Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross; Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Thelander; Certain Lloyd's Underwriters Subscribing to Contract No...

[2015] HCATrans 345

[2015] HCATrans 345

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S417 of 2011

B e t w e e n -

CERTAIN LLOYD’S UNDERWRITERS SUBSCRIBING TO CONTRACT NO IH00AAQS

Appellant

and

JOHN CROSS

Respondent

Office of the Registry
  Sydney  No S418 of 2011

B e t w e e n -

CERTAIN LLOYD’S UNDERWRITERS SUBSCRIBING TO CONTRACT NO IH00AAQS

Appellant

and

MARK GEORGE THELANDER

Respondent

Office of the Registry
  Sydney  No S419 of 2011

B e t w e e n -

CERTAIN LLOYD’S UNDERWRITERS SUBSCRIBING TO CONTRACT NO IH00AAQS

Appellant

and

JILL MARIA THELANDER

Respondent

Summonses

FRENCH CJ

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO SYDNEY

ON THURSDAY, 17 DECEMBER 2015, AT 8.58 AM

Copyright in the High Court of Australia

____________________

MR M.J. STEVENS:   May it please the Court, I appear for the applicant in each matter.  (instructed by Riley Gray‑Spencer Lawyers)

MR R.T. McKEAND, SC:   May it please the Court, I appear for the respondent in each matter.  (instructed by G H Healey & Co)

HIS HONOUR:   Yes, Mr Stevens.

MR STEVENS:   This is an application brought by summons dated 6 October 2015, supported by the affidavit of Mark Andrew Gray‑Spencer dated 2 October 2015, with exhibit MGS‑1.  We move on the application contained in the summons and supported by the affidavit which I seek to read and I tender the exhibit, your Honour, of MGS‑1.

HIS HONOUR:   Yes, all right, that affidavit is read.

MR STEVENS:   May it please the Court.  Your Honour, the applicant has provided submissions which I take it your Honour has had the benefit of being provided to you.

HIS HONOUR:   Yes, I have read the submissions, both for the applicant and for the respondents.

MR STEVENS:   Your Honour, shortly put, if I may, the applicant’s contention is that by accidental slip or omission the High Court erred in not dealing with the costs order in the Court of Appeal that was the subject of the appeal to this Court. 

HIS HONOUR:   Yes.

MR STEVENS:   We say, as we have set out in the application and in the supporting submissions, two things – one in particular, that the respondents to the special leave application sought an order or an undertaking as to costs in respect of the special leave application and the appeal.  No order was sought in that application for any costs order to be disturbed in the court below.  Similarly, there was no application brought in respect of the appeal to this Court in respect of the costs order in the Court of Appeal.  Thirdly, the appellant in the instant appeals was not called on or sought to make any submissions in respect of a costs order contrary to costs following the event in the event that the appeal was successful in the Court of Appeal.

Your Honour may recall that the instant appeal was heard in conjunction with an appeal brought by the State of New South Wales in a related matter, which the parties have referred to as Williamson and in this Court it was The State of New South Wales v Williamson.  The history of that matter included Williamson obtaining a costs order in his favour at first instance.  Leave to appeal to the Court of Appeal in the Williamson matter was conditional upon a number of items, the first of which was that the costs order below in the first instance not be sought to be disturbed and that the costs of the application for leave and of the appeal be paid in any event, regardless of outcome.  That is in contradistinction to the history of the instant appeals.

HIS HONOUR:   Yes, well, I am familiar with the history.  One question, I suppose, which arises immediately is why the insurers did not move promptly along the lines that they now seek to move for the order to be varied.

MR STEVENS:   Your Honour, the correspondence history dates back to 2013 and the debate was opened, as your Honour will see in – the matter was not raised until after a costs application ‑ ‑ ‑

HIS HONOUR:   The effect of the order must have been apparent to your clients, must it not?

MR STEVENS:   On a close reading of it, yes, your Honour, in that sense, but the ‑ ‑ ‑

HIS HONOUR:   You wanted orders 4 to 7 of the orders of the Court of Appeal set aside and what was set aside were paragraphs 4 and 5 – 6 was not set aside, which is the relevant one.

MR STEVENS:   Yes, your Honour, 6 was not set aside.  Delay can only be explained by the history of the correspondence between the parties starting with, in effect, in October 2013 the discussion, if I could call it that, opening in respect of the High Court’s costs.  Thereafter, in February 2014, discussions were raised in respect of the order that was not discharged.  From there, various letters were sent, which were not responded to, right up until July 2015, and thereafter the instant application was made.

HIS HONOUR:   The practical consequence is that you are asking me to infer, by reference to the prior history in terms of the undertakings given and the orders sought on your notice of appeal, that the omission to set aside paragraph 6 of the orders made in the Court of Appeal constituted either a clerical mistake or an accidental slip or omission.  This is in a circumstance where your clients were running – and they put it really squarely in this way, I think, on the application for special leave – a case which was of ongoing significance from their point of view because it raised an important question of statutory interpretation.

In some circumstances, as you are well aware, it is not unprecedented for the Court to order that all parties who offer an undertaking, for that matter, that the costs orders made in the court below will not be disturbed.  I think reference has been to CSR Limited v Eddy in that respect and, of course, Williamson is another case which demonstrates it.  Now, why should I infer, on the basis of the materials that you have put to me and characterised the decision of the court – the orders of the court made in 2012 in this respect as arising from an accidental slip or omission?

MR STEVENS:   Your Honour, all I can say to that point is that it was never sought to be raised by the respondents to the special leave application or the appeal that there be an order of the type that your Honour was referring to in respect of the court below.  Reference was made to CSR v Eddy in conjunction with the instant application – I beg your pardon, your Honour, I should withdraw that – in conjunction with the lead application no submissions were made or called for either party in respect of the CLU matters in respect of disturbing or otherwise the court’s – sorry, in respect of the costs order in the court below.

Your Honour, the only additional matter that I believe I can add is that in CSR v Eddy there was – I beg your pardon, your Honour, I withdraw that.  Your Honour’s recollection is superior to mine in respect of the special leave application.  The special leave application was ‑ ‑ ‑

HIS HONOUR:   Well, there is nothing superior to the extent that I have read it.  I presume you have done the same.

MR STEVENS:   Yes, your Honour.

HIS HONOUR:   I have no independent recollection of it.

MR STEVENS:   My recollection of reading it, there was reference, of course, your Honour, to the tension that had occurred between an opinion expressed by his Honour Justice Campbell in the schedule to his judgment and that there was significance in respect of further matters, but not necessarily those involving CLU.  In the CSR v Eddy matter, the Court practically opened in its judgment, led by his Honour Chief Justice Gleeson, that the defendant was a notorious defendant and had an ongoing commercial interest. 

No evidence or matters were put to the High Court in the instant appeals about any notoriety on our part, so to speak, Certain Lloyd’s Underwriters, or that we were continuing, so to speak, in commercial matters that were particular to CLU and that the judgment of this Court would apply to those other commercial interests.

It is readily apparent from the judgment in CSR and, not to be coy about it, CSR was known to be notorious and the Court respectfully correctly described CSR thus, that the matters in respect of CLU are distinct from that of CSR v Eddy.  If it had been the Court’s opinion that such a sanction, so to speak, in costs not following the event in the event of a successful appeal from the Court of Appeal’s decision, we would respectfully say that the Court – or contend that the Court would have called upon submissions in that respect from at least the adverse consequences to CLU.

Certainly, your Honour, we accept that this Court has and, at times should, make orders of the type in CSR v Eddy but not necessarily as a matter of course, ergo ‑ ‑ ‑

HIS HONOUR:   A problem that you confront, I think, or must confront, Mr Stevens, is the scope of the so‑called slip rule as reflected in Order 3.01.2.  I have in mind what was said in the joint judgment in Burrell v The Queen (2008) 238 CLR 218 at 224, and more recently in Achurch v The Queen (2014) 253 CLR 141 in the joint judgment of Justices Crennan, Kiefel, Bell and myself where we quoted from Burrell in relation to the operation of the slip rule as an aspect of the inherent or implied powers which allows for limited correction of an order after its final entry.  What was said in Burrell was:

The power to correct the record so that it truly does represent what the court pronounced or intended to pronounce as its order provides no substantial qualification to that rule.  The power to correct an error arising from accidental slip or omission, whether under a specific rule of court or otherwise directs attention to what the court whose record is to be corrected did or intended to do.  It does not permit reconsideration, let alone alteration, of the substance of the result that was reached and recorded.

Now, I wondered to what extent you are really directing attention to, or complaining about the substance of the result, having regard to the submissions that were or were not made.

MR STEVENS:   The position that the applicants contend is that had it been the Court’s intention to upset a longstanding principle such as the costs following the event, the applicants respectfully contend the Court would have sought submissions as to whether that ought to occur or not if it were so minded.  The absence of that and the absence of there being a specific request for a costs order of that type to be made, we say indicates that the Court had not respectfully turned its mind to the consequence, and in explanation of that, the applicants respectfully contend that, given the history of the Williamson matter, it may have been, and was in fact, overlooked, ergo, had the High Court been of the view that there ought to be a different costs order from their well‑established rule, something would have been said, even if were in passing, in the orders that the Court had made.

HIS HONOUR:   Yes.

MR STEVENS:   I do not think I can add anything further to that, your Honour.  I have not turned my mind specifically to Burrell and to the Court’s and your Honour’s decision in Burrell.  However, your Honour, that is the framework in which we say ‑ ‑ ‑

HIS HONOUR:   Well, the distinction is obvious enough, is it not, between an accidental error or omission, on the one hand, and a matter which goes to substance on the other, or even a complaint about procedural fairness?

MR STEVENS:   Your Honour, if it were that I was making an application that we reopen to argue on the question of costs, indeed, but that is not what we are doing.

HIS HONOUR:   I understand that.

MR STEVENS:   Yes.

HIS HONOUR:   In other words, I am suggesting what is said in Achurch and in Burrell is something which you might glean just by looking at the text of rule 3.01.2.

MR STEVENS:   Yes, your Honour.

HIS HONOUR:   All right.

MR STEVENS:   Your Honour, as I said, as far as I am able, the submissions on the point have been put in the written submissions and I do not believe that I could add anything further than I already have.

HIS HONOUR:   No, I think you have covered the territory, with respect, Mr Stevens.

MR STEVENS:   May it please the Court, unless there is anything further.

HIS HONOUR:   Thank you.  Yes, Mr McKeand.

MR McKEAND:   Your Honour, the submissions that I have put follow a logical pattern. 

HIS HONOUR:   That is good to know.

MR McKEAND:   At least to my mind, your Honour.

HIS HONOUR:   Yes.

MR McKEAND:   The first point is that it is apparent that the court gave consideration to the making of the order and there is no error or omission.  The order was considered in the joint judgment, as I have indicated in paragraphs 1 and 2.  Justice Kiefel agreed with the orders that were proposed, so the fact is that each of the Judges in the majority turned their minds to that particular fact.

The second point is that in principle it does not matter one iota whether or not the special leave application had been granted on terms of an undertaking.  The Court would always have the power to make the order of the CSR v Eddy type in any event.  What is quite, in my submission, apparent is that the…..in CSR v Eddy was relied upon in the special leave application and the third element of it, the maintaining the order of the Court of Appeal was overlooked.

There is absolutely no reason why it would have been deliberately omitted, but in any event, CSR v Eddy being brought to the attention of the Court and the Court bringing it to the attention of the counsel for the other parties, they all acknowledged that – or they effectively acknowledged they came within the ambit of the CSR v Eddy consideration.  Orders of that kind were of a likely event if the undertaking had not been given.

If you follow that through then to the time of the hearing, the CSR v Eddy considerations prevailed again and your Honours acted in accordance with them and that is without submissions and without any specific application being made.  But it is certainly not a case where there is a slip of the kind that your Honour has referred to that would come within the rule, 3.01.2.  That is effectively the substance of these submissions.

Ultimately, we say that because of the lapse of time and the clear indication that was given in the letter that is part of the exhibit MGS‑12 to Mr Gray‑Spencer’s affidavit, it is an appropriate case where the position being sufficiently clear this application should not have been made.  We, on that basis, are seeking indemnity costs of the application.

HIS HONOUR:   Thank you, Mr McKeand.  Mr Stevens, do you want to say anything in reply?

MR STEVENS:   Just one thing if I may, your Honour.  The question of the consideration of CSR v Eddy was not raised at the time of the appeal by the appellants.

HIS HONOUR:   Yes, thank you.

On 12 December 2012, this Court allowed three appeals by Certain Lloyd’s Underwriters Subscribing to Contract No IH00AAQS (“the insurer”) against decisions of the Court of Appeal of New South Wales.  A provision of the Legal Profession Act 1987 (NSW) (“the Act”) limited the costs that a court could order a party to pay to another if the amount recovered on a claim for personal injury damages did not exceed a specified sum.

The Court of Appeal decided, adversely to the insurer, that the respondents’ claims for damages in respect of assaults perpetrated on them were not claims for personal injury damages within the meaning of the cost‑limiting provision.  A judge of the District Court of New South Wales had decided in favour of the insurer that the cost‑limiting provision did apply.  The order of the District Court in each case had been:

1.The defendant insurer is to pay the plaintiff’s legal costs from 12 July 2005.  Those legal costs are subject to 198D of the Legal Profession Act 1987 (NSW).

2.Judgment reserved on the costs presently reserved.

On appeal, the Court of Appeal ordered that, in respect of each of the respondents, (who were applicants for leave to appear in that court):

1.Grant the applicants an extension of time to 24 September 2010 to file applications for leave to appeal.

2.In respect of each grant leave to appeal.

3.Direct that the applicants file within 14 days notices of appeal in accordance with the draft notices contained in the court file.

4.Set aside the second order made by the District Court on 22 April 2010 declaring that the legal costs are subject to section 198D of the Legal Profession Act 1987 (NSW).

5.Declare that the legal costs incurred by the plaintiff to be paid by the defendant in accordance with Order 1 made by the District Court on 22 April 2010 are not subject to section 198 of the Legal Profession Act 1987 (NSW), nor subject to section 338 of the Legal Profession Act 2004 (NSW).

6.Order that [the] respondents, (sic) [that is the insurer], pay the applicants’ costs in this Court.

7.If not disqualified pursuant to section 6(7) of the Suitors’ Fund Act 1951 (NSW), grant the respondents, that is the insurers, a certificate under that Act in respect of the costs of the appeals.

This Court granted special leave to appeal to the insurer in each case in the following terms:

Upon an undertaking by the applicant that it will pay the respondents’ costs of the application and appeal in any event, the Court orders that special leave be granted to the applicant to appeal to this Court from the whole of the judgment and order of the New South Wales Court of Appeal given and made on 1 June 2011 in Proceeding No CA 2009 [followed by each proceeding number]

The undertaking upon which special leave was granted was in terms sought by the respondents in their written submissions in the special leave applications.  The insurer agreed to that undertaking at the special leave hearing.

In each notice of appeal to this Court, the insurer sought an order that “Orders 4 to 7 made on 1 June 2011 by the Court of Appeal of the Supreme Court of New South Wales be set aside and, in lieu thereof, an order that the appeal to the Court of Appeal of the Supreme Court of New South Wales be dismissed with costs.”  An order in those terms would have set aside the costs order in favour of the respondents in the Court of Appeal set out in paragraph 6 of that court’s orders.

There were no submissions as to costs generally, nor the costs in the Court of Appeal on the hearing of the appeal to this Court.  In delivering judgment in favour of the insurer, this Court made the following orders in each appeal:

1.Appeal allowed.

2.Set aside paragraphs 4 and 5 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 1 June 2011 and, in their place, order that the appeal to that court be dismissed.

3.Appellants to pay the respondent’s costs of the appeal to this Court.

As appears from the above, this Court did not set aside paragraph 6 of the orders of the Court of Appeal in each case and, therefore, did not disturb the costs orders made in favour of the respondents by that court.

By summonses filed on 6 October 2015, the insurer sought, inter alia, orders that paragraphs 4, 5 and 6 of the orders of the Court of Appeal be set aside and that the respondents pay the insurer’s costs of each appeal to that court.  Alternatively, the insurer sought an order that there be no order as to costs in the Court of Appeal with the intent that each party bear its own costs of the appeal to that court.

In each case the application on the summons is made pursuant to rule 3.01.2 of the High Court Rules.  That rule provides:

The Court or a Justice may, at any time, correct a clerical mistake in a judgment or order, or an error arising in a judgment or order from any accidental slip or omission.

Relevant to the application of that rule are the observations which were made in Burrell v The Queen (2008) 238 CLR 218 at 224, which were quoted more recently in Achurch v The Queen (2014) 253 CLR 141. In the latter judgment, reference was made to the slip rule as an aspect of the inherent or implied powers allowing for limited correction of an order after its final entry, as explained in Burrell:

The power to correct the record so that it truly does represent what the court pronounced or intended to pronounce as its order provides no substantial qualification to that rule.  The power to correct an error arising from accidental slip or omission, whether under a specific rule of court or otherwise directs attention to what the court whose record is to be corrected did or intended to do.  It does not permit reconsideration, let alone alteration, of the substance of the result that was reached and recorded.

The power has been described in this Court in Gould v Vaggelas (1985) 157 CLR 215 at 275 as:

one to be exercised sparingly, lest it encourage carelessness by a party’s legal representatives and expose to risk the public interest in finality of litigation -

The insurer submits that the principle that the costs of a successful party should be paid by the unsuccessful party should not have been disturbed in relation to the costs of the proceedings in the Court of Appeal.  The general issue of the application of that principle is not in issue.  However, in test cases, as the present cases were, it is not unusual to find special leave to appeal granted on the basis that the applicant will not seek to disturb the orders as to costs already made in the court and appealed from, or orders made to that effect:  CSR Limited v Eddy (2005) 226 CLR 1 at 34 to 36.

No such undertaking was proffered in these cases.  However, given the character of the appeals to this Court as test cases, the absence of an order setting aside the costs orders in the Court of Appeal was not, on its face, the result of an error of the kind suggested by the insurer as attracting the application of rule 3.01.2. 

Another aspect of the insurer’s submissions was that no argument about the costs in the Court of Appeal was put to this Court.  To the extent that that is a complaint about the orders ultimately made in this Court, it does not establish the existence of an error or omission of the kind referred to in rule 3.01.2.

In the present case it would have been appropriate for the insurer to have moved promptly to correct the allegedly erroneous failure to set aside the costs orders in the Court of Appeal.  That there has been a long history of disputation between the parties in relation to the costs in that court subsequently does not explain the insurer’s failure to seek early correction of what it characterises “as an error arising from an accidental slip or omission in the orders made pursuant to the judgment of this Court.”

In my opinion, the absence of an order setting aside the costs orders in the Court of Appeal cannot be judged at this remove in time as an error of the kind covered by rule 3.01.2.  In the event, each summons will be dismissed with costs.  I do not accede to the respondents’ application that there be an order for indemnity costs on the summonses.

Those reasons will be published subject to editing in due course.

Thank you.  The Court will now adjourn.

AT 9.31 AM THE MATTER WAS CONCLUDED