Denham Constuctions Project Company 810 Pty Ltd v Smithies (No 2); Denham Constructions Project Company 810 Pty Ltd v Risgalla (No 2)
[2015] ACTSC 30
•26 February 2015
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | DENHAM CONSTUCTIONS PROJECT COMPANY 810 PTY LTD V SMITHIES (No 2) DENHAM CONSTRUCTIONS PROJECT COMPANY 810 PTY LTD V RISGALLA (No 2) |
Citation: | [2015] ACTSC 30 |
Hearing Date(s): | 10 February 2015 |
DecisionDate: | 26 February 2015 |
Before: | Refshauge J |
Decision: | The parties are given leave to make submissions on the future conduct, if any, of the Appeals. |
Category: | Principal Judgment |
Catchwords: | CIVIL – APPEAL – Pending appeal – Permanent stay – No practical utility in prosecuting the appeal Costs – Set aside previous costs order – Costs of the application in the court below – Issue of costs constitutes a lis pendens between parties |
Legislation Cited: | Building and Construction Industry (Security of Payment) Act 2009 (ACT), ss 26, 27 Supreme Court Act 1933 (ACT), s 9 Court Procedures Rules 2006 (ACT), rr 1163, 6906 |
Cases Cited: | Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 Beitseen v Johnson (1989) 29 IR 336 |
Parties: | Denham Constructions Project Company 810 Pty Ltd (Appellant) Ted Smithies (First Respondent) Stowe Australia Pty Ltd (Second Respondent) |
Parties: | Denham Constructions Project Company 810 Pty Ltd (Plaintiff) Rosemarie Risgalla (First Respondent) Stowe Australia Pty Ltd (Second Respondent) |
Representation: | Counsel Mr S Robertson (Appellants) Mr M Condon and Mr G Blank (Second Respondent) |
| Solicitors Crisp Legal by their Agents Goodman Law (Appellants) No appearance (First Respondents) Hicksons Lawyers (Second Respondents) | |
File Number(s): | SC 217 of 2014 SC 218 of 2014 |
Decision under appeal: | Court/Tribunal: ACT Supreme Court Before: Master Date of Decision: 11 July 2014 Case Title: Denham Constructions Project Company 810 Pty Ltd v Smithies Denham Constructions Project Company 810 Pty Ltd v Risgalli Citation: [2014] ACTSC 167 Court File Number(s): SC 217 of 2014 SC 218 of 2014 |
Refshauge J:
Introduction
The Second Defendant, Stowe Australia Pty Ltd (Stowe), entered into a construction contract with the plaintiff, Denham Constructions Project Company 810 Pty Ltd (Denham 810), for certain works for the BCS Gracewood Aged Care Facility at Griffith, ACT. Further details of the contract and the works are not presently relevant.
On 25 March 2014, Stowe served on Denham 810 two Payment Claims under the Building and Construction Industry (Security of Payment) Act 2009 (ACT) (the SOP Act) for payments of $365,705.50 and $466,390.11 for respectively 25 February 2014 and 25 March 2014.
The Payment Claims were subsequently forwarded to adjudicators under the SOP Act and in due course the adjudicators made decisions. In relation to the first claim (the February Claim), the adjudicator, Rosemarie Risgalla, held Denham 810 to be liable to pay Stowe the sum of $362,925.41 and in relation to the second claim (the March Claim), the adjudicator, Ted Smithies, held Denham 810 to be liable to pay Stowe the sum of $455,713.00.
On 28 May 2014, Denham 810 commenced two proceedings in this Court for judicial review by prerogative relief of each decision of the adjudicators. The proceedings challenging the adjudicator’s decision in respect of the February claim was SC No 218 of 2014 and the proceedings challenging the adjudicator’s decision in respect of the March claim was SC No 217 of 2014. The two proceedings have generally proceeded together.
There are a number of other proceedings in this Court relating to matters concerned with the contract between the parties, but I do not need, in these reasons, to have regard to them.
The proceedings
Denham 810 did not pay the amounts claimed, or any part of them, prior to commencing the proceedings, nor did it seek consent to Stowe refraining from enforcing the decisions of the two adjudicators.
It did not seek orders restraining Stowe from asking for, or obtaining, an adjudication certificate under s 26 of the SOP Act or from filing any such certificate in a court of competent jurisdiction as a judgment for a debt under s 27 of that Act.
There was an issue in the proceedings, with which I am not directly concerned. It appears that to enforce both decisions would lead to double recovery as the adjudicator’s decision on the March Claim included the amount in the February Claim. That will, however, explain some of the issues below.
By Applications in Proceedings dated 20 June 2014, Stowe applied in both proceedings for a stay of the two proceedings until Denham 810 paid into court the sum of $469,211.40, plus interest, for an order that Denham 810 give security for costs for $80,000 for both proceedings and, in the alternative to the payment into court, an order that both proceedings be dismissed.
The applications came before the Master on 1 July 2014. The Court apparently did not deal with the issue of security for costs. I do not need to consider that issue further.
On 11 July 2014, Master Mossop dismissed both applications of Stowe: Denham Constructions Project Company 810 Pty Ltd v Smithies [2014] ACTSC 169 (Denham 810 v Smithies). On 15 July 2014, the Master ordered that Stowe pay the costs of Denham 810. On 18 July 2014, Stowe filed a Notice of Appeal in each matter from the decision of the Master in respect of both cases.
The Appeals came before me on 31 July 2014 when I stayed further proceedings in the actions until the Appeals were heard. Subsequently, I listed the Appeals for hearing on 10 February 2015.
Having obtained the decisions of the adjudicators, and Denham 810 not having paid the sums determined by the adjudicators as payable, Stowe then sought and obtained an adjudication certificate from each adjudicator under s 26 of the SOP Act and, under s 27, filed them in this Court, where they were registered on 28 May 2014. They thereupon became enforceable as a judgment debt in any court of competent jurisdiction.
As I have noted above (at [7]), no orders were sought by Denham 810 or made by any court restraining Stowe from registering the adjudication certificates in this (or any other) Court, nor any order sought or made restraining Stowe from enforcing the amounts determined by the adjudicators as payable under their determinations.
On 19 June 2014, Stowe is said to have had “judgment ... entered in the NSW District Court” as a result of the registration of the adjudicator’s certificate in this Court. On 18 July 2014, examination notices were issued from that Court under its rules, but no documents were produced. It appears no further action was taken in those proceedings.
In any event, further enforcement proceedings were taken in this Court. There were some interlocutory skirmishes, with which I do not need to deal, and, on 23 October 2014, an officer of Denham 810 was examined under oath.
Application
On 4 February 2015, Stowe filed further Applications in Proceedings returnable on the hearing of the Appeals. In them, Stowe sought that the Appeals be permanently stayed and that Denham 810 pay the costs of the Applications in Proceedings of 20 June 2014 so far as they related to the orders sought for a stay pending payment into court, or alternatively, the dismissal of the actions.
The affidavit of a solicitor employed by Stowe set out events in the proceedings which explained the reasons for the Application.
After setting out the history of the proceedings, the affidavit set out that, on 8 December 2014, Denham 810 had paid $520,140.98 to Stowe, comprising:
(a) $490,441.05 in satisfaction of the Second Judgment Order (SC339 of 2014) being the amount with interest recoverable under the adjudication of the March Claim;
(b) $11,199.93 for interest accrued; and
(c) $18,500 for part of Stowe’s cost of the enforcement proceedings.
The hearing of the Appeals
When the Appeals came on for hearing, Mr S Robertson, who appeared for Stowe, informed me that Stowe no longer wished – or needed – to prosecute the Appeals because of the payment by Denham 810 which, in the affidavit, had been described, perhaps rather boldly, as a “[c]apitulation”.
Instead, he sought the following orders in each Appeal:
(a) that the appeals be permanently stayed;
(b) that each party pay its own costs; and
(c) that Denham 810 pay Stowe’s costs of the hearing before the Master from which the Appeals had been taken.
Mr M Condon SC, who appeared with Mr G Blank for Denham 810, consented to orders (a) and (b) but opposed order (c), which I will call “the costs below order”.
It appears that a permanent stay, rather than a dismissal, was sought because Stowe did not wish any implication to be drawn that it no longer considered that the orders of the Master were wrong in law. I am by no means sure that the consent dismissal of the Appeals would be susceptible to that inference, but there was no reason why I should not enter the orders sought by the consent of both parties.
That left only the costs below order for consideration.
The Costs Below Order
Mr Robertson submitted that, in making the order for a permanent stay, I had power to make a different order for the costs of the proceedings before the Master if the justice of the case required.
He submitted that I had power to make such an order despite not hearing the appeal on its merits, nor finding error in the exercise of the Master’s power when making the costs order that he did. He referred to two bases for this submission: statute and authority.
He relied on s 9 of the Supreme Court Act 1933 (ACT) which provided in s 9(2)(a) for appeals from interlocutory orders of the Master and then in s 9(4) provided:
(4)On an appeal under subsection (2)(a), the court may confirm, amend or set aside the order of the master and may make any order that in all the circumstances it considers just.
It was, Mr Robertson, submitted, just for the court to set aside the costs orders made by the Master as, despite resisting the substantive orders, Denham 810 had paid to it the claimed sum.
He also referred to authority, namely Long v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 438 (Long’s Case).
At the hearing of the Appeals, I expressed the view that Long’s Case appeared to be authority for the proposition that an appellate court could stay an appeal but decide, nevertheless, to interfere with the costs order made by the Court from whom the appeal was taken. I am no longer certain that it is authority for that proposition, at least not as widely as it is stated and not applicable to these circumstances.
With the greatest respect to the very distinguished members of the court that decided Long’s Case, it is not easy to see what they actually decided in this respect and, if they did so decide the case by applying the asserted proposition, they did not articulate the asserted proposition nor give any reasons or cite any authority or principle for the decision they made.
The position in that case was that in a decision made at first instance the primary court refused to make certain interlocutory restraining orders. There is no reference to what, if any, costs order was then made by the primary court. The plaintiff appealed and, at the hearing of the appeal, the appellate court considered that, instead of pursuing the appeal, it was preferable for the appellant (plaintiff) to seek a mandatory interlocutory injunction against the defendant. The appeal was adjourned to allow that to be done and costs were reserved.
At the hearing for the application for a mandatory injunction, the Court (differently constituted) listed the substantive application for hearing, rather than hearing that application, and, after that hearing, dismissed the substantive application. The plaintiff appealed that decision.
When the first appellate Court resumed the hearing of the original appeal, it declined to hear the new appeal at the same time. It also declined to hear the original appeal further as it held that it was, despite the contrary contention of the plaintiff, moot.
This was based on the discretion of the court, where the Court said at [17]-[18], referring to Hope Downs Management Services Pty Ltd v Hamersley Iron Pty Ltd (2000) ATPR 41-733:
Competing contentions about residual costs issues did not deter the Full Court in Hope Downs from permanently staying the appeal in that matter. We consider that the same course should be taken in this matter.
We do not believe that live issues in respect of costs should result in an otherwise moot appeal proceeding to full hearing and determination.
Despite this, the Court did make an order that disposed of the costs of the hearing before the primary judge in a way that appears to have contemplated the possibility of a different order being made from the order below.
The reasoning was as follows. The Court noted that the only live issue was the costs of the appeal and the costs before the primary Court. It was, I have to say, not clear to me what was the costs order before the primary judge or the basis on which it could be challenged.
The Court held that there were “special and unusual circumstances surrounding this appeal” and considered that neither party should be liable for the costs of the appeal. Accordingly, it permanently stayed the appeal and made no order as to costs. That coincided with the decision on the hearing of the substantive proceedings.
The Court then dealt with the question of costs before the primary judge. It did not explain why it made the decision it did, but it ordered that the costs of the proceedings before the primary judge be costs in the second appeal.
I can only assume that their Honours must have reasoned that if the second appeal (the appeal against dismissal of the substantive application) were upheld then it was appropriate that the interlocutory restraining orders sought by the plaintiff should have been made and so the plaintiff should have those costs, or, alternatively, those costs should be considered part of the costs of the proceedings as a whole.
If, however, the plaintiff failed in the second appeals, the costs before the primary judge should abide the costs order of the appeal.
I have no certainty about that reasoning, but it seems to me that the decision provides no assistance to me in this case. It is a decision which articulates no principle nor sets out the reasoning as to why the court could order as it did. In my view, the case was a quite special one and the decision on this aspect should be confined to its facts.
If, however, Long’s Case is taken to be an authority that permits a court to dismiss or permanently stay proceedings and yet at the same time interfere with a costs order of the primary judge, then I respectfully decline to follow it, as it seems to me to be wrong in principle and contrary to authority.
Dismissing Appeals and Costs Below Orders
There is no doubt that a decision of a superior court, such as this court, is final unless set aside on appeal, a principle, as pointed out in New South Wales v Kable (1913) 87 ALJR 737 at 746; [32], that has been firmly established in a number of cases.
It is also firmly established that such a judicial decision, otherwise final, is not the less so because it is appealable, as stated by Lord Herschell in Nouvion v Freeman (1889) 15 App Cas 1 at 10-11 and by Cozens-Hardy LJ in Marchioness of Huntley v Gaskell [1905] Ch D 656 at 667 and as held in Colt Industries Inc v Sarlie (No 2) [1966] 1 WLR 1287. It is also established that the decision of such a court remains final while under appeal and only ceases to be so if the appeal is upheld. This was established as long ago as 1839 in Doe d Tatham v Wright (1839) 10 Ad & El 763 at 783; 113 ER 289 at 297. See also Harris v Willis (1855) 15 CB 710; 139 ER 604; and Scott v Pilkington (1862) 2 B &S 11 at 41; 121 ER 978 at 989.
The fact of the pendency of the appeal then becomes an essential element in the capacity this Court, as an appellate court, to interfere with or change a decision of this Court constituted by the Master. An order of a court can only be changed on appeal, other than by specifically legislated provisions such as the slip rule (r 6906 of the Court Procedures Rules 2006 (ACT)) or the inherent jurisdiction of a court to recall a decision before it is perfected (Burrell v The Queen (2008) 238 CLR 218 at 224, 247). In the appeal, the decision of the primary court may be altered by consent under certain circumstances: Foote v Dixon (2013) 8 ACTLR 65. Otherwise, the court must hear the appeal in order to interfere with the decision of the primary court.
In this case both parties seek to have the appeal permanently stayed. Stowe, however, wishes to have one of the orders of the Master altered, namely the costs order. Denham 810 does not consent.
Stowe’s argument runs, it appears, that the appeal is now moot since Denham 810 has paid the moneys the subject of the adjudicator’s decision. As a result, there is no utility in prosecuting the appeal.
That Denham 810 paid the moneys, however, means that Stowe has achieved the objective it sought in its applications before the Master. The decisions as to costs, therefore, must now be seen to be unjust as Denham 810 has provided what Stowe sought and so the costs orders should be set aside, even though I am not hearing the appeal.
It is this approach which Stowe seeks to justify by reliance on Long’s Case and s 9(4) of the Supreme Court Act.
My attention was also drawn to the well-known authority of Re Minister for Immigration and Ethnic affairs; Ex parte Lai Quin (1997) 186 CLR 622 (Lai Quin) where McHugh J set out principles as to costs where proceedings are not pursued because they become moot, in that case because of a subsequent decision of the respondent, said to be on changed circumstances.
His Honour set out some principles which are regularly followed. See also Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201.
These principles, however, are of little assistance here, for they deal with the costs of the proceedings before me, not the costs before the Master. In these proceedings, that is the appeal, Stowe sought that each party pay its own costs of the appeal. There is no occasion then to have recourse to the principles in Lai Quin. Stowe did change that position in the course of argument, however, and I will deal with that below.
The authorities are clear that, where an appeal is moot, that is where there is no lis pendens between the parties, the Court can and, indeed probably should, decline to hear the appeal. As the Full Court of the Supreme Court of Victoria stated in Swift Australia Co (Pty) Ltd v South British Insurance Co Ltd [1970] VR 368 at 367, relying on high authority:
the courts will not advise parties to actions upon their rights under a hypothetical state of facts; or give them advisory opinions or give hypothetical decisions the effectiveness of which depends on varied states of facts which remain to be determined in the future.
See also Gardner v The Dairy Industry Authority of New South Wales (1978) 52 ALJR 180 at 188, 189.
It is sometimes stated that an appeal will be dismissed or stayed where it has no practical utility.
As the Court said in Hope Downs Management Services Pty Ltd v Hamersley Iron Pty Ltd at 40,504; [15]:
In these circumstances the appeals should be stayed. The Court should not, of course, be taken to have expressed any view about the correctness or otherwise of the judgment appealed from; the appeals have been stayed for reasons unconnected with their merits.
The courts have identified a number of circumstances where an appeal should be stayed or dismissed because it has no practical utility. Thus, in Sun Life Assurance Company of Canada v Jervis [1944] AC 111, the House of Lords had to consider an appeal where the appellant had undertaken to pay the costs of the appeal on a solicitor and client basis in any event and also not to seek repayment of the judgment sum which it had paid under the judgment the subject of the appeal. Viscount Simonds LC said at 113:
The difficulty is that the terms put on the appellants by the Court of Appeal are such as to make it a matter of complete indifference to the respondent whether the appellants win or lose. The respondent will be in exactly the same position in either case. He has nothing to fight for, because he has already got everything that he can possibly get, however the appeal turns out, and cannot be deprived of it. I do not think that it would be a proper exercise of the authority which this House possesses to hear appeals if it occupies time in this case in deciding an academic question, the answer to which cannot affect the respondent in any way. If the House undertook to do so, it would not be deciding an existing lis between the parties who are before it, but would merely be expressing its view on a legal conundrum which the appellant which the appellants hope to get decided in their favour without in any way affecting the position between the parties ...
A similar position applied in Hole v Insurance Commissioner [1962] VR 394, where the Full Court of the Supreme Court of Victoria declined to hear an appeal as the judgment sum had been paid and the parties agreed that it would not be repaid, or a retrial sought, if the appeal should succeed. Similarly, in Cadbury-Fry-Pascall Pty Ltd v Federal Commissioner of Taxation (1944) 70 CLR 362 at 386.
See also Harrington v Rich (2008) 166 FCR 440, Secretary to the Department ofHuman Services v Magistrates Court of Melbourne (2002) 6 VR 140 at 147-8; Beitseen v Johnson (1989) 29 IR 336 at 338; Mayne Nickless Ltd v Transport Workers Union of Australia (Unreported, Federal Court of Australia, Black CJ, Von Doussa and Carr JJ, VG 32 of 1998, 16 July 1998); Shire of Yarra Ranges v Russell (2009) 25 VR 560.
What Mr Robertson sought, however, was that the proceedings be stayed permanently but that I should nevertheless interfere with the order for costs made by the Master by setting it aside and making a different order.
There is an inconsistency in this, for, if the proceedings are stayed, then no order can be made in reliance on the proceedings save, of course, the costs of the proceedings themselves. That is to say, if the appeals are no longer alive, then they cannot provide any jurisdiction to interfere with the order of the Master, relevantly a final order.
There is, however, authority on this issue, though neither party drew my attention to it. In Leibler v Air New Zealand Ltd [1998] 2 VR 525, the Victorian Court of Appeal considered an appeal from a decision of the primary judge rectifying what was called a shareholders’ agreement.
Subsequent to the hearing of the appeal, the parties entered into an agreement for sale and transfer to the plaintiffs of the defendant’s shares with the result that the plaintiffs could, at least on one view, command all the issued capital of the relevant company without limitation. As a result, the defendants had no further interest in the shareholders’ agreement.
The plaintiffs, as respondents, then sought dismissal or striking out of the appeal without a hearing on the merits. The Court dismissed the application.
That application had been opposed by the defendants, as appellants, on the ground that the costs orders of the primary judge remained outstanding and unsatisfied, orders which the defendants, as appellants, sought to have set aside and, in lieu of the order that the defendants pay the plaintiffs costs, an order that the plaintiffs pay the defendants costs be substituted.
The Court held that the fact that the issue of costs remained a live issue constituted a sufficient lis between the parties to warrant the determination of the appeal. Phillips JA, with whom Winneke P and Kenny JA agreed, said at 529-30:
It appears to be well established that, so long as the appeal will have direct consequences for the parties, even if it only be in respect of existing orders for costs, there is controversy enough to sustain the appeal: see Elders Pastoral Ltd v Bank of New Zealand [1990] 1 WLR 1090 at 1095, Westminster County Council v Crovalgrange Ltd [1986] 1 WLR 674 at 678, National Coal Board v Ridgeway [1987] 3 All ER 582 at 593-4, 604, compare at 588-589, Ainsbury v Millington [1987] 1 WLR 379 at 381 and (in Australia) Veloudos v Young (1981) 56 FLR 182 at l86, 192, compare at 191. It is enough in this respect to quote from the opinion of the Judicial Committee in Elders Pastoral at 1095:-
It appears from the authorities that even if the only effect of a successful appeal between the parties will be to reverse an order for costs made in the courts below, there remains a lis or issue between the parties.
Contrast Sun Life Assurance Co v Jervis [1944] AC 111, where the conditions attached to leave to appeal were such as to destroy any interest at all in the respondent in the outcome of the litigation (including costs) with the result that there was no lis left; the litigation had become wholly academic. So too the dispute had become wholly academic in Hole v Insurance Commissioner [1962] VR 394, once the judgment below for $300 and costs had been paid and it was agreed that the sums paid were not to be repaid in any event. (See and compare FCT v David Jones (1991) 29 ATR 397 at 399 where the High Court declined to grant special leave to appeal when all that remained was a question of the Commissioner's costs below.)
The more troubling aspect is whether, there being still a lis sufficient to sustain the appeal's continuance, this Court is therefore, and on that account alone, bound to continue with the hearing and determination of the appeal. In Elders Pastoral the Privy Council expressed the view that in such circumstances it still retained a discretion in the matter. Shortly after what is quoted above, their Lordships added (at 1095):-
Where leave is unnecessary or has been obtained and subsequently the dispute between the parties is reduced to a dispute over costs the appeal remains competent but the Judicial Committee retains a discretion to decline to entertain the appeal if the only effect of success will be to reverse an order for costs; and as a general rule the Judicial Committee will be minded not to entertain the appeal: see Credit Foncier of Mauritius v Paturau (1876) 35 LT (NS) 869.
In Elders Pastoral, as it happened, the Privy Council did not decline to hear the appeal. That was because the appellant had played no part in those subsequent events (namely payment of the judgment debt and an offer of interest) which were relied upon by the respondent as serving to abort the appeal; nor indeed had those subsequent events dealt with outstanding costs.
At 532, his Honour continued:
In the end it is unnecessary to decide how far this court retains a discretion to decline to hear an appeal in the circumstances just mentioned. For what it is worth, I incline to the view, as at present advised, that this Court, which is a final court of appeal save to the extent that the High Court grants special leave, must retain a discretion to decline to proceed with the hearing of any appeal if the justice of the case so requires; and this is not the case to decide that the justice of the case cannot so require where, to use the Privy Council's words in Elders Pastoral, "leave is unnecessary or has been obtained and subsequently the dispute between the parties is reduced to a dispute over costs". I say that that need not be decided because, even if we had such a discretion, I would not be prepared to exercise it adversely to the defendants, the present appellants, in the particular circumstances of this case.
That the question of costs is sufficient to constitute a live controversy such as to sustain an appeal is now well-established in Australia. See, for example, Commissioner of Taxation v Industrial Equity Ltd (2000) 98 FCR 537; NZI Insurance Australia Ltd v Baryzcka (2002) 85 SASR 482; NZI Insurance Australia Ltd v Baryzcka (2003) 85 SASR 497; South Australia v Lampard-Trevorrow [2008] SASC 370.
That leaves the position in this case as follows. If Stowe wishes to agitate the question of the order for costs made by the Master, then it may only do so if the appeal remains on foot. It cannot do so if the appeal is permanently stayed or dismissed.
The question of costs is sufficiently a live issue to justify an appeal remaining on foot and being heard and determined, even if the substance of the appeal is otherwise no longer a live issue, if the subject matter of the appeal is otherwise moot. In those circumstances, the court retains a discretion, however, not to proceed with the appeal. Factors that will be relevant to that question include the significance of the amount of the costs and whether the appellant played any and, if so, what, part in the subject matter of the appeal, other than costs, ceasing to be a live issue in the proceedings.
These factors would favour the continuation of this appeal, for the reason that the appeal is said to be moot is the unilateral payment by Denham 810 to Stowe of the amount, plus interest, determined by the relevant adjudicator and, as I was advised at the hearing, the costs were a substantial amount, I noted that I was told in the order of $10,000.
On the other hand, Stowe gave no indication of wishing to proceed with the appeal and Denham 810 consented to that course of action. I do not know whether these can be said to be an agreement of a contractual nature to this. As I indicated above, however, neither party addressed what I consider to be the correct legal position as I have determined it.
This seems also to answer the reliance that Mr Robertson placed on s 9(4) of the Supreme Court Act. That provision is only applicable to an appeal that is alive. Once dismissed or permanently stayed without a hearing on the merits, there is no occasion for the court to make any order which interferes with a decision of the court below. That subsection gives no jurisdiction to make an order, other than in respect of the appeal proceedings, unless the appeal is heard on the merits or, in certain circumstances, by consent of the parties.
Conclusion on Jurisdiction to consider the Costs Below Order
In those circumstances, it seems to me that the parties should have an opportunity to make any further submissions or take any further action that they may be advised of in the light of these reasons.
For this reason, I have directed in chambers that the orders I made in respect of these appeals should not be perfected until further order. That will permit the parties to seek that I recall the orders and, for example, if so persuaded, permit the appeal to be prosecuted in order to determine the issue as to costs. As explained in Burrell v The Queen at 224, once the formal order of the court is perfected, then the court’s power to reconsider the matter is at an end. That a court has power before that time to reconsider the decision or vary any judgment or order is a principle of long standing: Re St Nazaire Co (1879) 12 Ch D 88 at 91; Harvey v Phillips (1956) 95 CLR 235 at 242; Permanent Trustee Co (Canberra) Pty Ltd Executor of the Estate of Andrews v Stocks & Holdings (Canberra) Pty Ltd (1976) 15 ACTR 45 at 47-8.
In order to assist the parties, however, I should make some further remarks, though they may be regarded as somewhat provisional for I have not had the benefit of counsel’s submissions on the precise issue to which they are addressed.
From a pragmatic point of view (cf Pearce v The Queen (1998) 194 CLR 610 at 623-4; [45]), the payment of the claimed funds may have leached away any interest that Stowe had in the appeal, but there was, in reality, only an indirect connection between the appeal and the payment. Stowe argued before the Master that the proceedings before the Court should be dismissed as an abuse of process because it was, by taking proceedings for prerogative relief, circumventing the requirement in the SOP Act that if it sought to set aside the judgment in court, it must, under s 27(4)(b) of the SOP Act, bring into court, as a security, the unpaid part of the adjudicated sum. The Master held that there was no abuse of process. See Denham 810 v Smithies at [49].
The payment to Stowe (not, I observe, into court) does not render that finding moot. Indeed, it may be argued to be irrelevant to it. It is also, and perhaps more, consistent with the fact that, in the absence of a stay, Stowe was able to enforce the adjudicated sum in the adjudication certificate as registered in the Court and, indeed, was vigorously doing so. The payment was at least equally consistent, if not more so, with a desire by Denham 810 to bring those enforcement proceedings to an end.
While described by Stowe as a “capitulation” in a filed affidavit and oral submissions to me, it was not an act inconsistent with Denham 810 continuing to contend that the decision of the Master in Denham 810 v Smithies was correct.
Importantly, the principal proceedings were not dismissed. They are continuing and are being intensively case managed. It may be that if Denham 810 is successful in the proceedings, Stowe will be required to repay the sum that Denham 810 has paid. I do not know enough of the details to do more than speculate on that.
While Stowe clearly wished to receive for itself the payment that Denham 810 made, the issue decided by the Master was by no means directed to that. On no view of the application made by Stowe could that have been an order which the Master could have made.
That does not, of course, mean that the payment of the sum by Denham 810 had no definitive effect on the utility of the appeal. That is rather a complex question which depends on whether a proceeding for prerogative relief, as opposed to an application to set aside the judgment constituted by the registration of the adjudication certificates, where there is no amount payable under s 27(4)(b) of the SOP Act, is still an abuse of process or whether such a proceeding is only an abuse of process where such an amount still payable.
There were, also, other matters agitated by Stowe before the Master which the payment does not resolve, namely whether there was utility in the earlier of the proceedings, as the later proceedings were in respect of an adjudication certificate which included an amount already included in the earlier certificate, and whether there was an estoppel constituted by registration of such certificates. These are important issues, but forensically, having received payment, Stowe may have lost any interest in agitating them.
Stowe’s Alternative Submission
Stowe made one other submission with which I should deal. Stowe submitted that, were I to find that I could not set aside the order of the Master as to costs, I should then order that Denham 810 should bear the costs of the Appeals. This, it was submitted, would be fair, given it was the payment, relatively close to the hearing of the Appeals, which had rendered them moot.
This does raise the principles set out in Lai Quin. A court should, as Hill J pointed out in Australian Securities Commission v Aust Home Investments Ltd at 143, be ready to facilitate the conclusion of proceedings where neither party wishes to proceed with them. A moving party who discontinues proceedings, however, will ordinarily be required to pay the other party’s costs as required by r 1163 of the Court Procedures Rules. Nevertheless, as McHugh J pointed out in Lai Quin at 624-5, in an appropriate case, a court may still make an order for costs when there has been no hearing on the merits and the moving party no longer wishes to proceed, such as where the court concludes that one of the parties has acted so unreasonably that the other party should obtain the costs of the action or where the moving party had no reasonable alternative but to commence the proceedings.
Neither position applies here. If I am correct that the continuation of the enforcement proceedings was, or was more likely, to have been the motivation for the payment by Denham 810, then it has neither acted unreasonably nor required Stowe to commence the Appeals to obtain payment. Denham 810 would, by non-payment, only encourage Stowe to pursue enforcement vigorously.
Another point made by McHugh J in Lai Quin at 625, is that a court may make an order to the payment of the costs of a party where it can be satisfied that that party was almost certain to have succeeded if the matter were to have been fully tried. That is not the situation here.
That then leaves the following comment by McHugh J in Lai Quin at 625 as follows:
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.
This seems to me to describe the situation here quite accurately. Accordingly, there is no reason why I should make an order for costs of the appeal in favour of Stowe. The order originally proposed by Stowe, that each party pay its own costs (equivalent to there being no order as to costs as pointed out by Lopes LJ in In re Hodgkinson-Hodgkinson v Hodgkinson [1895] 2 Ch D 190 at 194), is the appropriate order.
Conclusion
For the reasons I have already given, I do not consider that, in the circumstances of the appeals, the payment by Denham 810 constituted unreasonable behaviour such as to require it to pay Stowe’s costs of the appeal, even though Stowe may now consider that it has achieved what it set out to gain by the applications that were made to the Master.
I will give each party an opportunity to make submissions on the future conduct, if any, of the Appeals. If Stowe does not seek to have the order permanently staying the Appeals withdrawn, and does not seek to have the Appeals heard so as further to challenge the costs orders made by the Master, I shall confirm the orders that the appeals be permanently stayed, order that each party pay its own costs and dismiss the oral application by Stowe to have the orders for costs of the Master of 15 July 2014 set aside.
If the submissions I seek require an oral hearing, either because either party seeks it or I consider it necessary after reading the submissions, I shall arrange for that at a date as suitable but as proximate as possible.
| I certify that the preceding ninety-three [93] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Refshauge. Associate: Date: 2015 |
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