Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No. 2)
[1998] FCA 651
•12 JUNE 1998
FEDERAL COURT OF AUSTRALIA
PRACTICE & PROCEDURE - interlocutory orders granting stays – order of single judge “Leave to appeal is refused” – order made as one of a number of orders – true meaning of order – earlier reasons for judgment published without orders being made – no application before single judge under O 52 r 10 of the Federal Court Rules for leave to appeal - whether Court can grant leave to appeal - Borthwick principle - whether single judge acting in original or appellate jurisdiction of the Court - whether single judge has jurisdiction to determine whether orders interlocutory or final - questions raised of public importance - whether leave to appeal should be granted.
Federal Court of Australia Act 1976 (Cth), ss 4, 24(1), 24(1A), 25, 51
Trade Practices Act 1974 (Cth)
Carriage of Goods by Sea Act 1991 (Cth), s 11(2)
Federal Court Rules, O 19 r 1, r 2, O 52 r 10
Thomas Borthwick & Sons (Pacific Holdings) Ltd v Trade Practices Commission (1988) 18 FCR 424, considered and distinguished
Driclad Pty Ltd v Commissioner of Taxation of the Commonwealth (1968) 121 CLR 45, cited
The Queen v Ireland (1970) 126 CLR 321, cited
Décor Corp Pty Limited v Dart Industries Inc (1991) 33 FCR 397, cited
Thai v Deputy Commissioner (1994) 123 ALR 570, cited
Spiliada Maritime Corporation v Cansulet Ltd [1987] 1 AC 460, cited
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300, cited
Wati v Minister for Immigration and Multicultural Affairs (1997) 148 ALR 578, cited
Dallhold Investments Pty Ltd (in liq) v Gold Resources Australia Ltd (prov Liq apptd) (1991) 31 FCR 587, cited
The Commonwealth v Verwayen (1990) 170 CLR 394, cited
HI-FERT PTY LIMITED & ANOR v
KIUKIANG MARITIME CARRIERS INC & ANOR (No. 2)
NG 1100 of 1997
BEAUMONT, BRANSON AND EMMETT JJ
SYDNEY
12 JUNE 1998
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 1100 of 1997
BETWEEN:
HI-FERT PTY LIMITED
FIRST APPLICANTCARGILL FERTILIZER INC
SECOND APPLICANTAND:
KIUKIANG MARITIME CARRIERS INC
FIRST RESPONDENTWESTERN BULK CARRIERS (AUSTRALIA) LTD
SECOND RESPONDENTJUDGE(S):
BEAUMONT, BRANSON AND EMMETT JJ
DATE OF ORDER:
12 JUNE 1998
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
The applicants have leave to appeal from the orders dated 12 December 1997;
2.. The respondents pay the applicants’ costs of the application for leave to appeal.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 1100 of 1997
BETWEEN:
HI-FERT PTY LIMITED
FIRST APPLICANTCARGILL FERTILIZER INC
SECOND APPLICANTAND:
KIUKIANG MARITIME CARRIERS INC
FIRST RESPONDENTWESTERN BULK CARRIERS (AUSTRALIA) LIMITED
SECOND RESPONDENT
JUDGES:
BEAUMONT, BRANSON AND EMMETT JJ.
DATE:
12 JUNE 1998
PLACE:
SYDNEY
REASONS FOR JUDGMENT (NO. 2) ON WHETHER LEAVE TO APPEAL MAY BE, AND IF SO, SHOULD BE, GRANTED
BEAUMONT J:
The present issues and their context appear from the reasons of the other members of the Court, and need not be restated.
I agree that, relevantly, there was no “judgment” or “order” for the purposes of s 24 (read with s 4) of the Federal Court of Australia Act until Tamberlin J first made any orders, that is, on 12 December 1997. His Honour then ordered, inter alia, as it will be recalled:
“Order
(1)On the conditions in para 2, the whole of the proceedings against the first defendant be stayed and referred to arbitration in respect of that matter in London.
(2) The conditions referred to in para (1) are:
(a)that the arbitration as between the first defendant and the plaintiffs be treated as if it had been commenced with the appointment of the plaintiffs’ arbitrator on the same day as the commencement of these proceedings, namely 20 September 1996. The plaintiffs shall commence such proceedings within six months from the date of these orders;
(b)that the first defendant furnish security in respect of the arbitration, in the form annexed and marked “A”.
(3)The whole of the proceedings against the second defendant be stayed and referred to arbitration in respect of that matter in London.”
I have already expressed the view, in my earlier judgment dated 26 May 1998 that, notwithstanding the possibility that supervening circumstances might justify the variation, or even discharge, of these orders, they were, both “in reality” and technically, not “merely” interlocutory. It would follow that, were it not for the circumstance that on 12 December 1997, his Honour had also refused leave to appeal, I would grant leave here on the footing that fairness and justice require it. Thus, in granting leave from an interlocutory decision in Thai v Deputy Commissioner (1994) 123 ALR 570, Lockhart, Beaumont and Whitlam JJ said (at 578-9):
“...unless leave is granted, [the applicant] will never have the opportunity to test the correctness of the [interlocutory] decision before a Full Federal Court, notwithstanding the practical significance of that decision from [the applicant’s] standpoint. Fairness and justice require that leave be granted.”
So far as concerns the action against WBC, the practical significance of Orders (1), (2) and (3) made on 12 December 1997 is plain: the proceedings against WBC are “stayed [unconditionally] and referred to arbitration in respect of that matter in London”. Barring some presently unforeseen supervening event, there the matter will rest, in a London arbitration. I agree with the observations here of Emmett J that, in this sense, the “plaintiffs are precluded, at least for the present, from litigating in Australia the claims raised in the statement of claim filed in the Federal Court”; that “[t]hey will be required to prosecute those claims in a different forum subject to a different procedure and on the basis of evidence different from that which may be admissible under the law which would be applied by the Federal Court...”; and that this “is not a matter of mere practice and procedure...”.
So far as concerns the action against KMC, the operation of his Honour’s orders is more complicated, but their practical significance is no less, in my view. The complications arise from the imposition of the “condition” in Order 2(a). Read literally, this is not, in form at least, a condition imposed upon KMC. If that had in truth been intended, the order would have stated that the proceedings by stayed upon the condition that provided that the plaintiffs “shall commence such [arbitration] proceedings within six months from the date of these orders” (as Tamberlin J stated), KMC “should waive their right to rely on the time bar...” (to adopt the language of Lord Goff in Spiliada Maritime Corporation v Cansulet Ltd [1987] 1 AC 460 at 488).
It is common ground that if a stay were to be granted here, it may be granted conditionally, that is, upon terms. Order (1) speaks of the “conditions” in para 2. Order 2(b) is clearly a condition in that it identifies an act by KMC in the law, i.e. the provision by KMC of security. But the operation of Order 2(a) is not so obviously framed as a “condition” in any ordinary sense.
In the first sentence of Order 2(a) it is stated that “the arbitration... be treated as if it had been commenced...[on] 20 September 1996”. This appears to be a deeming provision, i.e. the statement of a legal fiction.
It is then stated that “[t]he plaintiffs shall commence such [arbitration] proceedings within six months of the date of these orders”. In form at least this is a direction to the plaintiffs to do something. Yet, in its terms, Order 2(a) reads as if it were a retrospective deeming provision, similar to an order made nunc pro tunc, operating from a date earlier than the date on which it is actually made (see Butterworths Concise Australian Legal Dictionary at 280).
However, when Order 2(a) is read in context and purposively as I think it should, it seems probable that what was intended, in substance, was that the stay and reference to arbitration would become operative if KMC were to elect to waive the time bar, provided that this election need not be made unless the plaintiffs commenced the arbitration promptly, i.e. within six months.
But whilst I incline to the view that Order 2(a) should be read purposively in the way I have suggested, its literal meaning is not obvious. If read literally, the source of the power to make such orders of a deeming kind, and by way of direction to the plaintiffs to commence the arbitration proceedings, is not apparent. Moreover, it appears that none of the parties was heard by the primary Judge on the way such a condition ought to be framed. Given the importance of this aspect, at least so much of the orders made on 12 December 1997 ought, in my view, to be open for review in the exercise of the exceptional inherent jurisdiction available in circumstances of the present kind to order that a judgment be vacated (see, e.g. Autodesk Inc v Dyason (No.2) (1993) 176 CLR 300). Whether Order 2(a) ought to be vacated, and if so, the effect of its vacation, are questions which do not arise for decision now. As the Full Court (von Doussa, Moore and Sackville JJ) noted in Wati v Minister for Immigration and Multicultural Affairs (1997) 148 ALR 578, although O 35 r 7(2) makes provision for varying or setting aside a judgment which, inter alia, is made in the absence of a party or does not reflect the intention of the Court, this Rule is expressed not to apply to the Court in the exercise of its appellate jurisdiction. It would be open, therefore, to any of the present parties to apply to Tamberlin J to seek an order vacating Order 2(a) and to seek consequential relief in that connection. I would emphasise that I am expressing no view on the question whether his Honour should make those orders. I am only expressing the opinion that in the present circumstances the primary Judge had an inherent jurisdiction, to be exercised exceptionally, to review Order 2(a) and to vacate it if appropriate, notwithstanding that the order has been formally entered (see, e.g. Dallhold Investments Pty Ltd (in liq) v Gold Resources Australia Ltd (prov Liq apptd) (1991) 31 FCR 587 at 596). I would only add that, if we are able to give leave to appeal, this aspect would be another reason for granting leave if we have the power.
I would add that an additional reason for permitting an appeal to go forward if the grant of leave is within our power is, as Emmett J has observed, and as Tamberlin J acknowledged, the legal questions sought to be raised by the plaintiffs on an appeal are appropriate for leave. As Tamberlin J said (at 351) “...these questions are of public importance”. I also agree with Branson and Emmett JJ that they raise several arguable issues.
The question remains whether, in the light of the Borthwick “election” principle, and given his Honour’s Order (4) on 12 December 1997 that “[l]eave to appeal is refused”, this Full Court can give leave.
It will be recalled that at all times the plaintiffs have contended that they had an appeal as of right here; and that consistently with this approach, on 7 November 1997, the plaintiffs propounded their proposed short minutes of orders in these terms (as Branson and Emmett JJ have noted):
“Insofar as leave to appeal is required, grant leave to appeal...” (Emphasis added).
In other words, as a practical approach to a potentially complex issue, the plaintiffs were prepared for the matter to go forward without pursuing their claim that an appeal lay as of right, if his Honour were minded to grant leave in any event. As it happened, Tamberlin J was not so minded. But there was never any waiver by the plaintiffs of their primary contention that an appeal lay as of right. Logically, and in strictness, this contention should have been first dealt with, and dealt with by the Court in the exercise of its appellate jurisdiction. This has since occurred but it had not occurred when Tamberlin J purported to order that the “leave to appeal is refused”.
What follows from the departure from the course of events that, strictly speaking, should have been observed? Or, to put it differently, did the plaintiffs, in making a conditional and “without prejudice” application for leave in November 1997, make a “Borthwick” election?
Until the hearing before and the decision of, this Full Court, by a majority, the appellate jurisdiction of the Court to decide whether or not his Honour’s Orders (1), (2), (3) and (5) of 12 December 1997 were “interlocutory” for the purposes of s 24(1A) had not been involved in that respect.
The exercise of the Court’s appellate jurisdiction is dealt with by s 25 relevantly as follows. This jurisdiction shall, subject to s 25, “be exercised by a Full Court” (s 25(1)). Applications (a) for leave or special leave to appeal to the Court; or (b) for an extension of time within which to institute an appeal to the Court; or (c) for leave to amend the grounds of an appeal to the Court; or (d) to stay an order of a Full Court - may be heard and determined by a single Judge or by a Full Court (s 25(2)). A single Judge or a Full Court may (a) join or remove a party to an appeal to the Court; or (b) make an order by consent disposing of an appeal to the Court; or (c) give directions about the conduct of an appeal to the Court (s 25(2B)).
The Rules of Court deal with applications for leave to appeal from interlocutory judgments. An application may be made orally to the Judge who has pronounced the judgment at that time (O 52 r 10(1)). Where such an application has not been made, an application may be made by motion on notice to a single Judge or to a Full Court (O 52 r 10(2)).
The statutory provisions and O 52 r 10 were examined by a Full Court (Bowen CJ, Lockhart and Sheppard JJ) in Borthwick.
At first instance, Wilcox J had dismissed a motion seeking to set aside service of the originating process and had declined to grant leave to appeal from that dismissal. The Full Court noted (at 426) that, unlike the present case, it was common ground between the parties that the judgment of Wilcox J was interlocutory. Their Honours were of the opinion that this characterisation was “plainly correct” (at 426).
The Full Court in Borthwick referred (at 429-430) to the amendments made in 1984 to the Federal Court of Australia Act and, consequently, to the Rules of Court, requiring, as s 24(1A) now does, a leave to appeal from interlocutory judgments. Their Honours said (at 431):
“Prior to the amendments to ss 24 and 25 appeals from interlocutory judgments of single judges of this Court and from interlocutory judgments of Supreme Courts of the States and Territories lay as of right to this Court constituted by a Full Court. Parliament perceived the need to change this. Parties could, as they sometimes did in practice, bring a string of appeals from interlocutory judgments of a single judge given in the course of a trial. Such appeals delayed and interfered with the proper conduct of the trial and hampered the proper administration of justice. The purpose of the amendments is plain from the text of the amendments themselves when considered in light of the mischief to be cured. The amendments are intended to have the result that appeals from interlocutory judgments may be brought to this Court only by leave and that a party may apply to a single judge or a Full Court for leave once and only once. No appeal lies from that decision whether as of right or by leave.”
Their Honours went on to say (at 433):
“A party must elect to apply for leave to appeal to this Court constituted by a single judge or a Full Court. As the Court remarked in Reid v Nairn, the parties’ election is between true alternatives which are neither progressive nor successive. Once the order has been made granting or refusing leave, no appeal lies from that order. To hold otherwise would set at nought the amendments made to the Federal Court Act by Statute Law (Miscellaneous Provisions) Act (No 1) by the insertion of s 24(1a) and the substitution of the new s 25(2).”
When Tamberlin J made Orders (1) (2) and (3), he was exercising the Court’s original jurisdiction. But when his Honour purported to refuse leave, his Honour was exercising its appellate jurisdiction. This is clear from the statutory language, specifically s 25(2)(a). As the Full Court said in Borthwick (at 431):
‘Applications for leave to appeal to the Court or for an extension of time within which to institute an appeal are heard and determined by the Court in the exercise of its appellate jurisdiction, not its original jurisdiction, notwithstanding that such applications may be heard not only by a Full Court but by a single judge. A single judge may sit either in open court or in chambers: see the definition of ‘judge’ in s 4 to which we referred earlier. In the expression ‘the Court or a Judge’, which appears in s 24(1a), the term ‘Judge’ means a judge sitting in chambers. The combined effect of ss 24(1a) and 25(2) is that applications for leave to appeal to the Court and applications for extension of time to appeal shall be heard and determined by a Full Court or by a single judge sitting either in open court or in chambers. By whomsoever the jurisdiction is exercised it is exercised as part of the Court’s appellate jurisdiction. This conclusion is plain from the language of ss 24 and 25.”
In my opinion, it is equally plain from the statutory language that a single Judge may only exercise the particular limited appellate jurisdiction previously described; and that this does not embrace the appellate jurisdiction to hear and determine the question whether an appeal lay as of right, that is, whether the appeal was in truth from an interlocutory order. It must follow, I think, that where, as here, such a question is contentious (and in Borthwick it was not in issue), only a Full Court, and not a single Judge, has that appellate jurisdiction.
In his reasons for refusing leave, Tamberlin J dealt with the present issue briefly (at 350):
“The decision on the stay is interlocutory. Therefore leave to appeal is required pursuant to s 24(1A) of the Federal Court Act and O 52, r 10 of the Federal Court Rules.”
In my opinion, a single Judge had no jurisdiction to decide any such contentious question. That is a matter for a Full Court. This is not to say that, absent such contention, a single Judge could not consider whether leave should be granted, as in Borthwick, where it is agreed by the parties that the order is interlocutory. That is not, of course, the present case. Accordingly Borthwick should be distinguished for our purposes. His Honour’s order refusing leave was clearly dependent upon his purported decision that, although contentious, only an interlocutory order was involved. Since that decision was made without jurisdiction, it must follow that the refusal was also made without jurisdiction.
Another, related aspect of this is whether there was here, in truth, an election of the kind considered in Borthwick. In my view, there was not, and the reasoning in Borthwick should be distinguished on this account also.
Election consists in a choice between rights which the person making the choice knows he or she possesses and which are “alternative and inconsistent rights” (per Brennan J in The Commonwealth v Verwayen (1990) 170 CLR 394 at 421). An election is binding on the party who makes it once it is made overtly, or, at all events, not later than on the communication of the election to the party or parties affected thereby; and it is binding whether or not others who are affected by the election have acted in reliance on it (per Brennan J at 421-2).
In Borthwick, the ingredients of election were present: it was common ground there that the decision sought to be challenged was interlocutory, so that leave to appeal was necessary, and the statute made it plain that an application for leave could be made to a single Judge or to a Full Court; these were alternative and inconsistent rights between which an applicant for leave could choose; the applicant chose the former, and was held to its election.
The present case is different. Here, the plaintiffs have always contended, as their primary position, that the orders were final, a position that was arguable as the reasons published on 26 May 1998 show. Strictly speaking, on the making of the Orders (1), (2), (3) and (5) (the last dealing with costs), the plaintiffs could have required that a Full Court determine whether those orders were final or interlocutory. Given that there was (as subsequent events were to show) at least an arguable prospect that leave would be granted, when regard is had to the practical significance of the orders and the public importance of the legal issues dealt with, it was reasonable that the plaintiffs were prepared for the matter to go forward before Tamberlin J on the condition that the application was “without prejudice” to the plaintiffs’ claim that the orders were final. If leave had been granted by his Honour, as the plaintiffs might reasonably have expected, it would have been unnecessary to explore their primary submission, and significant public and private resources would have been conserved. To speak of an election between a single Judge and a Full Court in the Borthwick sense in the present rather special circumstances is, to my mind, wholly artificial. There was no true election here. The plaintiffs never surrendered their primary position, so that the matter only went forward with that reservation and without any final, irrevocable election in any relevant sense being made.
Nor is there anything offensive to the spirit of Borthwick in now allowing the plaintiffs to approach an appellate court, for the first time, to test the correctness of orders of considerable practical significance and public importance. The mischief of multiple interruptions in the conduct of a trial which underlay the election doctrine is not visible in the present case.
In the circumstances, I will agree that leave be granted to appeal as proposed by Branson J, and that the plaintiffs should have their costs of the application for leave.
I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont.
Associate:
Dated: 12 June 1998
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 1100 of 1997
BETWEEN:
HI-FERT PTY LIMITED
FIRST APPLICANTCARGILL FERTILIZER INC
SECOND APPLICANTAND:
KIUKIANG MARITIME CARRIERS INC
FIRST RESPONDENTWESTERN BULK CARRIERS (AUSTRALIA) LTD
SECOND RESPONDENT
JUDGES:
BEAUMONT, BRANSON AND EMMETT JJ
DATE:
12 JUNE 1998
PLACE:
SYDNEY
REASONS FOR JUDGMENT
BRANSON J:
INTRODUCTION
The background to the matter before the Court is set out in the respective reasons for judgment of Beaumont and Emmett JJ in this matter dated 26 May 1998.
On 26 May 1998, by a majority decision, the Court dismissed as incompetent an appeal in this matter from orders made by Tamberlin J on 12 December 1997, on the basis that such orders were interlocutory orders and not final orders. Consequently no appeal lay from such orders without the leave of the Court or a Judge (s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (“the Act”)). Not only had the purported appellants to such appeal not obtained leave to appeal from the Court or a Judge, Tamberlin J had by order 4 of his orders of 12 December 1997 ordered that: “Leave to appeal is refused”.
The issues now before the Court are:
Whether, consistently with the decision of the Full Court of this Court in Thomas Borthwick & Sons (Pacific Holdings) Ltd v Trade Practices Commission (1988) 18 FCR 424 (“the Borthwick Case”), this Court can grant to the applicants leave to appeal from the orders of Tamberlin J dated 12 December 1997; and
If this Court can grant such leave, whether, in the circumstances, it should do so.
CAN LEAVE TO APPEAL BE GRANTED?
The background to order 4 of the orders made by Tamberlin J on 12 December 1997 is unusual. It reflects the course which the proceeding took before Tamberlin J. Such course is outlined in the reasons for judgment of Beaumont J of 26 May 1998 which should be read with these reasons.
In short, on 4 December 1996 Tamberlin J made certain rulings in the proceeding but did not make formal orders. Counsel for the applicants raised with his Honour on that day the issue of the time within which any appeal from his Honour’s rulings would have to be instituted. It appears that his Honour indicated that the time within which any appeal was required to be instituted would not commence to run until formal orders were made.
On 30 June 1997 Tamberlin J made further rulings in the proceeding. Again he did not make formal orders. His Honour directed the defendant [sic] to bring in short minutes of proposed orders to give effect to his Honour’s two sets of rulings. The issue of time to appeal was again raised and again his Honour apparently indicated that time to appeal would not commence to run until formal orders were made. The matter was stood over for argument as to the appropriate orders to be made.
Such argument took place on 7 November 1997. On that day the applicants filed in Court a notice of motion seeking an order:
“That the First and Second Plaintiffs have leave to appeal from the whole of the Judgments of Tamberlin J given on 4 December 1996 and 30 June 1997 at Sydney.”
The applicants also submitted short minutes of proposed orders on 7 November 1997 seeking an order in the following terms:
“Insofar as leave to appeal is required grant leave to appeal in respect of each of the Judgments of the Court dated 4 December 1996 and 30 June 1997 pursuant to Federal Court Rules Order 52 Rule 10.”
On 12 December 1997, for the reasons which his Honour then gave, the following orders were made:
“THE COURT ORDERS THAT:
1.On the conditions of par 2, the whole of the proceedings against the first defendant be stayed and referred to Arbitration in respect of that matter in London.
2. The conditions referred to in par 1 are:-
(a)That the arbitration as between the first defendant and the plaintiffs be treated as if it had been commenced with the appointment of the plaintiffs’ arbitrator on the same day as the commencement of these proceedings, namely 20 September 1996. The plaintiffs shall commence such proceedings within six months from the date of these orders.
(b)That the First Defendant furnish security in respect of the arbitration, in the form annexed and marked “A”.
3.The whole of the proceedings against the second defendant be stayed and referred to arbitration in respect of that matter in London.
4.Leave to appeal is refused.
5.The plaintiffs shall pay the defendants’ costs of the stay application, including costs of and incidental to the settling of these orders, and the costs of the application for leave to appeal.”
The reasons for judgment of Tamberlin J of 12 December 1997 illuminate the background and intended effect of order 4 above. His Honour observed, consistently with the view that the majority of this Court has now taken, that his decision on the stay application before him was interlocutory and that leave to appeal was therefore required. After considering the submissions of the parties, his Honour stated:
“Independently of the conclusion as to substantial injustice I do not consider that the grounds of appeal or the submissions of the plaintiffs are persuasive, nor do I consider that the reasoning in the two judgments is attended with sufficient doubt to warrant the grant of leave in respect of either judgment.
Accordingly, I do not grant leave to appeal in this matter. The defendants should have the costs of the application for leave to appeal.”
His Honour’s reference to “leave to appeal in this matter” indicates, in my view, that his Honour intended by order 4 of his orders of 12 December 1997 to refuse leave to appeal against orders 1, 2, and 3 of his orders of that day. I see no reason to conclude that his Honour intended to refuse leave to appeal against his reasons for judgment of 4 December 1996 and 30 June 1997. His Honour had earlier, rightly, indicated to the parties that such reasons for decision could not themselves be made the subject of an appeal.
However, it is of importance that the only application for leave which was before his Honour on 12 December 1997 was that made by the notice of motion dated 7 November 1997. Such notice of motion referred only to the “Judgments of Tamberlin J given on 4 December 1996 and 30 June 1997”. Indeed, his Honour appears in the above paragraphs from his reasons to recognise that the leave application before him related to his two earlier “judgments” as he concludes that he is not satisfied that “the reasoning in the two judgments is attended with sufficient doubt to warrant the grant of leave in respect of either judgment”.
Order 52 rule 10 of the Federal Court Rules, as far as is here relevant, provides as follows:
“10(1) An application for leave to appeal from an interlocutory judgment of the Court may be made orally to the Judge who has pronounced the judgment at the time of its pronouncement.
(2)(a) Where an application has not been made in accordance with sub-rule (1), an application may be made by motion on notice to a single Judge or to a Full Court, and the provisions of Order 19 shall apply.
(b)The notice shall be filed and served within seven days from the pronouncement of the interlocutory judgment from which leave to appeal is sought or within such further time as the Court or a Judge may allow.”
For the purposes of O 52 a “‘judgment’ means the judgment, decree, order, or sentence of a court or judge under appeal, or in respect of which leave to appeal is sought” (O 52 r 1).
It is plain that neither sub-rule (1) or (2) of O 52 r 10 could have been invoked in respect of the orders of Tamberlin J of 12 December 1997 at any time earlier than the pronouncement by his Honour of his orders on 12 December 1997. It is not surprising that the Rules of Court require an application for leave to appeal to follow, and not precede the giving of the judgment which is sought to be appealed. Only when the terms of the judgment are known can proper consideration be given to the question of whether leave to appeal should be granted. There is nothing ambiguous about the order sought by the notice of motion dated 7 November 1997. It inappropriately sought leave to appeal against “Judgments of Tamberlin J given on 4 December 1996 and 30 June 1997”. No such leave could have been given as his Honour made no orders or other “operative judicial acts” on those days: his Honour simply delivered “reasons for judgment” (Driclad Pty Ltd v Commissioner of Taxation of the Commonwealth (1968) 121 CLR 45 per Barwick CJ and Kitto J at 64). Presumably such notice of motion was filed out of an excess of caution. It was not, in my view, open to his Honour, at least without the consent of the applicants, to treat it as an application for leave to appeal against orders that he was yet to make. Yet this is what his Honour appears to have done, as the above passage from his reasons for judgment of 12 December 1997 reveals.
This was more than a mere procedural irregularity. It operated to deprive the applicants of the opportunity to choose between making an oral application to Tamberlin J for leave to appeal against his orders of 12 December 1997 or moving on notice to a single Judge or to the Full Court for such leave (O 52 r 10).
Can this Court now interfere with order 4 of his Honour’s orders of 12 December 1997? In the Borthwick Case, at 432-433, the Full Court said of O 52 r 10:
“The rule is designed to ensure that a party seeking leave to appeal from an interlocutory judgment of the Court may make the application orally to the judge who pronounced the judgment at the time of its pronouncement or within such further time as that judge may fix. Alternatively, the party seeking leave to appeal may approach any judge of the Court or a Full Court by motion on notice. The rule is intended to encompass all applications for leave to appeal from interlocutory judgments of single judges of the Federal Court whether made to a single judge or a Full Court. …
The fact that subr 10(2) requires an application for leave to be made by motion on notice in the proceeding is not inconsistent with the fact that the jurisdiction to hear and determine that application is within the Court’s appellate jurisdiction, whether that jurisdiction is exercised by a Full Court or a single judge. ...
Once the order has been made granting or refusing leave, no appeal lies from that order.”
It is to be noted that the Full Court in the Borthwick Case was concerned with the question of whether a party, which had deliberately invoked the appellate jurisdiction of the Court by applying orally to the judge who pronounced judgment for leave to appeal from such judgment, could thereafter appeal to the Full Court from his Honour’s refusal to grant such leave. That is not the question that arises in this case. Here the applicants did not seek to invoke the appellate jurisdiction of the Court by applying orally or otherwise to Tamberlin J for leave to appeal against the judgment pronounced by him on 12 December 1997. However, his Honour chose to treat their irregular application for leave to appeal against his earlier reasons for judgment as an application to him for leave to appeal against the orders which he was to pronounce on 12 December 1997. As is mentioned above, he was not, in my view, entitled so to do. Order 4 of his orders of 12 December 1997 cannot, in my view, be considered as an order made by his Honour in the exercise of the appellate jurisdiction of the Court pursuant to O 52 r 10 of the Federal Court Rules. Such appellate jurisdiction had not been invoked by the applicants. Such order was, in my view, an order inappropriately made by his Honour in the exercise by him of the original jurisdiction of the Court.
I conclude that the Court can, consistently with the Borthwick decision, grant to the applicants leave to appeal from all of the orders of Tamberlin J dated 12 December 1997. Each of them, including order 4, was, in my view, made by him in the exercise of the original jurisdiction of the Court. Order 4 was inappropriately made, and inoperative to prevent this Court from exercising the appellate jurisdiction of the Court to grant leave to appeal. However, it ought to be before the Court which hears the appeal so as to allow that Court to make an order setting it aside.
SHOULD LEAVE BE GRANTED?
Since writing the above, I have had the benefit of reading in draft the reasons of judgment of Emmett J on these issues. I am happy to adopt the reasons and the conclusion of his Honour on the question of whether leave to appeal should be granted in this matter.
CONCLUSION
In my view it is open to this Court to grant leave to the applicants to appeal from all of the orders pronounced in this matter on 12 December 1997. In my view such leave should be granted. The applicants should have their costs of the application for leave to appeal.
I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.
Associate:
Dated:
IN THE FEDERAL COURT OF AUSTRALIA
NG 1100 of 1997
NEW SOUTH WALES DISTRICT REGISTRY
BETWEEN:
HI-FERT PTY LIMITED
First ApplicantCARGILL FERTILIZER INC.
Second ApplicantAND:
KIUKIANG MARITIME CARRIERS INC.
First RespondentWESTERN BULK CARRIERS (AUSTRALIA) PTY LTD
Second Respondent
JUDGE:
BEAUMONT, BRANSON & EMMETT JJ
DATE:
12 JUNE 1998
PLACE:
SYDNEY
REASONS FOR JUDGMENT
EMMETT J:
The circumstances in which this matter arises are set out in the reasons for judgment published on 26 May 1998. In these reasons expressions used have the meaning given in my reasons of 26 May 1998. For the reasons then given, the Court, by majority, concluded that the orders from which the appeal by Hi-Fert and Cargill in proceeding NG 1101 of 1997 was brought were interlocutory and dismissed the appeal as incompetent. However, the Court deferred argument on the questions raised in proceeding NG 1100 of 1997.
In that proceeding, Hi-Fert and Cargill applied for leave to appeal from “the judgments of Tamberlin J given on 4 December 1996, 30 June 1997 and 12 December 1997 at Sydney and the orders of 12 December 1997”. In the alternative, Hi-Fert and Cargill applied for “leave to appeal from the order of Tamberlin J given on 12 December 1997 at Sydney refusing leave to appeal”.
The questions which are presently before the Court are:
Whether it is open to the Full Court:
(a) to grant leave to appeal from the orders made by Tamberlin J on 12 December 1997 granting stays, imposing conditions and ordering the plaintiffs to pay the defendants’ costs; or, alternatively
(b) to entertain an application for leave to appeal from the order made on 12 December 1997 that “leave to appeal is refused”.
If so, whether leave should be granted.
THE FRAMEWORK OF THE QUESTIONS
Sections 24(1), 24(1A) and 25 of the Federal Court of Australia Act 1976 (Cth) (“the Act”) relevantly provide as follows:
24(1) Subject to this section and to any other Act… the Court has jurisdiction to hear and determine –
(a)appeals from judgments of the Court constituted by a single Judge;
………………..
(1A) An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal.
………………..
25(1) The appellate jurisdiction of the Court shall… be exercised by a Full Court.
(2) Applications:
(a) for leave… to appeal to the Court
… may be heard and determined by a single Judge or by a Full Court.
The term “judgment” is defined in section 4 of the Act as “a judgment, decree or order, whether final or interlocutory, or a sentence”. Reasons for judgment are not judgments. In a proper use of terms, the only judgment given by a Court is the order it makes (see The Queen v Ireland (1970) 126 CLR 321 at 330 per Barwick CJ). While reasons for a judgment are often referred to as a “judgment”, when the word judgment is used in section 24(1)(a) it must refer to the use in the technical sense, meaning the actual orders made by the Court.
Order 52 of the Federal Court Rules contains provisions relating to appeals to the Federal Court and applications for leave to appeal. Division 1A was inserted into Order 52 following the enactment of the Statute Law (Miscellaneous Provisions) Act (No. 1) 1984 (Cth) which also inserted section 25(1A) and amended section 25(2). Division 1A relevantly provides as follows:
Division 1A – Leave to Appeal from Interlocutory Judgments of the Court
10(1) An application for leave to appeal from an interlocutory judgment of the Court may be made orally to the Judge who has pronounced the judgment at the time of its pronouncement.
(2)(a) Where an application has not been made in accordance with subrule (1), any application shall be made by motion on notice to a single Judge or to a Full Court, and the provisions of Order 19 shall apply.
Order 19 Rules 1 and 2 relevantly provide as follows:
1(1) Any interlocutory or other application in any proceeding which has already been commenced in accordance with these Rules shall be made by motion.
………………..
2(1) Subject to sub-rule (2), a person shall not move the Court or a Judge for any order unless before moving he has filed notice of the motion and has served the notice on each interested party…
(2) A person may move the Court or a Judge without previously filing or serving notice of the motion:
(a)where the preparation of the notice… would cause undue delay or other mischief to the applicant;
(b)where each party interested … consents to the order;
(c)where under these Rules the motion may properly be made without the prior filing or service (as the case may be) of notice of the motion;
(d)where the Court or a Judge dispenses with the requirements of sub-rule (1).
On 4 December 1996, Tamberlin J concluded that stays should be granted subject to hearing further submissions on the constitutional questions raised by Hi-Fert and Cargill. His Honour indicated that he proposed to hear submissions on the additional matters raised at a date to be arranged “before making any orders in this proceeding”. Thus, it is clear that no orders were made at that stage. It follows that, as at 4 December 1996, there was no judgment of Tamberlin J from which any appeal could be brought either with or without leave.
On 30 June 1997 Tamberlin J published his reasons for concluding that three questions raised by Hi-Fert and Cargill as to the constitutional validity of section 7 of the International Arbitration Act 1974 (Cth) (“the IA Act”) should be determined adversely to the contentions of those parties. His Honour directed that WBC bring in short minutes of proposed orders “to give effect to the reasons set out in my earlier judgment and in this judgment”. However, his Honour made no other order. It is clear that in using the term “judgment” in the manner just indicated, his Honour was not using the term as defined in section 4 of the Federal Court of Australia Act. Rather he was using the term as it is often used, in a non-technical sense. It follows that, as at 30 June 1997, there was no judgment within the meaning of section 4 from which an appeal could be brought either with or without leave.
On 7 November 1997 Hi-Fert and Cargill brought in draft short minutes. On that day, his Honour heard argument as to the form of the orders which should be made to give effect to the reasons which he had published on 4 December 1996 and 30 June 1997. In particular, a question arose as to whether conditions should be imposed on the grant of any stay. There was also a question as to the appropriate orders as to costs. In the result, his Honour imposed certain conditions on the stay in favour of KMC, declined to impose conditions on the stay in favour of WBC and ordered the plaintiffs to pay the defendants’ costs of the stay application, including the costs of and incidental to the settling of the orders. His Honour published his reasons for making those orders on 12 December 1997.
On 7 November 1997, a notice of motion was filed in Court by Hi-Fert and Cargill seeking orders:
1.That the first and second plaintiffs have leave to appeal from the whole of the judgments of Tamberlin J given on 4 December 1996 and 30 June 1997 at Sydney.
Further, the short minutes propounded by Hi-Fert and Cargill on 7 November 1997 also contained the following proposed order:
Insofar as leave to appeal is required grant leave to appeal in respect of each of the judgments of the Court dated 4 December 1996 and 30 June 1997 pursuant to Federal Court Rules Order 52 Rule 10. (emphasis added)
For the reasons indicated above, there was, as at 7 November 1997, no judgment within the meaning of section 4 of the Federal Court of Australia Act from which an appeal could be brought pursuant to section 24(1)(a) either with leave or without leave. Nevertheless, argument proceeded on that day on the question of whether or not some leave to appeal should be granted. However, it appears that no-one referred to the fact that the only leave sought was for leave to appeal from the “judgments” of 4 December 1996 and 30 June 1997 and that, at that stage, there was no judgment within the meaning of section 4.
In his reasons for judgment of 12 December 1997, his Honour gave reasons why he would not grant leave to appeal. His Honour said that he considered that the stay was interlocutory and indicated that he was considering leave to appeal under section 24(1A) of the Federal Court of Australia Act in respect of “the decision on the stay”. His Honour formulated the question which he was considering as “Whether leave to appeal should be granted in respect of my reasons”.
His Honour said:
I do not consider that the grounds of appeal or the submissions of the plaintiffs are persuasive, nor do I consider that the reasoning in the two judgments is attended with sufficient doubt to warrant the grant of leave in respect of either judgment.
Accordingly, I do not grant leave to appeal in this matter.
The order which his Honour made was simply:
Leave to appeal is refused.
That order was pronounced at the same time as the orders which granted the stays and ordered the plaintiffs to pay the defendants’ costs of the stay applications.
If leave to appeal from Orders 1, 2, 3 and 5 has been sought and refused, a question would arise as to whether any entitlement to apply for leave pursuant to section 24(1A) of the Federal Court of Australia Act has now been exhausted. That would involve a consideration of the decision of the Full Court in Thomas Borthwick & Sons (Pacific Holdings) Limited & Ors v Trade Practices Commission (1988) 18 FCR 424.
In Thomas Borthwick & Sons, the Court considered the terms of sections 24(1), 24(1A), and 25 of the Federal Court of Australia Act. The Court concluded that sections 24(1A) and 25(2), when read together, mean that application may be made to either a single Judge or a Full Court of the Federal Court for leave to appeal from an interlocutory judgment. A party must elect to apply for leave to appeal to this Court constituted by a single Judge or a Full Court. The party’s election is between true alternatives, which are neither progressive nor successive. Once the order has been made granting or refusing leave, no appeal lies from that order. To hold otherwise would set at naught the amendments made in 1984 (per the Court at pages 432-3). Thus, if Thomas Borthwick & Sons is correct, an application has been made for leave to appeal from Orders 1, 2, 3 and 5 made on 12 December 1997 and that application has been refused, it would not be open to the Full Court either to entertain any application for leave to appeal from Orders 1, 2, 3 or 5 nor from order 4 refusing such leave.
Hi-Fert and Cargill wish to contend that Thomas Borthwick & Sons was wrongly decided. However, we have not yet heard argument on that question. It is necessary, therefore, to consider, first, whether or not, in the events which happened before Tamberlin J, his Honour has refused leave to appeal from Orders 1, 2, 3 and 5 made on 12 December 1997. If not, it will be necessary to consider whether leave to appeal should now be granted.
HAS LEAVE BEEN REFUSED?
The question is whether Order 4 made by his Honour on 12 December 1997 should be construed as being limited to the only application which had been made to him at that stage, or whether it should be construed as relating to the orders which he made on that day. That is to say, the only application which had been made as at 12 December 1997 was that made by the notice of motion and by the propounding of draft short minutes. Both were limited to leave to appeal from what had occurred on 4 December 1996 and 30 June 1997. For the reasons indicated above, on neither occasion was any judgment, within the meaning of section 4 of Federal Court of Australia Act, pronounced.
In propounding orders in the form of the draft short minutes prepared on their behalf, Hi-Fert and Cargill sought leave “in so far as leave to appeal is required”. Further, the notice of motion, which was the only matter formally before his Honour on 7 November 1997, sought leave to appeal from the “judgments” given on 4 December 1996 and 30 June 1997. It may be that any application which was made on 7 November 1997 was only made ex abundanti cautela and that the plaintiffs did not intend that such application would operate in respect of orders which were yet to be made. That is not clear.
It is clear enough from his Honour’s reasons of 12 December 1997, however, that his Honour had considered whether or not leave should be granted in respect of what he had said on 4 December 1996 and 30 June 1997, since he referred expressly to those reasons as “judgments”. On the other hand, it is not clear whether his Honour treated the applications as having been made in anticipation of the making of orders as had been foreshadowed in the reasons of 4 December 1996 and 30 June 1997. In any event, his Honour, in his reasons for judgment of 12 December 1997, referred only to his earlier “judgment”. No reference was made to the orders which his Honour proposed to make.
Having regard to the reasons published on 12 December 1997, it appears highly likely that his Honour would have refused leave if an express application had been made, in accordance with the Rules, for leave to appeal from Orders 1, 2, 3 and 5 pronounced on 12 November 1997. However, that is not the question. The question is whether an application has been made to his Honour for leave to appeal from the “judgment” pronounced on 12 December 1997.
KMC and WBC contend that, while there may have been a failure to comply with the Rules, and in particular Order 52 Rule 10, in respect of any application for leave to appeal from the orders of 12 December 1997, that is no more than an irregularity. Accordingly, so it is contended, section 51 of the Federal Court of Australia Act applies. Section 51 provides that no proceedings in the Court are invalidated by a formal defect or an irregularity unless the Court is of the opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of the Court. It was contended that, since Hi-Fert and Cargill were given the opportunity of advancing arguments as to why leave should be granted in respect of the orders foreshadowed by the reasons of 4 December 1996 and 30 June 1997, there was no substantial injustice caused by any irregularity consisting in the failure to comply with Order 52 Rule 10 set out above.
That contention begs the question. It assumes that Order 4 pronounced on 12 December 1997 was a refusal of leave to appeal from Orders 1, 2, 3 and 5 pronounced on the same day. However, there is nothing in his Honour’s reasons do not say that his Honour was dealing with anything other than the application constituted by the notice of motion and the draft short minutes. They constituted the only application then before him. At the time when his Honour pronounced Order 4, Hi-Fert and Cargill had not had the opportunity of considering the form of Order 2 or his Honour’s reasons for refusing to impose conditions as sought in the draft short minutes propounded on 7 November 1997. If his Honour had been intending to refuse leave to appeal from the orders which he was then pronouncing, he had not at that stage afforded Hi-Fert and Cargill the opportunity of being heard on that question.
The only application which had been made to Tamberlin J was incompetent because at that stage there was no “judgment” from which any appeal could be brought, whether with or without leave. There was nothing else to which Order 4 could relate and Order 4 must, therefore, be taken to relate to that incompetent application. It follows that Order 4 was not a refusal of leave to appeal from Orders 1, 2, 3 and 5 pronounced on 12 December 1997.
Accordingly, the grant of leave pursuant to the application filed on 18 December 1997, in so far as it seeks leave to appeal from the orders of 12 December 1997, is not precluded by the decision of the Full Court in Thomas Borthwick & Sons. It follows that it is open to this Court, if it considers it appropriate, to grant leave to appeal from Orders 1, 2, 3, and 5 pronounced on 12 December 1997.
SHOULD LEAVE BE GRANTED?
When the Court comes to exercise its discretion on any particular application for leave under section 24(1A), an important distinction must be observed between an interlocutory decision on a point of practice and procedure and an interlocutory decision determining a substantive right. In the latter case, leave will more readily be granted (see Décor Corp Pty Limited v Dart Industries Inc (1991) 33 FCR 397 at 399).
In the present case, the effect of Orders 1, 2 and 3 made by Tamberlin J on 12 December 1997 is that the plaintiffs are precluded, at least for the present, from litigating in Australia the claims raised in the statement of claim filed in the Federal Court. They will be required to prosecute those claims in a different forum subject to a different procedure and on the basis of evidence different from that which may be admissible under the law which would be applied by the Federal Court in the determination of the issues raised. That is not a matter of mere practice and procedure such as might be involved in a question of discovery or interrogatories or the grant of an adjournment.
The questions intended to be raised upon any appeal, if leave is to be granted, are to be gleaned from the grounds specified in the notice of appeal filed in proceedings NG 1101 of 1997. The appeal would involve the questions which were dealt with by his Honour in his reasons for judgment of 4 December 1996 and 30 June 1997. The issues determined on the first date involved, inter alia, the construction of clause 34 of the charter party in so far as it provides that “any dispute arising from this charter or any bill of lading issued hereunder shall be settled in accordance with the provisions of the Arbitration Act 1950”. His Honour dealt with that construction question at some length. Included in that question is the extent to which a question of whether WBC had engaged in conduct which is misleading or deceptive in contravention of the Trade Practices Act 1974 (Cth) could give rise to a dispute “arising from” the charter party.
In addition, on any appeal, questions would arise as to the extent to which any arbitration agreement between KMC and the plaintiffs is affected by section 11(2) of the Carriage of Goods by Sea Act 1991 (Cth). Section 11(2) provides, relevantly, that an agreement has no effect so far as it purports to preclude or limit the jurisdiction of a court of the Commonwealth in respect of a bill of lading relating to the carriage of goods from any place outside of Australia to any place in Australia.
That raises a question as to the extent to which the decision of the High Court in Compangnie des Messageries Maritimes v Culson (1954) 94 CLR 577 applies to section 11(2).
On 30 June 1997, his Honour concluded that section 7(2) of the IA Act is valid and should not be read down so as not to oust the exercise by the Federal Court of the judicial power of the Commonwealth in respect of the several causes of action in the proceedings. His Honour also determined that commercial arbitrators in London are not incapable of determining any question requiring, in substance, the exercise of the judicial power of the Commonwealth.
Tamberlin J expressed the view that the grounds of appeal and the submissions of the plaintiffs were not persuasive. However, the arguments are not such as can be dismissed out of hand and the questions are of public interest in that they would be of considerable significance to all traders involved in shipping to and from Australia. Further, if the plaintiffs are wrongly deprived of the opportunity of litigating, in the forum of their choice, the issues raised in the proceedings, there could well be an injustice flowing from Orders 1, 2 and 3 made on 12 December 1997.
Counsel for WBC pointed out that, but for the constitutional questions raised by Hi-Fert and Cargill, it was common ground that section 7(2) of the IA Act would apply to any negligence claim or claim for breach of contract alleged in the statement of claim since those matters clearly gave rise to disputes “arising from” the charter party. Further, WBC contended that the constitutional questions are doomed to failure.
Even if that be so, there are still questions as to the applicability of the arbitration clause to the questions arising under the Trade Practices Act. If the Court came to a different conclusion from that reached by his Honour, significant questions may arise as to whether, if section 7(2) of the IA Act dictated a stay of some claims, other claims should be litigated in the Court. If it were not open to an arbitrator to determine questions arising under the Trade Practices Act, it may be necessary for those questions to be resolved in the Federal Court.
There was evidence before his Honour, in the form of a written opinion of English Queen’s Counsel, to the effect that arbitrators would not resolve misrepresentation disputes applying the Trade Practices Act. In his reasons of 4 December 1996, his Honour referred to the decision of the New South Wales Court of Appeal in Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160. Gleeson CJ (with whom Meagher and Sheller JJA agreed) pointed out that it was for the arbitrator to decide, applying relevant principles of conflict of laws, what part the allegation of a contravention of the Trade Practices Act and any asserted entitlement to relief under section 87 of that Act would play in the arbitration. Gleeson CJ considered that it was not for the New South Wales Court of Appeal to pre-empt that decision.
That, however, is a question which arises in these proceedings. Tamberlin J concluded that, in this case, the parties have clothed the arbitrator, by agreement, with jurisdiction to deal with Australian trade practices allegations. That is a question of some importance and it is one in respect of which there must be some doubt.
Having regard to the above considerations, if there is power to grant leave to appeal from Orders 1, 2, 3 and 5 pronounced on 12 June 1997, leave should be granted.
I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett
Associate:
Dated: 12 June 1998
Counsel for the Applicants: P.E. King M.J. Watts Solicitor for the Applicants: Withnell Hetherington Counsel for the First Respondent: G.J. Nell Solicitor for the First Respondent: James Neill Solicitor Counsel for the Second Respondent: N.C. Hutley SC
A.S. BellSolicitor for the Second Respondent: Ebsworth & Ebsworth Date of Hearing: 4 June 1998 Date of Judgment: 12 June 1998
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