Georgouras v Bombardier Investments No. 2 Pty Ltd
[2013] NSWSC 1549
•18 October 2013
Supreme Court
New South Wales
Medium Neutral Citation: Georgouras v Bombardier Investments No. 2 Pty Ltd [2013] NSWSC 1549 Hearing dates: 18 October 2013 Decision date: 18 October 2013 Jurisdiction: Equity Division - Commercial List Before: Stevenson J Decision: Notice of Motion dismissed
Catchwords: PRACTICE AND PROCEDURE - judgments and orders - correction of order under the slip rule - Uniform Civil Procedure Rules 2005 r 36.17 - common ground there was a slip - discretion to correct the slip - delay in bringing application - whether plaintiff prejudiced by delay Legislation Cited: Civil Procedure Act 2005
Uniform Civil Procedure Rules 2005Cases Cited: Calderbank v Calderbank [1975] 3 All ER 333
Hanave Pty Ltd v LFOT Pty Ltd [2004] FCAFC 180; (2004) 136 FCR 566
Hatton v Harris [1892] AC 547
Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group Inc [2007] NSWCA 195; (2007) 70 NSWLR 411Category: Interlocutory applications Parties: Nicholas Georgouras (respondent/plaintiff)
Bombardier Investments No. 2 Pty Ltd (applicant/defendant)Representation: Counsel:
V F Kerr (respondent/plaintiff)
F F F Salama (applicant/defendant)
Solicitors:
Wood Marshall Williams Lawyers (applicant/defendant)
File Number(s): SC 2010/146839 Publication restriction: Nil
EX TEMPORE Judgment (REVISED)
By Notice of Motion dated 3 July 2013, the defendant seeks an order under the "slip rule" (Uniform Civil Procedure Rules r 36.17) to correct an error in an order made on 21 July 2011 by Einstein J.
His Honour heard these proceedings on 11 and 12 July 2011. The plaintiff appeared by his wife acting as a McKenzie friend. Mr Kerr, who appears for the plaintiff on this application, informs me that neither the plaintiff nor his wife has legal qualifications.
His Honour delivered his principal judgment on 18 July 2011. On 21 July 2011, his Honour heard argument as to costs. Again, the plaintiff appeared by his wife.
His Honour delivered an ex tempore judgment on 21 July 2011 on the question of costs. His Honour considered the terms of a Calderbank offer that the defendant had made to the plaintiff on 8 November 2010 and concluded that:
"Attaching weight to the defendant's Calderbank letter, the proceedings could have ended earlier with a more favourable result for the plaintiff than the judgment award. Accordingly, the principled exercise of the relevant discretion is to order that:
(1) Each party bear its own costs up to 7 November 2010;
(2) From 8 November 2010; the plaintiff is to pay 50% of the defendant's costs assessed on an indemnity basis. "
However his Honour went on to make orders in these terms:
"The Court makes the following orders:
(1) That the defendant is to pay the plaintiff's nominal damages in the sum of $5.00.
(2) That each party is to pay its own costs up to an including 7 November 2011.
(3) That from 8 November 2011, the plaintiff is to pay 50% of the defendant's costs assessed on an indemnity basis."
The reference in the order to "2011" should, obviously, have been to "2010" ("the Slip").
The Slip found its way into the final orders. The result was that the order made by his Honour on 21 July 2011 provided that each party was to pay their own costs up to 7 November 2011 (four months later) and that from 8 November 2011 (four months later), the plaintiff was to pay half of the defendant's costs assessed on an indemnity basis.
It is common ground that the Slip is amenable to correction under UCPR r 36.17. The question here is whether in the exercise of my discretion, I should make the correction.
On an application under the slip rule, two questions arise (see Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group Inc [2007] NSWCA 195; (2007) 70 NSWLR 411):
(a) was there an error arising from an accidental slip or omission; and
(b) should the Court exercise its discretion to correct the error?
In exercising its discretion the Court must give effect to the overriding purpose of the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules, as set out in s 56(1) of the Civil Procedure Act (see Newmont at [27]). It should also proceed on the basis that variation of an order of the Court after entry of judgment is an exceptional course (see Newmont at [29]).
In Hanave Pty Ltd v LFOT Pty Ltd [2004] FCAFC 180; (2004) 136 FCR 566, Wilcox and Allsop JJ held:
"The nature and extent of the desired variation of the judgment, the delay in bringing the variation forward, the explanation going to the existence of the accidental slip or omission and for the delay are fundamental considerations... Once litigation is over people should generally consider themselves free from further agitation of an already quelled controversy. This is the policy of finality of litigation." (at [4]).
Also relevant to the exercise of discretion to cure a slip is the public interest in having the reasons of the Court, and the obvious intention of the Court, manifested in the orders made pursuant to those reasons.
Amendments made under the slip rule operate from the date of the original orders, so that the Court will not make an order for amendment where it would interfere with the rights of third parties or otherwise be inexpedient or inequitable: Hatton v Harris [1892] AC 547 at 558 per Lord Herschell and 560 per Lord Watson.
The plaintiff submits that there are two reasons why, in the circumstances of this case, I should not correct the error.
The first is the delay in the bringing of the application. The Notice of Motion seeking to cure the Slip was filed a little under two years after the costs order was pronounced.
The second is that the plaintiff contends that he has been prejudiced by the delay.
Background
The plaintiff leased premises in Brookvale from the defendant under a lease made on 1 February 2009.
In May 2010 Warringah Council issued a notice that the premises were not compliant with their original development approval and that certain structures within the premises be demolished and removed.
In June 2010 the plaintiff commenced these proceedings. By an Amended Summons filed on 28 June 2010 the plaintiff sought an order for specific performance to enable him to stay in the premises and have the defendant rectify the premises to comply with Council's requirements, and alternatively damages.
By a letter of 8 November 2010 from its solicitor, the defendant offered to resolve the plaintiff's claim on the following terms:
"We have been instructed to put forward to you an offer on the following terms as full and final settlement of the proceedings
1) The Defendant to pay the Plaintiff $10,000 in full and final satisfaction of the Plaintiff's claims;
2) Each party to bear their own legal costs;
3) Deed of Settlement entered into on normal terms between the parties with mutual releases;
4) The proceedings be dismissed.
This offer is made in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333."
The plaintiff did not accept the offer.
In December 2010 the plaintiff was advised by his insurer that, due to the non-compliance of the premises with its Development Approval, his policy would be cancelled. He decided to terminate the lease and to amend his claim by deleting the claim for specific performance and to seek damages only. He did so by filing a Second Amended Summons on 25 February 2011.
The hearing proceeded on 11 and 12 July 2011. His Honour found that the defendant was in breach of the lease at the time it was entered into, that the lease was void from the time Council served its first notice and that the plaintiff was entitled to nominal damages of $5.
On 21 July 2011, his Honour dealt with costs as I have set out above.
On 12 August 2011, the plaintiff filed and served a Notice of Intention to Appeal. That document stated that the plaintiff intended to commence appeal proceedings within three months after the material date; stated to be 18 October 2011.
Before me, it was common ground that the time by which it would have been necessary for the plaintiff to file a notice of appeal was in fact 21 October 2011.
The plaintiff discovered the Slip in September 2011.
The plaintiff gave the following evidence about that matter:
"After the final hearing of 21 July 2011 [Mrs Georgouras] assisted me in considering whether to lodge an appeal. In September 2011 we discovered [the Slip]. [Mrs Georgouras] then undertook some research about that matter.
[Mrs Georgouras] told me that she had concluded that it was now too late for the applicant to have the orders amended and that the applicant must have accepted the status quo through not applying to have the orders amended. Under the orders in their current form there were no costs which I was required to pay. I therefore decided there would be no benefit in pursuing an appeal concerning the costs issue and that, without pursuing that part of the appeal, there was no utility in appealing from any other part of the judgments. I therefore decided not to pursue an appeal."
Mrs Georgouras gave this evidence:
"I believed that Nicholas Georgouras may have two arguments for appeal:
(a) the quantum of damages - in my view the damages were unfair in that they did not address my loss of interest in the property or any expectation loss from my exhibition with the Greek Festival of Sydney
(b) the order for costs - in my view the indemnity costs awarded to defendant were unfair because Justice Einstein failed to give proper consideration to the state of the litigation at the time the offer was made in determining whether the applicant's Calderbank offer was more favourable than the judgment.
In September 2011, while considering whether to lodge an appeal we discovered the error in the dates in the orders made by Justice Einstein. I then sought to understand what that might mean. I referred to the Uniform Civil Procedure Rules and to the Judicial Commission Civil Trials Bench Book.
It appeared to me that the relevant rule was rule 36.16(3) of the Uniform Civil Procedure Rules (2005), which I understood to allow the Court to set aside or vary a judgment providing that a notice of motion was filed within 14 days. Also the following passage appeared in the Bench Book, at [8-0150] "Miscellaneous Costs Issues - Correcting or varying a costs order":
Costs orders may be corrected under the slip rule (r 36.17), such as where some item was overlooked at the time of the original order: Pacific Steel Constructions Pty Ltd v Barahona (No 2) [2010] NSWCA 9 at [9]. A costs order may be varied after it has been entered pursuant to a motion filed within 14 days: r 36.16 (3A).
This led me to believe that the applicant had fourteen days in which to enact the 'slip rule'. I discussed my research with Nicholas and we decided that there was no purpose in pursuing the appeal since there were not costs to pay under the order."
There is no dispute before me that Mrs Georgouras' analysis of the legal situation was wrong and that there is, in effect, no time limit for making an application under UCPR r 36.17.
However, as I have mentioned, I have been informed that neither the plaintiff nor Mrs Georgouras has legal qualifications.
It is not suggested that Mrs Georgouras, and thus the plaintiff, was not genuinely of the view that by September 2011, the defendant was out of time to correct the Slip. Nor was there any dispute that it was on that basis that the plaintiff decided not to pursue the appeal.
In the meantime, the defendant and its solicitors gave consideration to the steps necessary to implement Einstein J's costs order of 21 July 2011 as they understood it to have effect.
The solicitor who had carriage of the matter on behalf of the defendants, Ms Bernauer, gave this evidence:
"Upon receipt of the Notice of Intention to Appeal, I was instructed by my client not to proceed with the costs assessment process until the appeal period had lapsed. My client advised that it did not wish to incur the costs of preparing a Bill of Costs until it was known whether the Plaintiff would be lodging an Appeal in the matter."
Once the time to appeal expired, Ms Bernauer engaged a costs consultant to prepare a bill of costs. The costs consultant was instructed to prepare the bill of costs on the basis that the defendant was entitled to recover costs after 8 November 2010. The process of preparing a bill of costs took a number of months. It was not until 8 March 2012 that a bill of costs was served on the plaintiff.
The defendant then sought to have the costs assessed. The Court appointed Mr Vincent Goldrick as costs assessor.
On 24 May 2012, the plaintiff wrote to Mr Goldrick, attached a copy of Einstein J's judgment of 21 July 2011, pointed out that the costs order was "from 8 November 2011" and asserted that the bill of costs was "invalid".
The plaintiff said he had also sought procedural advice from the Registrar of the Supreme Court "who declared that the parties must follow the sealed orders of the Court".
The plaintiff concluded his letter as follows:
"Therefore, I consider that, as the whole of the applicant's Bill of Costs does not replicate the Orders of the Court, is invalid and should never have been submitted for Costs Assessment."
At this time, the plaintiff still believed that the defendant was out of time to cure the Slip.
Mr Goldrick sent Ms Bernauer a copy of that letter. Ms Bernauer gave evidence, which I accept, that it was only on reading this correspondence that she became aware of the Slip.
On 6 June 2012, Ms Bernauer wrote to Mr Goldrick drawing attention to the references in Einstein J's judgment of 21 July 2011 to "November 2010" (not "2011"). Ms Bernauer concluded:
"On this basis, we invite you to consider the judgment itself and the references throughout it on numerous occasions to November 2010.
In the event that you consider it necessary for us to make an application by way of Notice of Motion, pursuant to rule 36.17 of the Uniform Civil Procedure Rules 2005 (NSW), kindly let us know and we will attend to this expeditiously in order to avoid any further delay in the Costs Applicant receiving Costs Certificate from you." (emphasis in original)
Having received a copy of that letter, the plaintiff wrote to Mr Goldrick on 14 June 2012:
"The applicants do not have any legal authority to 'invite' other entities to change the cost orders. If they wish to amend the orders there is a process that must be followed which, for the past year, they have not undertaken."
That correspondence should have made it perfectly clear to the defendant's legal representatives that, if the Slip was to be corrected, it would be necessary for the defendant to bring an application under UCPR r 36.17. However, no application was then made.
Instead, Mr Goldrick continued on his task of costs assessment. Many months went by.
On 11 October 2012, Mr Goldrick wrote to the "Principal Registrar, Costs Assessment" asking the Court to correct the Slip of its own motion, which, of course, the Court can do under UCPR r 36.17:
"Pursuant to Rule 36.7 [sic] the court may, on application or of its own motion, correct a clerical mistake or an error arising from an accidental slip in a judgment, order or certificate. In the interests of correcting this issue expeditiously and without the parties incurring the further costs of filing a Motion I request you approach the Judge's Associate in question and request His Honour review and, if appropriate, correct this slip and issue a corrected certified copy of the judgment." (emphasis in original)
The plaintiff received a copy of that letter and on 17 October 2012 wrote to the Court asserting that it was too late to cure the Slip.
The plaintiff still believed that the defendant had only 14 days to act to cure the Slip.
The plaintiff wrote:
"I have informed Mr. Goldrick of my objection to the current cost assessment action on the grounds that the Applicant's Bill of Costs did not reflect the sealed orders of the Court. However, Mr Goldrick has seen fit to have the final orders issued by the now retired Justice Einstein varied to reflect the wishes of the Applicant. I find this action rather arbitrary for a Cost Assessment process, as the Applicant has had over a year to seek an extension of time for filing a Notice of Motion to vary the orders."
The defendant's solicitors received a copy of that letter.
That must have made it clear, if the matter was not already clear, that if the defendant wished to have the Slip cured, it would have to bring an application under UCPR r 36.17.
The costs assessment process ceased at that point.
Thereafter, the position the defendant adopted was to endeavour to avoid incurring costs and to seek to persuade the plaintiff that he ought to agree to the Slip being cured.
On 29 January 2013, Ms Bernauer received instructions from Ms Karlie Bombardier, who I infer is a person associated with the defendant, as follows:
"We don't want to spend any further money in these proceedings unless we really have to. The Judge was clearly referring to 2010 and not 2011. The letter of offer was dated November 2010. November 2011 had not even taken place at the date of judgment so it doesn't make sense that they would argue the point. Can you try and sort it out with them. You can prepare the documents you need to but don't start proceedings unless it's a last resort."
Over the next few months, Ms Bernauer wrote to and tried to telephone the plaintiff and Mrs Georgouras without success.
I now turn to the two bases upon which the plaintiff resists the defendant's application.
Delay
Mr Kerr points out that the defendant has taken almost two years to make this application. He submitted that this was a significant delay for which the defendant had no satisfactory explanation.
I find that the matters that I have set out above provide an explanation for what has happened. However, I do not find the explanation satisfactory.
I accept without reservation that Ms Bernauer did not become aware of the Slip until May 2012.
However, I accept Mr Kerr's submission that Ms Bernauer had every opportunity to identify the error at an earlier time.
According to a bill of costs which is in evidence, on 21 July 2011, Ms Bernauer spent 12 minutes perusing the letter from counsel and Einstein J's judgment of that day. On 1 August 2011, Ms Bernauer spent 30 minutes in conference with the defendant reviewing the terms of the judgment and the costs order. The Slip was obvious and could easily have been seen on those occasions.
As it turns out, it was not until Ms Bernauer saw the plaintiff's letter of 24 May 2012 that she became aware of the Slip.
As I have said, the plaintiff's letters of 24 May 2012, 14 June 2012 and 17 October 2012 should have made clear to the defendant that the plaintiff's position was that if the Slip was to be corrected, a court order would be needed.
Prejudice
The plaintiff believed that the defendant had 14 days from the date of the order to move to correct the Slip.
That was because of the plaintiff's, or perhaps more accurately his wife's, misapprehension of the effect of the rules. It is true that nothing that the defendant said or did engendered that misapprehension.
However, because the defendant did not move to cure the Slip within the time during which the plaintiff could prosecute an appeal from Einstein J's orders, the plaintiff decided to abandon the appeal.
Because of the amount of Einstein J's judgment, the plaintiff would have needed leave to appeal from the orders of 18 and 21 July 2011 in any event.
It is neither necessary nor appropriate that I express any view as to what the plaintiff's prospects would have been, in 2011, of getting that leave or of any appeal succeeding had leave been given. I am, however, satisfied that the application for leave would not have been so futile that it was bound to have failed. Mr Salama, quite properly, made no submission to the contrary.
The plaintiff is now well out of time to seek leave to appeal.
If the Slip is corrected, it will take effect nunc pro tunc.
Thus, on the face of it, the plaintiff is prejudiced by the defendant's delay in bringing this application. That prejudice arises from the defendant's failure to act prior to 21 October 2011; the final date for the filing of a notice of appeal.
Mr Salama informed me that if I were to grant the defendant the relief it seeks today, the defendant would consent to whatever order was needed to ensure that the plaintiff could bring an application for leave to appeal out of time. Mr Salama also informed me that the plaintiff would do whatever was necessary, including providing affidavit evidence, to assist the plaintiff to get such leave.
The offer was properly made and the Court appreciates the spirit in which it was offered.
However, I am not confident that that offer can cure the prejudice that the plaintiff has suffered.
As I have said, the plaintiff needs leave to appeal in any event. Notwithstanding the explanation that could obviously be offered to the Court of Appeal in relation to the delay, and the defendant's consent to the bringing of the application out of time, the Court of Appeal may well consider the delay in bringing the application to be a matter relevant to its consideration of the question of leave.
It is not possible to predict what weight the Court of Appeal would give to delay and how it would weigh that matter up with the other issues which are relevant (for example, the amount involved, the plaintiff's prospects of success and other like matters).
The fact remains that the question of delay would not have arisen had the defendant noticed the Slip and moved to cure it in a timely fashion.
I have not found this matter easy to resolve.
Having given the matter careful consideration, my conclusion is that, taking into account all of the matters to which I have referred, particularly the combination of the delay and the prejudice that the plaintiff may well suffer if the relief that is sought is granted, the relief should be refused.
The defendant's Notice of Motion of 3 July 2012 is dismissed with costs.
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Decision last updated: 23 October 2013
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