Fletcher & Anor v POS Solutions Australia Pty Ltd & Ors
[2009] VSC 248
•19 June 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 6582 of 2003
| MARK TIMOTHY FLETCHER AND TOWER SYSTEMS INTERNATIONAL (AUST) PTY LTD ACN 007 009 752 | Plaintiffs |
| v | |
| POS SOLUTIONS AUSTRALIA PTY LTD (ACN 006 195 400) AND ORS | Defendants |
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JUDGE: | WILLIAMS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15 June 2009 | |
DATE OF JUDGMENT: | 19 June 2009 | |
CASE MAY BE CITED AS: | Fletcher and Anor v POS Solutions Australia and Ors | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 248 | |
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PRACTICE AND PROCEDURE – Errors in interlocutory costs orders – Purported correction of error – Purported correction of error not repeated on appeal – Whether appropriate to correct error using “slip rule” – Supreme Court (General Civil Procedure) Rules 2005 r 36.17, r 63.17
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr D J Williams of Counsel | The Law Offices of Barry Fried |
| For the Defendants | Mr M Goldblatt of Counsel | Goldsmiths Lawyers |
HER HONOUR:
This is an application by the plaintiffs for the amendment of orders made by Ashley J (as his Honour then was) on 10 December 2004. The plaintiffs seek to have the Court utilise the “slip rule” in r 36.07. The defendants dispute that the amendment should be made.
Background
On 10 March 2004, the plaintiffs issued a summons seeking that the existing 17 November 2003 amended defence and counterclaim and a proposed amended defence and counterclaim dated 23 December 2003 be struck out. The plaintiffs sought the costs of the application. The application was adjourned by consent on a number of occasions and eventually to 17 June 2004.
On 16 June 2004, the defendants issued a summons seeking leave to file an amended defence and counterclaim.
On 17 June 2004, on the plaintiffs’ 10 March summons, Master Evans (as his Honour also then was) struck out the defendants’ 17 November 2003 amended defence and counterclaim and ordered that the defendants pay the plaintiff’s costs of the application. The Master made a third order reserving the plaintiffs’ costs thrown away in considering two subsequent proposed versions of the pleading.
On the same day, the Master disposed in part with the applications in the defendants’ 16 June summons, ordering that a proposed further pleading be served by 27 July 2004. The Master expressly made, as his third order, an order that there be no order as to costs. He also adjourned the further hearing of the application for leave to amend to 12 August 2004.
It was pointed out subsequently by the solicitors for the plaintiffs that the Master’s orders were not correctly recorded and that the orders for costs had been made in the wrong applications. The plaintiffs’ solicitors suggested to the defendants’ solicitor that the order reserving costs shown to have been made in the plaintiffs’ application should be recorded as made on the defendants’ summons and the order on the defendants’ summons that there be no order as to costs should be deleted. The defendants’ solicitor indicated his consent to the suggested amendment of the orders by facsimile transmission dated 3 August 2004.
On 10 August 2004, the plaintiffs issued a further summons also returnable on 12 August 2004 seeking that the defendants be denied leave to file and serve their proposed 28 July 2004 amended defence and counterclaim and judgment in default of defence.
The Master handed down his decision in relation to the application for leave to amend on 3 November 2004. Then he made relevant orders, including procedural and costs orders. He also purported to correct the error made on 17 June 2004 by ordering (in accordance with handwritten draft minutes of order presented to him) that the third orders on each of the summonses be substituted for the third order on the other.
On 3 November 2004, the Master also dismissed the plaintiffs’ application by their 10 August 2004 summons and ordered that they pay the defendants’ costs of the application. He pointed out that the application for judgement was unnecessary as the plaintiffs’ could have awaited the outcome of the application for leave to file an amended defence and if it had been unsuccessful could then have sought judgement in default (given that the 17 November 2003 pleading had been struck out).
The plaintiffs appealed from the Master’s orders and the matter came on before Ashley J in the Practice Court on 25 November 2004.
Ashley J handed down his decision in the appeal on 9 December 2004. The transcript of the proceedings on the day is tendered in the application. His Honour allowed the parties the rest of the day to make submissions relating to his proposed orders, which set aside the Master’s 3 November orders but did not repeat the substitution order amending the costs orders made on 17 June 2004. The parties were represented by junior counsel. On the following morning, senior counsel for the plaintiffs informed Ashley J’s associate by facsimile transmission of agreed dates for insertion into the proposed orders, the parties’ agreement that a mediation by a certain date be ordered and that the orders be renumbered as a consequence .
On 10 December 2004, Ashley J made orders allowing in part the plaintiffs’ appeal from the Master’s 3 November orders and granting leave on the defendants’ 16 June 2004 summons for them to file an amended defence and counterclaim which accorded with his reasons for decision in the appeal. His Honour set aside the Master’s 3 November 2004 orders on the defendants’ 16 June summons and made orders in lieu, including one that the defendants pay the plaintiffs’ costs of the application including reserved costs. Ashley J did not, however, repeat the Master’s 3 November substitution order and there is no reference to that order in the transcript of the appeal or that of 9 December 2004 relating to the proposed orders in the appeal.
As for the plaintiffs’ 16 August 2004 appeal, Ashley J dismissed it and ordered the plaintiffs to pay the defendants’ costs.
On 3 October 2008 the plaintiffs filed a bill of costs claiming what is described in the heading to the bill as:
Costs of the plaintiffs against the defendants pursuant to the orders of Master Wheeler on 14 April 2004, Master Evans on 17 June 2004 and 3 November 2004.
On 22 December 2008, the defendants filed a summons for taxation of costs due to them under the Court’s orders of 3 November and 9 December 2004.
On 23 March 2009, the proceedings were compromised at mediation. The parties agreed to consent orders being made in the following terms:
The Proceedings and Counterclaim be dismissed with no Order as to costs save as for (sic) the Taxation of Costs set down for 8 May 2009 in respect of cost orders in favour of the Plaintiffs and Defendants respectively.
On 8 May 2009, Associate Justice Wood adjourned the taxation of costs on the plaintiffs’ summons for taxation filed on 3 October 2008 and the defendants’ taxation summons filed on 22 December 2008. His Honour noted in “Other Matters” that :
The effect of the order of Justice Ashley made on 9 December 2004 is that the order of Master Evans made on 3 November 2004 is set aside. Therefore the Defendants’ costs thrown away remain reserved by virtue of the order of Master Evans made on the Plaintiffs’ Summons and (sic) dated 17 June 2004 and there us not entitlement for these costs to be taxed in favour of the Plaintiff.
Noting in other matters that the taxation of costs had been set down for 8 May 2009, Associate Justice Kings made consent orders on 11 May 2009 that the proceedings and counterclaim be dismissed and that there was no order as to costs.
On 15 May 2009, the plaintiffs issued a summons foreshadowing a number of applications. Ultimately, counsel made only one of them, submitting that the Court should amend Ashley J’s order under the “slip rule” in r 36.07 of the Supreme Court (General Civil Procedure) Rules 2005 by inserting the following paragraph:
The Orders made by Master Evans on 17 June 2004 be corrected to show Order 3 on the Plaintiffs’ Summons filed on 10 March 2004 (“the Plaintiffs’ Summons”) as being made on the Defendants’ Summons filed on 16 June 2004 (“the defendants’ Summons”) and Order 3 on the Defendants’ Summons be deleted.
I shall refer to this order as “the Correction order”.
Submissions
The plaintiffs now contend that the Court should be satisfied that Ashley J would have made the Correction order on 10 December 2004, had the parties or the judge adverted to the need for the orders. They also contend that the Correction order represents the actual agreement made and that Master Evans’ 3 November 2004 order correcting his earlier orders did not.
They cite the High Court’s statement of relevant principle in Gould v Vaggelas (No 2)[1], where there had been a failure to seek an order for interest on a judgment debt when that interest had been ordered under the judgment restored in the appeal. There the court noted that its jurisdiction to make the order was unchallenged and went on to say:
Recent decisions of this Court provide illustrations of the injustice that may be caused to litigants by the inadvertence of counsel and the willingness of the Court in appropriate circumstances to grant a remedy: L. Shaddock & Associates Pty Ltd v Parramatta City Council (No. 2) ((1982) 151 CLR 590); The Commonwealth v McCormack (1984) 155 CLR 273; cf also Tak Ming Co Ltd v Yee Sang Metal Supplies Co ([1973] 1 WLR 300). Nevertheless, the jurisdiction is 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.[2]
[1](1985) 157 CLR 215 at 276 per Gibbs CJ, Wilson, Brennan and Dawson JJ.
[2](1985) 157 CLR 215 at 274-5 per Gibbs CJ, Wilson, Brennan and Dawson JJ.
The court took into account that the application did not come as an afterthought, that it was the result of an accidental omission on the part of the appellants’ legal representatives and that there had not been undue delay in bringing it. The material referred to the complexity of the legal issues and the facts to explain how the omission had come about. The court considered it important that a successful application had been made for a similar order to the Full Court. It noted that the appellants had been entitled to an award of damages in a very substantial sum which had been denied to them for a period of more than three years and held that an award at the apparently fair and just rate of interest was necessary to preserve the full benefit of the judgment. Significantly, the court saw no reason to doubt that the order would have been made if the matter had been canvassed at the time.
The plaintiffs argue that the error only recently came to light and that they have acted to correct it forthwith. They contend that the High Court in Gould made it clear that the error could be corrected even if made by a party’s representatives. The point is good and the defendants’ position unmeritorious. Fairness and justice require that it be corrected.
The defendants respond that the correction should not be made. They argue, in effect, that the plaintiffs seek to go behind the settlement to add a liability for costs not contemplated by the parties who had already issued summonses seeking taxation of costs returnable on 8 May on the basis of the status quo.
Counsel for the plaintiffs replies that the ambit of the matters referred for taxation is to be determined with reference also to the bills presented for taxation with the parties’ taxation summonses and the statement of objections to those bills. As no objection had been taken to the plaintiffs’ claim for costs thrown away before the settlement agreement, it could not be said, in his submission, that the settlement had been made when the parties were not contemplating that those costs would not be payable by the defendants to the plaintiffs. This he argues reveals how unmeritorious the defendants’ arguments are in attempting to capitalise on the plaintiffs’ error in failing to bring the matter to Ashley J’s attention. The issue of the settlement should not influence the exercise of the Court’s discretion in all the circumstances.
Counsel for the defendants answers that reply by referring to the general statement of objection in its notice of objection to the bill and the fact that the defendants had not been alerted to the issue.
The defendants also contend that the Court should conclude from Ashley J’s setting aside of the Master’s orders and his making of the orders in lieu which then repeated many of the Master’s orders that his Honour did turn his mind to the issue as to whether or not he should repeat the Master’s order and had decided not to do so. He dealt with the issue of the costs of the defendants’ summons by ordering them to pay the plaintiffs’ costs including any reserved costs. (Counsel agreed that the costs reserved by Master Evans had been reserved in the plaintiffs’ application and so were not covered by his Honour’s order.)
Counsel for the plaintiffs responds that it is inconceivable and absurd to suggest that Ashley J chose not to make the correction which the parties had sought of Master Evans by consent.
The defendants then say that any such order was unnecessary, in any event, because the plaintiffs are entitled to their costs in relation to the filing of amended pleadings under r 63.56 of the Rules, without the need for any order.
Counsel for the plaintiffs responds that ordinarily the Rules would have that effect. He contends, nevertheless, that they would not do so in this case because the costs have been dealt with when reserved by the Master on 17 June 2004, leaving the plaintiffs in a bizarre situation because the error has not been corrected by Ashley J when setting aside the Master’s 3 November 2004 correcting order. This is the view taken by Associate Justice Wood, in his submission.
The defendants also argue that the plaintiffs are making a de facto appeal from Associate Justice Wood’s decision, ignoring the provisions in the Rules relating to the requisite process for review of such decisions.
Conclusions
The Court’s discretion under the slip rule is to be exercised sparingly as was made clear in Gould v Vaggelas.
Ultimately, I am not persuaded that I should have no doubt that, had the parties adverted to the absence of orders correcting those made on 17 June 2004, Ashley J would have made them at all, much less in the different form now contended for.
First of all, whilst the plaintiffs now say that the correction order made by the Master on 3 November 2004 did not represent what had been agreed by the parties, I take it into account that the Master had been provided with handwritten draft minutes of order by them. I therefore do have a doubt that the parties would have argued on 9 or 10 December 2004 for the order in the form of the Correction order.
I also take into account that the parties were represented before Ashley J. The plaintiffs had the advantage of representation by senior and junior counsel who must be taken to have considered the terms of the proposed orders with some degree of close scrutiny before informing the judge’s associate of changes in the proposed dates on the morning after the matter of the form of orders had been first raised by Ashley J. Any failure on their part cannot, on the evidence before the Court, be explained as a consequence of the complexity of the matters being addressed. The defendants might also not have agreed that it was appropriate for his Honour to make the order and might have persuaded Ashley J not to do so.
Then, even assuming that the parties would have adverted to the absence of the orders, I am not without any doubt that his Honour would have made either an order in the form of Master Evans’ order or in that of the Correction Order in all the circumstances and bearing in mind the operation of r 63.17. His Honour had had time to consider the matter and I cannot be confident that he had not considered the appropriateness of the 3 November order. This is not a case where the orders were presented to the judge and made on the spot. Ashley J had provided the parties with his views as to the proposed orders to be substituted for the Master’s orders which he had expressly first set aside. He had also lifted many of the orders directly from the Master’s orders but not the order making the corrections.
It might even have been the case that Ashley J considered (or would have considered, had the matter been adverted to) that it would be inappropriate for him to order the correction of the Master’s orders on the plaintiffs’ 10 March 2004 summons in the context of the appeal. His Honour might have taken the view that the Master should make any such correction.
I do not consider this an appropriate case for the application of the slip rule in the manner sought in the exercise of my discretion. It is not necessary for me to determine whether I would have refused to exercise my discretion for the other reasons advanced by the defendants.
The application should be refused.
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