Bird v Bird (No 2)

[2013] NSWCA 380

Court of Appeal

New South Wales

Case Title:

Bird v Bird (No 2)

Medium Neutral Citation:

[2013] NSWCA 380

Hearing Date(s):

On the papers

Decision Date:

18 November 2013

Before:

Beazley P at [1]
Macfarlan JA at [2]
Ward JA at [23]

Decision:

(1) Vary order (3) made on 16 August 2013 to substitute the amount of $122,652.35 for the amount of $188,920.25.

(2) Otherwise dismiss the respondents' Notices of Motion.

(3) Note that the Court declines to make any order as to the costs of the respondents' Notices of Motion or as to the post 16 August 2013 interest submissions and calculations.

(4) Direct Deborah Bird to lodge with the Court, and serve on the respondents, within seven days of the date of this judgment a calculation of the interest to which she is entitled in accordance with the Court's reasons for judgment, with a view to the Court making a final order in chambers as to the amount of the judgment inclusive of interest.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

PROCEDURE - judgments and orders - amending, varying and setting aside - UCPR r 36.16 - Court under misapprehension as to aspect of evidence relevant to judgment amount - misapprehension not the fault of the parties - judgment amount varied - applications to vary Court of Appeal orders concerning costs at first instance and on appeal - no submissions on costs put at appeal hearing - principle of finality - applications dismissed

Legislation Cited:

Civil Procedure Act 2005
Limitation Act 1969
Uniform Civil Procedure Rules

Cases Cited:

Aktas v Westpac Banking Corporation (No 2) [2010] HCA 47; 241 CLR 570
Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd [2013] HCA 44; 87 ALJR 1159
Streetscape Projects (Australia) Pty Ltd v City of Sydney (No 2) [2013] NSWCA 240
Tobin v Ezekiel (No 2) [2012] NSWCA 409

Category:

Procedural and other rulings

Parties:

Deborah Michelle Bird (Appellant)
Warrick Lindsay Bird (First Respondent)
Rodney David Bird (Second Respondent)
Herbert James Cannington (Third Respondent)
Estate of Mona Ethel Bird (Fourth Respondent)

Representation

- Counsel:

Counsel:
B W Rayment QC/J S Drummond (Appellant)
R Darke SC/M K Condon SC (First and Second Respondents)
C Champion (Third Respondent)

- Solicitors:

Solicitors:
Wilson & Co Lawyers (Appellant)
Hills Solicitors (First and Second Respondents)
Middletons Lawyers (Third Respondent)

File Number(s):

CA 2012/203657

Decision Under Appeal

- Court / Tribunal:

Supreme Court

- Before:

Rein J

- Citation:

Bird v Bird (No 4) [2012] NSWSC 648Bird v Bird (No 5) [2012] NSWSC 734

- Court File Number(s):

SC 2005/262267

JUDGMENT

1. BEAZLEY P: I agree with the reasons of and the orders proposed by Macfarlan JA.

2. MACFARLAN JA: The Court delivered judgment on this appeal on 16 August 2013 ([2013] NSWCA 262). It directed the parties to lodge written submissions concerning the interest to be awarded to Deborah Bird upon the judgment in her favour of $188,920.25. These submissions have been lodged. In addition, within the time prescribed by r 36.16 of the Uniform Civil Procedure Rules, the respondents filed Notices of Motion seeking amendment of the judgment amount and variation of the costs orders made by the Court. In accordance with subsequent Court directions, the parties lodged written submissions dealing with these issues.

3. The terminology and abbreviations used below are as used in the Court's previous judgment.

Variation of judgment amount

1. The respondents contend that I was acting under a misapprehension as to the facts demonstrated by the evidence in finding, in paragraph [71] of my judgment, that an amount of $66,267.90 which they alleged was paid by Mona in relation to the Carrington improvements after her receipt of the misappropriated sale proceeds was in fact paid before that receipt. I reached this conclusion because the evidence showed that prior to the receipt of those proceeds Mona had paid the virtually identical amount of $66,232 for that purpose. I overlooked the fact that the evidence also showed that a further amount of $66,594.70 had been paid by Mona for that purpose after her receipt of those proceeds. My finding in paragraph [71] of the judgment was accordingly incorrect in this respect. Deborah did not submit otherwise

2. In her post-judgment written submissions, Deborah contends that reconsideration of this finding should lead to reconsideration of a number of other aspects of my judgment, including the views as to allowances that I expressed in paragraphs [58] and [72]. However, I do not consider that I would have assessed those allowances in any significantly different way if I had not made the error to which I have referred. They do not therefore requirement reassessment. Furthermore, I do not accept Deborah's more general submission that she should be entitled to have various other views and conclusions that I reached revisited. The submissions that she has advanced in this respect are in my view ones that were, or could have been, advanced at the hearing of the appeal. No general reargument of the appeal should be permitted.

3. Deborah also submits that, as a matter of discretion, the Court should not vary the judgment. Whilst the Court has power to do so (see UCPR r 36.16), such a jurisdiction is to be exercised with great caution (Aktas v Westpac Banking Corporation (No 2) [2010] HCA 47; 241 CLR 570 at [6]) because of the public interest in maintaining the finality of litigation (Tobin v Ezekiel (No 2) [2012] NSWCA 409 at [7]; see also Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd [2013] HCA 44; 87 ALJR 1159 at [12] - [16]). It is appropriate however that the jurisdiction be exercised where, as here, the Court has undoubtedly and without the parties' fault proceeded on a misapprehension of a specific, material aspect of the evidence (Streetscape Projects (Australia) Pty Ltd v City of Sydney (No 2) [2013] NSWCA 240 at [11]; Castle Constructions ibid).

4. In these circumstances, I consider that the judgment amount should be reduced to $122,652.35 by deducting the sum of $66,267.90 from the sum previously stated. This is the variation sought by Warrick and Rodney. Mr Cannington sought a further reduction of about $4,000. That should not be made as his arguments in support of it simply amount to reargument of matters that were, or could have been, argued at the appeal hearing.

First instance costs

1. By its judgment of 16 August 2013, the Court ordered the respondents, Warrick, Rodney and Mr Cannington, to pay Deborah's costs of the proceedings at first instance. By their Notice of Motion, Warrick and Rodney sought a variation of the order to provide that the respondents pay 50 per cent of those costs. By his Notice of Motion, Mr Cannington sought a variation of the order to provide that Warrick and Rodney pay 50 per cent of those costs, with the three respondents to pay the remaining 50 per cent. Warrick and Rodney seek their variation on the basis that the failed Barnes v Addy claim against them was severable from the successful devastavit claim and that the former occupied more than 75 per cent of the hearing and preparation time at first instance. Mr Cannington's variation is sought on the basis that the Barnes v Addy claim, which was not pleaded against him, took in excess of 50 per cent of the hearing time at first instance. These percentages are supported by estimates in affidavits of the respective solicitors. On the other hand, Deborah's solicitor deposes that, on his calculations, 50 per cent of the 12 days upon which evidence was taken "did not touch upon nor was it directed to the Barnes & Addy claim" and that the balance was occupied with evidence relevant to both claims.

2. As I have indicated above, whilst the Court has jurisdiction to vary the orders it made on 16 August 2013, considerable caution is required before there is any exercise of its discretion to do so. The effect of the decisions to which I have referred, particularly that in Atkas v Westpac, is that parties should not be allowed to argue or reargue matters that were, or were able to be, argued at the appeal hearing. The position is otherwise where at the appeal hearing the parties have requested the Court to defer consideration of an issue such as costs and the Court has agreed to do so. Where that has not occurred, a revisiting of orders may be appropriate if there was some arguably good reason for the parties not to raise a matter at the appeal hearing, for example where an Offer of Compromise or a Calderbank offer was made and it was not desired to put the evidence of it before the Court prior to judgment.

3. As often happens, the parties here chose not to make submissions concerning costs at the appeal hearing, leaving it to the Court to make such orders as it considered appropriate in light of the outcome of the appeal. Furthermore, the parties did not request that they be given an opportunity at a later time to make submissions concerning costs.

4. In these circumstances, I consider that the Court should decline to entertain the applications for variations of the costs orders. The position in relation to those costs orders is different from that in relation to the application for variation of the amount of the judgment as the latter was based upon the Court's misapprehension as to a specific evidentiary matter and the misapprehension was not due to the fault of the parties.

5. I should note that I am not in any event persuaded by the evidence that has now been adduced that Deborah's failed Barnes v Addy claim gave rise to a severable issue, such that she should be deprived of part of her costs of the hearing at first instance. This claim appears to me to have been intertwined with her successful devastavit claim, with Warrick and Rodney's knowledge and conduct, and that of Mona, being relevant to both claims.

6. This being so, there is likewise no reason that would justify variation of the costs order in the manner sought by Mr Cannington. Contrary to his contention, the Barnes v Addy claim was not clearly severable, with the result that he, as a losing party, has been properly ordered to pay the costs of the successful party of the hearing at first instance. I note that it is possible that he will recoup from Warrick and Rodney some or all of the costs which he is liable to pay to Deborah as a result of the determination of his cross-claim on remission to the Equity Division (see order (6) made on 16 August 2013).

Appeal costs

1. By its judgment of 16 August 2013, this Court ordered Mr Cannington to pay Deborah's costs of the appeal and ordered Warrick and Rodney to pay 50 per cent of those costs. By his Notice of Motion, Mr Cannington seeks to have this order varied so that it provides for Warrick and Rodney to pay 50 per cent of Deborah's costs of the appeal, with the three respondents to pay the remaining 50 per cent. He contends that this is appropriate because Deborah failed on appeal in respect of a clearly severable issue (the Barnes v Addy claim) which occupied a not insignificant part of the appeal hearing time. He also says that he should not have to bear the burden of recovering from Warrick and Rodney 50 per cent of the costs payable by him to Deborah. Warrick and Rodney do not seek any variation of the order made on 16 August 2013.

2. For the reasons given in [9] to [11] above, Mr Cannington's application should not be entertained. In any event, I do not consider that the order made on 16 August 2013 was inappropriate. As is reflected in the proportions of the judgment devoted to the Barnes v Addy and devastavit claims, my assessment is that the latter (upon which Mr Cannington lost) occupied most of the appeal hearing time.

Interest on damages

1. The first issue between the parties in respect of interest concerns the date from which interest under s 100 of the Civil Procedure Act 2005 should be awarded. Deborah seeks it from 28 November 1996, when the executors made the first partial distribution to Mona of her legacy. However, the respondents rightly point out that interest may only be awarded under s 100 from the date upon which the relevant cause of action accrued. As I held in the judgment of 16 August 2013 at paragraph [79], when considering the respondents' Limitation Act 1969 defence, the devastavit claim accrued when any action that the executors might have been able to bring against Mona became statute barred, that is after the expiration of six years from Mona's misappropriations.

2. The first misappropriations were in late 1993, with the last (of $171,773.42) occurring in consequence of the sale of the property known as "No. 161" on 28 October 1994 (see judgment of Rein J at [8]). The respondents assert that interest should run from six years after 2 December 1994 which was presumably the date of settlement of the sale of No. 161. I agree with the respondents that, as the damages to which Deborah is entitled were not assessed by reference to individual misappropriations by Mona, but by reference to an hypothetical settlement agreement between the parties, it is not appropriate to calculate interest by reference to a period running from each individual misappropriation.

3. In my view, interest should be awarded from 2 December 2000 which is the date by which the cause of action in respect of all of the misappropriations had clearly arisen. I note that the Court is not concerned with whether the executors could have recovered interest from Mona. The parties chose not to agitate that on the appeal hearing. Rather, what is relevant is that, if the executors had performed their duties, the estate would have received the amount of the damages assessed in the Court's judgment of 16 August 2013 (as now to be varied) and because they did not do so the estate has been "out of pocket". For this, Deborah should be compensated, to the extent of her share in the estate, by an award of interest.

4. The second issue between the parties concerning interest relates to delay. The respondents contended that Deborah should be deprived of some of her interest entitlement by reason of delay on her part.

5. I do not accept this contention. The purpose of an award of interest is in essence to compensate a party for his or her loss of use of money. Even if Deborah was guilty of the delay alleged by the respondents (which she denies), that delay was not of such a character as to justify a conclusion that Deborah should not be compensated for her loss of use of the money in question.

Conclusion

1. As the parties have each had some success (and lack of success) on the issues dealt with in this judgment, there should be no order as to the costs of the respondents' Notices of Motion or as to the post 16 August 2013 interest submissions and calculations.

2. The following orders should be made:

   (1)Vary order (3) made on 16 August 2013 to substitute the amount of $122,652.35 for the amount of $188,920.25.

   (2)Otherwise dismiss the respondents' Notices of Motion.

   (3)Note that the Court declines to make any order as to the costs of the respondents' Notices of Motion or as to the post 16 August 2013 interest submissions and calculations.

   (4)Direct Deborah Bird to lodge with the Court, and serve on the respondents, within seven days of the date of this judgment a calculation of the interest to which she is entitled in accordance with the Court's reasons for judgment, with a view to the Court making a final order in chambers as to the amount of the judgment inclusive of interest.

3. WARD JA: I agree with Macfarlan JA.

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