Boral Limited v Foley and Bear Pty Ltd trading as J&R Industries (No 2)

[2017] NSWCA 108

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Boral Limited v Foley & Bear Pty Ltd trading as J&R Industries (No 2) [2017] NSWCA 108

Hearing dates:

On the papers

Decision date:

25 May 2017

Before:

McColl JA, Payne JA, Emmett AJA

Decision:

(1) Pursuant to UCPR r 36.17, in addition to the orders made on 21 December 2016:

 

(5) Order that the respondent pay to Boral –

(a) $145,219.62, being the amount paid by Boral to the respondent in satisfaction of the orders of the primary judge;

 

(b) such payment to bear interest at the rate prescribed from time to time in r 36.7 of the UCPR, calculated from 1 February 2017 until the date of repayment;

 

(c) such payment to be made within 7 days of the date of this judgment.

 (2) Each party pay their own costs of Boral’s motion filed on 1 February 2017.

Catchwords:

APPEAL – RESTITUTION ‑ where appeal successful – notice of appeal did not seek restitution - application for order of restitution – slip rule - whether appropriate to order interest payable on the repayment amount

Legislation Cited:

Civil Procedure Act 2005 (NSW) s 101
Supreme Court Act 1970 (NSW) s 75A
Uniform Civil Procedure Rules 2005 (NSW) rr 7.29, 36.7, 36.17, 42.1, 51.19 and 51.54

Cases Cited:

Ambulance Service of NSW v Worley (No 2) (2006) 67 NSWLR 719; [2006] NSWCA 236
Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd (No 2) [2016] NSWCA 149
Boral Limited v Foley & Bear Pty Ltd trading as J&R Industries [2016] NSWCA 373
Cai v Zhang (No 2) [2009] NSWCA 317
Perisher Blue Pty Ltd v Vidakovic [No 2] [2006] NSWCA 326
Production Spray Painting and Panel Beating Pty Ltd v Newnham [No 2] (1992) 27 NSWLR 659
Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446
TCN Channel 9 Pty Limited v Antoniadis [No 2] (1999) 48 NSWLR 381; [1999] NSWCA 104
Woolworths Limited v Strong (No 2) (2011) 80 NSWLR 445; [2011] NSWCA 72

Category:

Costs

Parties:

Boral Limited (Appellant) 
Foley & Bear Pty Ltd trading as J&R Industries (Respondent)

Representation:

Counsel:
M Condon SC (Appellant)

  Solicitors:
Holman Webb Lawyers (Appellant)
Slater & Gordon (Respondent)

File Number(s):

2015/251634

 Decision under appeal 

Court or tribunal:

District Court of New South Wales

Jurisdiction:

Civil

Citation:

[2015] NSWDC 240

Date of Decision:

23 June 2015; 31 July 2015

Before:

Cogswell SC DCJ

File Number(s):

2012/357464; 2012/196212

Judgment

1. THE COURT: On 21 December 2016, the Court gave judgment in this appeal (Boral Limited v Foley & Bear Pty Ltd trading as J&R Industries [2016] NSWCA 373). The orders made by the Court were:

“(1)    Leave to file the respondent’s Notice of Motion dated 14 April 2016 is refused.

(2)    Appeal allowed.

(3)    Respondent to pay the appellant’s costs of the appeal as agreed or assessed.

(4)    Set aside the orders of Cogswell DCJ made on 31 July 2015 and in lieu thereof order:

(a)    Judgment for the defendant Boral.

(b)    Each party pay their own costs of the trial.”

2. On 1 February 2017, the appellant (“Boral”) filed a motion in the Court seeking the following orders:

“1. An order pursuant to r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW) that the orders of this Court of 21 December 2016 be amended by addition of orders that:

(i)    the Respondent pay to the Appellant the sum of $145,219.62 by way of restitution;

(ii)    the Respondent pay to the Appellant interest on the sum of $142,219.62 from 27 November 2015 until the date of these orders.

2.    Such further or other order as the Court thinks fit.”

3. On 20 February 2017, the Registrar made the following orders in relation to the motion:

“This matter is listed for Mention on 3 April 2017 9:00 AM before the Court of Appeal at Supreme Court Sydney.

The Court Orders that;

1.    Applicant to file and serve affidavit and submissions by 6 March 2017.

2.    Respondent to file and serve affidavit and submissions by 27 March 2017.

3.    Notice of Motion stood over to mention on 3 April 2017.

4.    Any Party contending for an oral hearing to address that in their submission.”

4. On 23 February 2017, a notice of change of solicitor was filed on behalf of Boral. Thereafter, Holman Webb Lawyers acted for Boral in the place of Boral’s former lawyers.

5. On 10 March 2017, written submissions were filed by Boral. No submissions or evidence were filed by the respondent to the appeal.

6. On 24 April 2017, Slater & Gordon Lawyers filed a notice of ceasing to act for the respondent in accordance with Uniform Civil Procedure Rules 2005 (NSW) r 7.29.

The evidence on the motion

7. Boral accepts that a restitution order was not sought in its notice of appeal and the question was not raised during oral argument on the appeal.

8. Affidavits sworn on 10 February and 10 March 2017 by Emanueli Oliveri, the principal of the firm formerly representing Boral on the appeal, and an affidavit sworn on 10 March 2017 by Fernando Caligiore, national credit manager of Boral, were read by Boral.

9. Mr Oliveri’s affidavit sworn on 10 February 2017 established that the notice of motion filed on 1 February 2017 was served on the respondent and that ASIC’s records demonstrated that the respondent was still trading at that date. Mr Oliveri’s affidavit sworn on 10 March 2017 established that:

1. on 27 November 2015 an amount of $145,219.62 was paid by Boral to the trust account of the respondent’s solicitors in satisfaction of the order of the primary judge, Cogswell DCJ, made on 31 July 2015; and

2. while it was Boral’s intention to seek an order for restitution in the event that the appeal was partly or wholly successful, by an oversight or slip no such order was sought.

10. Mr Caligiore’s affidavit sworn 10 March 2017 established that:

1. on 27 February 2017 Boral wrote to the respondent demanding restitution of the amount of $145,219.62; and

2. the total amount claimed by Boral with respect to its application for a restitution order is:

“(a)    $145,219.62 representing the Judgment Payment; and

(b) $2,377.23 representing interest on the sum of $145,219.62 pursuant to section 101 of the Civil Procedure Act for the period 22 December 2016 to 10 March 2017…; and

(c)   any additional interest continuing at the rate of $29.84 per day from 11 March 2017 up to the date of final orders being made in these proceedings; and

(d)    the costs of this application.”

11. The evidence is silent about whether Boral intended, in addition to seeking an order for restitution, to seek an order for the payment of interest.

12. The evidence does not disclose any response by the respondent to the letter making a claim for restitution.

Consideration

13. The Court’s power to order restitution is found in s 75A of the Supreme Court Act 1970 (NSW) and rr 51.19 and 51.54 of the UCPR: Cai v Zhang (No 2) [2009] NSWCA 317 at [26]; Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd (No 2) [2016] NSWCA 149 at [15].

14. The relief sought by Boral can properly be granted after the appeal has been determined: Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd at [19]. The Court may grant relief under the slip rule in these circumstances. This rule, contained in UCPR r 36.17, provides:

“If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error.”

15. The relevant statutory provisions should be construed as conferring a power to order restitution and not a discretion to refuse it: see Perisher Blue Pty Ltd v Vidakovic [No 2] [2006] NSWCA 326 at [8].

16. A successful appellant is entitled as of right to recover all moneys paid under the judgment that has been set aside: TCN Channel 9 Pty Limited v Antoniadis [No 2] (1999) 48 NSWLR 381; [1999] NSWCA 104 at [4]; Newham [No 2] at 661; Woolworths Limited v Strong (No 2) 80 NSWLR 445; [2011] NSWCA 72 at [25].

17. In Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd the Court said:

“[16]…As was stated in Production Spray Painting and Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659, “an order for restitution follows as of course from the quashing of the orders [below]”. See also Cai v Zhang (No 2) at [24] per Basten JA; Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; 53 NSWLR 600 at [14]. That right is a right to restitution with interest: Heydon v NRMA Ltd (No 2) at [14].

[17] As the authorities make clear, the Court would have been required to make the order for restitution even had the formalities of including the claim in the further amended notice of cross-appeal not been observed.”

18. In Cai v Zheng (No 2) Basten JA said:

“[24] …[t]he sole basis upon which the payment was received was in part payment of a judgment which has now been overturned. The entitlement to keep the payment disappeared with that judgment.”

19. Boral submitted that, in light of the foregoing, there is no viable basis for the respondent to retain the monies which it received. The failure to seek repayment arose from an error made by Boral’s previous lawyers.

20. That submission should be accepted. The relief sought by Boral can properly be granted after the appeal has been determined and, as the authorities cited above make clear, the Court may grant relief under the slip rule in these circumstances.

21. A possible objection that the relief sought here is set at nought by the mandatory terms of UCPR r 51.19, requiring (relevantly) an appellant who seeks an order for reinstatement or restitution to include in the notice of appeal a claim for the order and the form of the order, should be rejected, as it was in Cai v Zheng (No 2). The power to waive compliance with the rules, either in whole or in part and to grant relief which is appropriate in the circumstances of a case, without procedural unfairness to the other party, is the guiding principle by which the Court operates in all circumstances. It is the principle expressed in s 56 of the Civil Procedure Act 2005 (NSW).

22. A further possible objection is that the notice of motion was filed after the 14 day time limit provided by UCPR r 36.16 had elapsed. That objection should also be rejected. While in Cai v Zheng (No 2), the Court treated the making of an application within 14 days after delivery of judgment as relevant, UCPR r 36.17 is not so limited. An order can be made “at any time”. In Barrak Corporation an application under UCPR r 36.17 was granted after the expiry of the 14 day period fixed by UCPR 36.16. On a not dissimilar issue, the Court at [18] approved the remarks of McHugh JA in Storey &KeersPty Ltd v Johnstone(1987) 9 NSWLR 446 at 452, concerning a provision of the District Court Rules 1973 (NSW) which was in much the same terms as UCPR r 36.17:

“If the proposed variation of an order relates to a matter which was in issue in the proceedings or to something which was incidental to such a matter, the court, in my opinion, has power to amend its order if the need for the variation is the result of an accidental omission or mistake. Matters such as costs or interest on a judgment, for example, are almost always incidentally involved in proceedings, and the court has power to deal with them even though they are not specifically raised at the hearing provided, of course, the omission was accidental.”

23. The failure to seek an order for restitution was, on the evidence, the result of an accidental omission or mistake by Boral’s previous lawyers. Restitution of the sum paid by Boral as a result of the primary judgment was incidentally involved in proceedings. The Court has power to deal with the application for restitution even though it was not specifically raised at the hearing as the omission was accidental.

24. The order for restitution in Boral’s favour should be made.

Interest

25. In Woolworths Limited v Strong (No 2), Campbell JA said:

“[33] Interest is awarded because it is only if both the principal, and also interest, are paid to the appellant that the appellant can be put back in the situation in it would have been in, if the lower court had not incorrectly granted judgment against it.”

26. In Cai v Zheng (No 2), Basten JA found that the prejudice suffered by the respondent by reason of the delay in the appellant’s application for restitution of moneys paid in satisfaction of a judgment overturned on appeal, could be remedied through adjusting the amount of interest recoverable:

“[32]… the question is whether, in all the circumstances of a particular case, it is appropriate to award interest on an order for repayment of an amount of a judgment, paid in part as a condition of a stay.

[33] In the present case, a significant consideration is the failure of the appellant to seek an order for repayment of the money or, if that were to be implied as sought in the usual course, an order for interest on the amount outstanding. Such an order, sought in the notice of appeal, might have placed the respondent on notice as to what might be required of her if the appeal were successful. Accepting that, properly advised, she should have been alert to the fact that repayment might be required, it is not so clear that she would have been advised that an order for repayment would necessarily attract a requirement to pay interest when none was claimed. The circumstances of the present case are satisfied by ordering that interest be paid on the amount outstanding from the date of the notice of motion seeking to amend the notice of appeal to include the claim for interest, namely 27 February 2009.”

27. In the present case, those considerations are equally important. It is to be noted here that despite three affidavits being filed by Boral about the error made by its previous lawyers in failing to seek an order for restitution, the evidence is silent about Boral’s intention, if any, to seek an order for the payment of interest.

28. Properly advised, the respondent should have been alert to the fact that repayment might be required. It is not so clear that it would have been advised that an order for repayment would necessarily attract a requirement to pay interest when none was claimed. It is a significant consideration here that until 1 February 2017 Boral failed to seek an order for repayment of the money or, if that were to be implied as sought in the usual course, an order for interest on the amount outstanding. Boral seeks an indulgence from the Court. In the evidence it filed in support of the making of these orders Boral indicated that it sought interest only from the date of this Court’s principal judgment (22 December 2016), and not from the earlier date identified in its notice of motion. As noted above, the evidence did not address the question of whether the failure to seek an order for interest arose from a slip or mistake of Boral’s previous lawyers. The circumstances of the present case are satisfied by ordering that interest be paid on the amount outstanding from the date of the notice of motion seeking to amend the notice of appeal to include the claim for interest, namely, 1 February 2017.

29. Boral is entitled to interest calculated in accordance with s 101 of the Civil Procedure Act, unless some other rate is applied for. Given the respondent’s silence on this motion, and since the respondent bears the onus of establishing that a rate other than the prescribed rate should be applied (see Woolworths Limited v Strong (No 2) at [30]), the applicable interest rate applied is that as prescribed from time to time in r 36.7 of the UCPR.

Costs

30. In Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd, the Court at [21]-[23] makes clear that there is no usual order which is made on applications of this kind. The question remains one of discretion, subject to UCPR r 42.1.

31. In this case Boral, by its letter dated 27 February 2017, offered to pay the respondent’s costs of the motion as an element of the open offer recorded therein. That letter elicited no response and the offer lapsed.

32. The orders sought in Boral’s motion did not include an order for costs. In its written submissions, however, Boral indicated that it did seek its costs of the motion and would seek leave to file an amended notice of motion to that effect. No such application was filed.

33. Having regard to the nature of this application seeking an indulgence from the Court and Boral’s failure to seek an order for costs in the motion it filed, no order for costs should be made with the intention that each party bears its own costs.

34. This application only arose because of Boral’s failure to seek an order for restitution and the respondent’s failure to respond to correspondence about the issue. Each party should pay their own costs of the motion.

Conclusion and orders

35. For the forgoing reasons the orders of the Court are:

1. Pursuant to UCPR r 36.17, in addition to the orders made on 21 December 2016:

(5)    Order that the respondent pay to Boral –

(a)    $145,219.62, being the amount paid by Boral to the respondent in satisfaction of the orders of the primary judge;

(b) such payment to bear interest at the rate prescribed from time to time in r 36.7 of the UCPR, calculated from 1 February 2017 until the date of repayment;

(c)    such payment to be made within 7 days of the date of this judgment.

2. Each party pay their own costs of Boral’s motion filed on 1 February 2017.

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Decision last updated: 25 May 2017