Deputy Commissioner of Taxation v Meredith (No 2)

[2008] NSWCA 133

Reported Decision: 75 NSWLR 46272 ATR 425[2009] ALMD 5122

New South Wales

Court of Appeal

CITATION:	DEPUTY COMMISSIONER OF TAXATION v MEREDITH (NO 2) [2008] NSWCA 133
HEARING DATE(S):	On written submissions
JUDGMENT DATE:	10 June 2008
JUDGMENT OF:	Giles JA at 1; Ipp JA at 2; Basten JA at 3
DECISION:	(1) Motion dismissed. (2) Respondent to pay the Commissioner’s costs of the motion.

CATCHWORDS:	PROCEDURE – Entry of judgment and orders – procedure for entry of judgment and orders under former Supreme Court Rules 1970 (NSW) and under Uniform Civil Procedure Rules 2005 (NSW) – entry of judgment and orders on computerised court record system – Uniform Civil Procedure Rules 2005 (NSW) r 36.11 - PROCEDURE – Variation of order following entry of judgment – general law principles relating to variation of orders – statutory authority to reopen entered orders – time limits on variation – Uniform Civil Procedure Rules 2005 (NSW) r 36.16
LEGISLATION CITED:	Supreme Court Rules 1970 (NSW), Part 40, r 9, Part 41, rr 9, 13 Uniform Civil Procedure Rules 2005 (NSW), rr 36.11, 36.16, 36.17
CASES CITED:	Bailey v Marinoff [1971] HCA 49; 125 CLR 529 DJL v Central Authority [2000] HCA 17; 201 CLR 226 Gamser v Nominal Defendant [1977] HCA 7; 136 CLR 145 Harrison v Schipp [2002] NSWCA 78; 54 NSWLR 612 Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21 King v Goussetis (1986) 5 NSWLR 89 Wade v Burns [1966] HCA 35; 115 CLR 537
PARTIES:	Deputy Commissioner of Taxation - Claimant Lynnette Anne Meredith - Opponent
FILE NUMBER(S):	CA 40251/07
COUNSEL:	D J Fagan SC/D Liebhold - Claimant G Segal - Opponent
SOLICITORS:	Australian Government Solicitor - Claimant Forbes-Smith and Company - Opponent

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 2613/05
LOWER COURT JUDICIAL OFFICER:	Quirk DCJ
LOWER COURT DATE OF DECISION:	27 October 2006

CA 40251/07
DC 2613/05

GILES JA
IPP JA
BASTEN JA

10 June 2008

DEPUTY COMMISSIONER OF TAXATION v MEREDITH (No. 2)

Judgment

1 GILES JA: I would have dismissed the appeal, and the respondent’s application has no significance to the orders I proposed. However, I agree that there is no power to vary the costs order made in accordance with the majority opinion.

2 IPP JA: I agree with Basten JA.

3 BASTEN JA: Judgment in the appeal in this matter was delivered on 10 December 2007. The appellant Deputy Commissioner (“the Commissioner”) was granted leave to appeal, the appeal was allowed and the judgment and orders of the District Court were set aside. The orders set aside included the costs orders in favour of Ms Meredith (“the respondent”) made by the trial judge on 27 October 2006. In its place, she was ordered to pay the Commissioner’s costs in the District Court, other than with respect to cost orders made prior to the date of judgment in the District Court. She was also ordered to pay the Commissioner’s costs in this Court, but was granted a certificate under the Suitors’ Fund Act 1951 (NSW) in respect of the appeal. The judgment contained no liberty to either party to apply for a variation of the orders, nor was such liberty then sought.

4 On 25 March 2008, a notice of motion was filed on behalf of the respondent seeking leave to make further submissions on the question of costs and seeking a variation of the orders made by this Court in respect of the order for costs of the proceedings in the District Court. The effect of the proposed variation would be to allow her to retain the favourable costs order obtained in the District Court on 27 October 2006. The basis for that proposal was that the Commissioner had succeeded on appeal for reasons which were not presented in argument to the District Court.

5 The possibility that the Commissioner might succeed on the basis ultimately upheld in this Court, but not in terms put below, was addressed in the course of argument. The presiding judge expressly raised the possibility that success on that basis might have costs consequences. Counsel for the respondent acknowledged that possibility, but made no application or submission in respect of costs which might be awarded in that event, either at the time it was raised by the Court or at any other time during the hearing of the appeal. Nor was any issue raised on behalf of the respondent on the delivery of judgment. (It may be noted that success on a new point will not necessarily lead to departure from the usual order as to costs: see, eg, Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21 at [29]-[31] and orders at [124].)

6 In Bailey v Marinoff [1971] HCA 49; 125 CLR 529 at 530, Barwick CJ stated, in relation to this Court:

“Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed.”

7 As explained in DJL v Central Authority [2000] HCA 17; 201 CLR 226 in relation to the Family Court, subject to limited exceptions, one being in relation to fraud, that principle continues to operate: at [50]; see also Gamser v Nominal Defendant [1977] HCA 7; 136 CLR 145 and Harrison v Schipp [2002] NSWCA 78; 54 NSWLR 612 at [2]-[4] (Handley JA) and [138]-[140] (Giles JA) and [216] (Ipp AJA). Accordingly, the power of this Court to entertain the present application depends upon two questions; first, whether the orders were entered prior to the application to vary them and, secondly, if so, whether there is some statutory authority conferring power on this Court to reopen entered orders.

Entry of orders

8 Until recently, the entry of orders required that a party to the proceedings take steps to draw up a minute of the orders indicated in the Court’s judgment, which was then filed with the Registry of the Court and signed by the Registrar. The order was entered when the minute was sealed by the Registrar: see, eg, former Part 41, r 13(2), Supreme Court Rules 1970 (NSW). Under that procedure, the other parties received notice of the application for entry of orders by service of the draft minute and, perhaps only in rare cases, the parties attended upon the Registrar to settle the terms of the draft minute of order. Until the order was entered by the Registrar sealing the signed minute, the Court had power to review the orders: Part 41, r 9. Further, the Court had power to set aside or vary a judgment where a notice of motion seeking such setting aside or variation was filed before the judgment was entered: Part 40, r 9.

9 Entry of judgments and orders in this Court now occurs under the relevant provisions of the Uniform Civil Procedure Rules 2005 (NSW) (“the UCPR”). Rule 36.11 relevantly provides:

“ 36.11 Entry of judgments and orders
(1) Any judgment or order of the court is to be entered.
(2) Unless the court orders otherwise, a judgment or order is taken to be entered:
(a) in the case of a court that uses a computerised court record system, when it is recorded in that system, or
(b) in any other case, when it is recorded, in accordance with the practice of the court, as having been entered.”

10 This Court is a court which uses “a computerised court record system”. The Court records indicate that the orders were entered on 10 December 2007, namely the day judgment was delivered.

11 This system is no doubt intended to achieve a degree of administrative simplicity and certainty, without imposing unnecessary costs on parties or the Court. Nevertheless, it has its limitations. First, there is nothing in the UCPR to identify this Court (or any other court) as a court which “uses a computerised court record system”. (Transparency demands that the UCPR should identify that fact so that litigants may know which limb of r 36.11(2) operates in relation to their proceedings, but presently the UCPR do not.)

12 Secondly, orders will be entered without reference to the parties. The opportunity afforded under the old system for parties to check the form of the orders proposed by the Court, which often will not conform precisely to the orders sought in the pleadings or the written submissions filed in the proceedings, is now lost. Further, there is no provision for the parties to be provided automatically with copies of the orders as entered.

13 If general law principles were to apply, there would be limited grounds upon which a judgment or orders could be varied after the day on which judgment was delivered. No doubt in recognition of that difficulty, r 36.16 now provides:

“ 36.16 Further power to set aside or vary judgment or order
(1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.
…
(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.
(3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered.
(3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B).”

14 Other grounds for setting aside or varying orders are traditional grounds, namely that there is a default judgment, that judgment is given or made in the absence of a party, or is an interlocutory judgment or order: r 36.16(2) and (3). Variation can also occur under the “slip rule”, now found in r 36.17. There is no suggestion in the present proceeding that any of the specific grounds for setting aside or varying the order are sought to be invoked.

Availability of power

15 The clear purpose of the rules set out above is to allow a window of 14 days after entry of judgment, in courts where entry takes place automatically and largely contemporaneously with the delivery of judgment. The removal of the power to extend the 14-day period makes it sufficiently clear that the intention is that the period is not variable, but reflects the need for judgments and orders to be final and certain as to their operation.

16 It is not open to this Court to arrogate to itself some inherent power, absent statutory authority, which is denied by the judgments of the High Court in Bailey v Marinoff, Gamser and DJL. Kirby J, in DJL, was attracted to the dissenting views of Gibbs J in Gamser: at [98]-[100]. His Honour referred to the power as being desirable “in wholly exceptional circumstances”: at [100]. The reasons for providing such a power in relation to the decisions of intermediate appellate courts are reflected in his Honour’s reasoning at [96]-[108]. Those views were expressed long before the introduction of the UCPR: it is clear that they have not persuaded the legislature or the rule-makers to adopt a broader power of intervention. Accordingly, they do not require further consideration by this Court.

Matters raised on motion

17 As noted above, the notice of motion seeking variation of the orders made on 10 December 2007 was not filed until 25 March 2008. It would appear that time to file the motion expired on 24 December 2007, a day when the Registry was open. Thereafter, the Registry was open on all days except weekends and public holidays, from 27 December 2007.

18 If delay had been an issue going to the exercise of a discretionary power, it would no doubt have been considered appropriate to take account of the fact that the respondent advised the Commissioner by letter dated 21 December 2007 that she proposed to seek a variation of the costs order. A further letter was sent on 19 February 2008. That evidence, contained in an affidavit of the solicitor for the respondent, might be thought somewhat ambivalent in its effect. It records that counsel, having considered the orders made on 10 December 2007, advised on 17 December that the costs order was “inappropriate” and that a notice of motion “should be filed”. There is no explanation as to why that was not done on or before 24 December, nor as to why, apart from commitments of counsel, the solicitors did not take the step of filing the motion until 25 March 2008. The evidence does not reveal whether the solicitor was aware of or concerned about, the time limits imposed by the rules, or neither.

19 A second matter which might have affected the exercise of any discretion to extend time or reopen the orders, if either power were available, would be the basis upon which the order was sought to be varied. The notice of motion sought an order which, in effect, made no complaint about the order with respect to the costs of the appeal, but sought to have the applicant’s order that the Commissioner pay her costs of the trial left undisturbed. The basis for that proposal, as revealed by written submissions filed on 22 April 2008, was that the Commissioner was successful on a basis not agitated at trial. That the applicant was at risk in that regard became apparent during the course of the hearing. Early in the submissions of counsel for the respondent, it was noted that “the argument now put as the first of my friend’s levels of argument was not something considered in the court below and not one advanced in the court below”: CA Tcpt, 06/11/07, p 21(20). In response, the presiding judge inquired what counsel sought to make of that fact, as the matter raised was a pure point of law. Counsel did not suggest otherwise but submitted that it might be a basis for declining leave: CA Tcpt, p 21(40). The presiding judge then added (line 45):

“It could also mean, and I simply put this on the table for Mr Fagan, that if the point is taken on board and it succeeds, there might be some costs consequences.”

20 Mr Fagan was appearing for the Commissioner: the point was clearly put on the basis that it might be a matter for his consideration because, had it been contended that the usual order for costs should not follow from success on the part of the Commissioner, such a result would be adverse to his client’s interests. However, counsel for the respondent passed on, without comment, to his next point. No application was made by him for any special costs order, either at that stage or at any other stage during the hearing of the appeal. So far as the Court was concerned, the application for a different order was first raised on 25 March 2008.

21 Finally, it should be noted that no reference was made to the basis on which the Court’s power to vary its orders was sought to be invoked in the written submissions in support of the motion. Submissions for the Commissioner filed on 30 April 2008 did raise the issue of power, referring to the UCPR, rr 36.11 and 36.16, and the decision of the High Court in DJL. In particular it was noted that the respondent had not suggested that any of the exceptions to the general rule were engaged. There was no reply from the respondent to these submissions.

22 There are serious risks in a judicial officer seeking to determine how he or she would have exercised a discretion, having determined that the power did not exist: see, eg, in relation to a mining warden, Wade v Burns [1966] HCA 35; 115 CLR 537 at 555 (Barwick CJ), 563 (Menzies J) and 568 (Owen J); and in relation to a judge of the Land and Environment Court, King v Goussetis (1986) 5 NSWLR 89 at 94-95 (McHugh JA, Kirby P and Hope JA agreeing). Particularly is that so when the nature of the discretion is unresolved. Nevertheless, if it were assumed that the power of the Court to reopen entered orders was only to be exercised in exceptional circumstances, it is not self-evident that the circumstances of the present case would satisfy that test.

23 The Court having no power to entertain the motion filed on 25 March 2008 on behalf of the respondent to the appeal, the motion should be dismissed. The respondent should pay the Commissioner’s costs of the motion.

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