process doctrines, which is somewhat more flexible.
MR GLEESON: Well, I would not step away from Anshun, your Honour. We would rely both upon Anshun and on a broader abuse ‑ ‑ ‑
GUMMOW J: How could you rely on Anshun? Anshun talks about reasonably seeking to bring forward. That is what Vice Chancellor Wigram said. They have tried to bring it forward.
MR GLEESON: Unreasonably late so, your Honour, that would be the issue. Secondly, as the record stands they have not proved that there are any such proceedings that they have brought or served within time. They may do that, we do not know. So the practical utility can only be assessed against what we currently know in these proceedings and we just go a step at a time.
BELL J: Mr Gleeson, Justice Hayne asked you a question about the provision of the ACT Rules with respect to discontinuance. In addition to your answer to that question, do those rules make provision for the dismissal of proceedings or any part of the proceedings on the application of the plaintiff? I have in mind the equivalent of Part 29 rule 8 of the NSW Uniform Civil Procedure Rules.
MR GLEESON: Would your Honour just give me one moment? The rule which I think we provided the Court is rule 1614 and it deals with dismissals. That is the equivalent to the NSW ‑ ‑ ‑
BELL J: Rule 1614.
MR GLEESON: Rule 1614 - the dismissal, if it is not on the merits, does not prevent the plaintiff bringing the same cause of action. So one would infer that there is some separate agreement which has not been proved between the University and Chubb which gives Chubb the protection it needs in that matter, but that is simply not before the court. So we submit the trial judge was in error in seeing an inconsistency between reliance on the consent judgment and the dismissal.
HAYNE J: Forgive me, Mr Gleeson, I know I am being very slow. How does the University get rid of its existing claim against AON, right? It has been fixed for trial. It cannot discontinue, can it, without leave and that provokes consideration of the conditions on which you would grant leave to discontinue, in particular, whether it is with prejudice or without prejudice? There is a separate area for debate. Secondly, the case having been fixed for trial, is it open to AON to move on evidence for judgment which would produce some form of preclusion if it got judgment? There is an existing action that just does not disappear and I do not understand procedurally how that is done. Now, that is me being terribly slow and you will need to explain it to me.
MR GLEESON: Your Honour, the rules dealing with discontinuance are 1160 to perhaps 1167 of the Court Rules. I understand your Honour’s question to assume the University has now changed its mind and wants to bring a larger case but wants to get rid of the current case in a way that leaves it free to try and start a fresh action, if that be a ‑ ‑ ‑
HAYNE J: Yes.
MR GLEESON: Well, under those rules it can only discontinue with leave or with agreement because the matter has been fixed for trial. That is rule 1160(2). So if that were its intended course of action, it would come before the court, it would seek that leave and it would need to provide, we would submit, a very, very good explanation for why having had the case fully case managed, brought to hearing, assured the court it was ready, it now wished to abandon the 20‑day period.
Now, in that context AON would be entitled to say “We have prepared for the matter. We are ready to proceed. We do not agree with that. You should either consent to a dismissal, or you should proceed with your action.” That would be the procedural context in which any such attempt would be made. Of course, the University never did that. They tried to pursue this route where they could simply abandon the hearing and have the much larger case at a later date that they wished. I am not sure whether that has answered your Honour’s question; that is the best I can offer.
Finally, your Honour, on the second point are two submissions. We contend that the issue of principle is this. We accept that immediately before the consent judgment was entered CGU had on the record a partial traverse denying that the policy extended to the PNI properties. However, what happened was the plaintiff proceeded to ask the court to enter a judgment on its claim with neither party excising the issue of the PNI properties and neither party asking the court to make a finding on that issue in favour of the defendant’s traverse.
The effect of that is that the University has sought and CGU has given a consent to the traverse not being pressed at the very time it had to be pressed. I mentioned Justice Brennan’s comment in Verwayen about the importance the fresh right being generated by the judgment. The difference between the parties is essentially; the University says it is enough that you leave the defence on the file and that the amount of the judgment is less than what might have been a complete success, and they are a little unclear on the final step in the argument, in that event they seem to say the consent judgment only resolves the particular lease and determines $750,000 is payable but it says nothing as to the underlying issue of what properties were insured.
That would mean, if the University is correct, that Chubb can assert in other proceedings that those properties were not insured and the University does not have the benefit of a finding in its favour on that issue. That is why we submit that the obiter statement in Goucher is directly applicable, at least between the parties. Goucher said, if you plead that a patent is invalid but you allow the court to go to judgment on infringement without asking for your invalidity issue to be determined, it is gone. Your Honour, the last matter is, Mr Walker has said there is insufficient material.
GUMMOW J: Mr Gleeson, I suppose the questions I have been asking you and Justice Hayne has been asking you, amongst others, really focused on the question that would arise in this way. Assume that the Full Court should have said that the primary judge misunderstood the nature of the powers given and that we in this Court are then asked to do what the primary judge should have done and we are back at square one – the matters we have been raising with you, are they articulated in the primary judge’s reasons? Did he deal with them, these questions of how Mr Walker’s client would get rid of the claim it had ‑ ‑ ‑
MR GLEESON: No, they are not dealt with.
GUMMOW J: - - - whether it could do that, whether it could bring a new claim, what the impact of the one on the other would be and so forth? I do not think they there, are they, in the primary judge’s reasons?
MR GLEESON: No.
GUMMOW J: All I am asking you to consider is, it does not necessarily follow that of course the primary judge can be said to have misunderstood by over emphasising the importance of JL Holdings, that the result he reached was necessarily wrong if one were re‑exercising his power. This is the concern.
MR GLEESON: I understand your Honour’s question. What we have sought to put is, firstly, it is an appropriate case for this Court to re‑exercise the discretion and not simply to remit. We should bring the matter to a conclusion, if possible. But, secondly, the correct conclusion in the present case, in the end comes down to saying this party, having conducted the litigation on a particular footing, deliberately, having steadfastly refused to be frank with the court about why it made a late change, was asking for what must be one of the larger indulgences one can ask for, that 20 days of hearing be wasted and the opponent be told, “Start everything all over again”.
GUMMOW J: It comes back to a disciplinary matter, as the Chief Justice was putting to you, does it?
MR GLEESON: Not just disciplinary, your Honour, but recognising that the prejudice in the general sense will only fully unfold as all the work is done, again recognising the limited nature of costs, to say ultimately, as Justice Lander did, it is not a hardship to hold a party to the course it had deliberately taken for good reasons it has chosen not to explain and that would be sufficient, as an assessment of the factors, to say the amendment would be refused.
GUMMOW J: A lot of the cases are about defendants wanting to expand defences.
MR GLEESON: Yes, and this is simply saying ‑ ‑ ‑
GUMMOW J: One does not see so many cases where the plaintiff is trying to expand with a new case, in effect.
MR GLEESON: Yes. The plaintiff had the ability under these rules to join as many causes of action as it liked originally. It deliberately decided it did not want to do that. It chose to run a particular case, AON, having prepared on that case diligently, come to the hearing simply says “I wish to have that claim finally determined. I cannot know everything else the University will pursue me for but that one I can have fairly determined”. That would have been the correct result on 13 November and we submit that that would be the result to be applied today. Your Honours, the only final matter was on the estoppel question ‑ ‑ ‑
HAYNE J: Before you leave that, the intermediate step in the reasoning is that an order for the whole of the costs of the action to date on an indemnity basis would not suffice at that point, that is, the intermediate step in the reasoning is, I think, that the controversy as then framed was to be quelled once for all regardless of the fact that the controversy could have been framed – see the proposed amendment – in a larger or different way. Now, it is the validity of that intermediate step that I think is at issue in the questions that Justice Gummow raised. They underpin, I think, the questions that I was asking about, how you get rid of the earlier action because getting rid of the earlier action or the current action by discontinuance invites attention to, do you give leave; invites attention to, do you give leave on terms, in particular, do you give leave on terms that it is with prejudice, and that then becomes, we have a controversy framed in a particular way, that controversy is going to be quelled now. That is the area for debate.
MR GLEESON: I fully accept what your Honour is putting. A simple answer but not a complete one is that, that never having been the way this defaulting litigant sought to relieve itself from its predicament, it does not require to be determined in this case. That the costs order your Honour has spoken of is one which we have not obtained to date which the University has never offered as a condition of the leave.
GUMMOW J: You are asking us, I thought, ourselves to do what the trial judge should have done.
MR GLEESON: Yes, we are, your Honour.
GUMMOW J: The trial judge should have imposed a term, so be it.
MR GLEESON: Yes. So that would have provided better protection no doubt because it would have avoided the problem we have mentioned of how do you actually work out the difference between the old costs and the new costs. It should have been a minimum of the order, but the University was never submitting to that. That is only a partial answer to your Honour’s question.
Coming to the more fundamental level of it, is it right, and I submit it goes beyond discipline, but is it right – coming back to the importance of party autonomy and procedural fairness in preparing for the hearing – but having had the fullest opportunity to identify the breadth of the case they wished to make in these proceedings and all preparation on both sides being done against that defined case, is it right that they be able to come and say, “I just want to pay the price now for removing these things from you; the certainty of the hearing on the case you came to prepare, that is one matter we have mentioned; the impossibility to be adequately sure that prejudice will not emerge as the whole case gets reprepared again, and the fundamental proposition I can buy the indulgence without being frank with the court.”
MR GLEESON: I fully accept what your Honour is putting. A simple answer, but not a complete one, is that that never having been the way this defaulting litigant sought to relieve itself from its predicament it does not require to be determined in this case. The costs order your Honour has spoken of is one which we have not obtained to date which the University has never offered as a condition of the leave.
GUMMOW J: You are asking us, I thought, ourselves to do what the trial judge should have done.
MR GLEESON: Yes, we are, your Honour.
GUMMOW J: If the trial judge should have imposed a term, so be it.
MR GLEESON: Yes. So that would have provided better protection, no doubt, because it would have avoided the problem we have mentioned of how do you actually work out the difference between the old costs and the new costs. It should have been a minimum of the order, but the University was never submitting to that. That is only a partial answer to your Honour’s question.
But coming to the more fundamental level of it, is it right – and I submit it goes beyond discipline – but is it right, coming back to the importance of party autonomy and procedural fairness in preparing for the hearing, that having had the fullest opportunity to identify the breadth of the case they wished to make in these proceedings and all preparation on both sides being done against that defined case, is it right that they be able to come and say, “I just want to pay the price now for removing these things from you”. The certainty of the hearing on the case you came to prepare, that is one matter we have mentioned, the impossibility to be adequately sure that prejudice will not emerge as the whole case gets reprepared again, and the fundamental proposition “I can buy the indulgence without being frank with the Court”, we submit that goes beyond discipline, it goes to the relationship between the parties and the Court.
Your Honours know under rule 21 there is a special duty there that the parties must help the court to achieve its duty of ensuring that the real issues are those which are determined in a timely fashion. One cannot think of a party who did more to harm the court in the process than this University. Now, that being done, we submit there is no injustice to this University in saying this Court should now simply hold them to the course they had adopted. That litigation can be brought to an end.
HAYNE J: The condition of the kind I have described appears to have been imposed in Jacobs v Schmaltz 62 LT 122, King v Corke 1 Ch 57, Bowden’s Patents Syndicate Ltd v Herbert Smith & Co [1904] 2 Ch 86 and see on appeal [1904] 2 Ch 122 where the Court of Appeal held that if you accept those conditions you cannot later complain about it on appeal.
MR GLEESON: One is left in the end where the University, even today not asking for that discontinuance in the exercise of this Court’s discretion, it holds onto what it says is its right to self‑define the issues at the time that it chose, and that being the critical battleground on which we have fought, I would ask your Honours to exercise the discretion the way we have sought.
The final matter was simply insufficient material. We submit we have identified the material which was before the court in the making of the consent judgment. Nothing else has been pointed to and so the case can be decided on that basis. If your Honours please, they are our submissions.
FRENCH CJ: Thank you, Mr Gleeson. Mr Walker, in the event that you have a difficulty with any of the terms of the alternative orders sought, perhaps you can let us know with a note.
MR GLEESON: Yes. Perhaps in any event we will send a note, preferably a one‑line note, to say that ‑ ‑ ‑
FRENCH CJ: It is all right.
MR GLEESON: ‑ ‑ ‑ we accept that they are appropriate edits, if I can use that expression.
FRENCH CJ: Yes. Thank you. The Court will reserve its decision. The Court is adjourned until 10.00 am tomorrow.
AT 11.50 AM THE MATTER WAS ADJOURNED
303
0
0