In the matter of an application by Sahab Holdings Pty Limited

[2014] NSWCA 299

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of an application by Sahab Holdings Pty Limited [2014] NSWCA 299

Hearing dates:

On the papers

Decision date:

02 September 2014

Before:

McColl JA;
Macfarlan JA;
Tobias AJA;

Decision:

Grant Sahab Holdings Pty Ltd a certificate under the Suitors' Fund Act 1951 (NSW) in respect of the order of the High Court on 10 April 2013 that it pay the costs of Castle Constructions Pty Ltd and the Registrar-General.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

PRACTICE AND PROCEDURE - grant of certificate under the Suitors' Fund Act 1951 (NSW) - an application for a certificate is a fresh proceeding - no reason not to issue the certificate

Legislation Cited:

Suitors' Fund Act 1951 (NSW)
Uniform Civil Procedure Rules 2005 (NSW) r 36.16(3A)

Cases Cited:

Acquilina v Dairy Farmers Co-Operative Milk Co Ltd (No 2) [1965] NSWR 772
Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd [2013] HCA 11; (2013) 247 CLR 149
Gurnett v Macquarie Stevedoring Co Pty Ltd (No 2) [1956] HCA 29; (1956) 95 CLR 106
Solomons v District Court of New South Wales [2000] NSWCA 99; (2000) 49 NSWLR 321
Solomons v District Court of New South Wales [2002] HCA 47; (2002) 211 CLR 119

Category:

Procedural and other rulings

Parties:

Sahab Holdings Pty Ltd (Applicant)

Representation:

Solicitors:
Kanjian & Company (Applicant)

File Number(s):

2008/281514

Judgment

1. THE COURT: On 5 April 2012 the Court (Campbell JA and Tobias AJA jointly, McColl JA agreeing) allowed an appeal from orders made by Slattery J on 5 May 2010 and made consequential declarations and orders including an order that the respondents to the appeal, Castle Constructions Pty Ltd (Castle) and the Registrar-General, pay the appellant's (Sahab) costs thereof. It granted Castle a certificate under the Suitors' Fund Act 1951 (NSW) (the Act) with respect to the costs of the appeal if otherwise entitled.

1. On 7 September 2012 Castle was granted leave by the High Court to appeal this Court's decision. Sahab was named as first respondent to that appeal and the Registrar-General the second respondent. On 10 April 2013 the High Court allowed the appeal and set aside the orders of this Court made on 5 April 2012: Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd [2013] HCA 11; (2013) 247 CLR 149. It ordered Sahab to pay the costs of Castle and the Registrar-General both in this Court and in the High Court.

1. By notice of motion filed on 14 March 2014 Sahab seeks a certificate or certificates under the Act with respect to the costs it has been ordered to pay to Castle and the Registrar-General both in this Court and the High Court. The application was supported by an affidavit of Kenneth Kanjian, a director of Sahab, sworn 13 March 2014. The Court was constituted for present purposes by two of the judges of the Court who determined the appeal from the judgment of Slattery J together with Macfarlan JA, Campbell JA having since retired.

1. The power to grant such a certificate is to be found in s 6 of the Act which relevantly provides as follows:

"(1) If an appeal against the decision of a court:

(a) to the Supreme Court on a question of law or fact, or

(b) to the High Court from a decision of the Supreme Court on a question of law,

succeeds, the Supreme Court may, on application, grant to the respondent to the appeal ... an indemnity certificate in respect of the appeal."

1. Section 6(2) makes provision for where there is a sequence of appeals, an expression defined in s 2 of the Act to mean a sequence of appeals in which each appeal that follows next after another appeal in the sequence is an appeal against a decision in that other appeal. Section 6(2) provides, relevantly:

"Where a respondent to an appeal has been granted an indemnity certificate, the certificate shall entitle the respondent to be paid from the Fund:

(a) an amount equal to the appellant's costs of:

(i) the appeal in respect of which the certificate was granted, and also

(ii) where that appeal is an appeal in a sequence of appeals, any appeal or appeals in the sequence that preceded the appeal in respect of which the certificate was granted,

ordered to be paid and actually paid by the respondent ..."

1. Sahab submits and we accept that:

• each of the appeals to this Court and the High Court involved questions of law;
• the two appeals the subject of the present application constituted a "sequence of appeals" as defined in s 2 of the Act;
• the effect of s 6(2)(a)(ii) of the Act on a "sequence of appeals", as applied to the present case, is that where a respondent to an appeal to the High Court has been granted an indemnity certificate in respect of that appeal because the respondent is required to pay the costs of the successful appellant, the indemnity certificate will also entitle the respondent to receive payment from the Fund in respect of the appeal which preceded the appeal to the High Court provided the respondent has been ordered to pay the costs of the appellant in that earlier appeal;
• the recipient of an indemnity certificate need not be a respondent to the prior appeal in the sequence to qualify under s 6(2)(a)(ii) of the Act: see Acquilina v Dairy Farmers Co-Operative Milk Co Ltd (No 2) [1965] NSWR 772 at 776-777;
• the High Court did not have jurisdiction to grant an indemnity certificate under the Act so that the application for a certificate in relation to an appeal to the High Court must be made to the Supreme Court: Gurnett v Macquarie Stevedoring Co Pty Ltd (No 2) [1956] HCA 29; (1956) 95 CLR 106;
• the granting of an indemnity certificate is at the discretion of the Court and although the Act fails to provide specific guidance as to the criteria the Court ought to consider when exercising the discretion, it has been said that where the power exists to issue a certificate it should usually be granted as a matter of course in the absence of particular considerations which would warrant withholding the certificate;
• although the effect of s 6(7) of the Act is that a certificate cannot be granted to a corporation having paid up share capital of $200,000 or more, or to a corporation that is related to a corporation with such a paid up capital, that provision has no application on the facts of the present case: so much was deposed to in the Mr Kanjian's affidavit.

1. The leading authority on the construction of s 6 of the Act is that of the High Court in Gurnett. Relevantly, the majority (McTiernan J at 115; Williams J at 117; Webb J at 118 and Taylor J at 118-119) established the following propositions:

• The question of whether the Supreme Court should grant or refuse a certificate is a question entirely collateral to the subject matter under appeal; in particular, it does not arise between the parties to the appeal and involves the exercise of a discretion ex parte;
• The Act does not require that notice of the application should be served on any person including (now) the Director-General of the Attorney-General's Department, a corporation sole in whom the assets of the Fund are vested: see s 4(2);
• The same comment applies to the successful appellant who has no legal interest whatever in the fate of the application;
• The grant of a certificate is no part of the order allowing an appeal whether in this Court or in the High Court. It is a order made on a separate application of one of the parties and is no part of the order inter partes. It is therefore no part of the judgment inter partes on the appeal.

1. Thus, as stated by McTiernan J at 115 and Taylor J at 118-119, the function committed by the Act to the Supreme Court of determining whether indemnity certificates should be granted to unsuccessful respondents in appeals before it, is not one exercisable as part of the process of determining such appeals; rather, it has a collateral function and the grant of a certificate forms no part of the judgment disposing of any such appeal.

1. The position was more recently summarised by Mason P in Solomons v District Court of New South Wales [2000] NSWCA 99; (2000) 49 NSWLR 321 (affirmed in the High Court [2002] HCA 47; (2002) 211 CLR 119), at [23] where his Honour relevantly said:

"In [Gurnett] the High Court was considering the role of the Full Court of the Supreme Court of New South Wales when addressing an application for a certificate under the Suitors' Fund Act 1951. The majority held that the function of the Full Court under s 6(1) of the Suitors' Fund Act was not 'consequential upon and intimately bound up with the disposition of the appeal' to that court (the words of Dixon CJ (dissenting) (at [112])). The other members of the High Court regarded the function under the Suitors' Fund Act as not part of the function of disposing of the appeal ..." (Emphasis in original.)

1. Although Sahab was the respondent in the High Court, it was the appellant in this Court. However, as Moffitt J held in Acquilina at 777, it is not necessary in a case such as the present that Sahab be a respondent in both the High Court and this Court.

1. Two further comments need to be made. The first is that when the present application was received, the Court was concerned that it may be functus officio and thus had no power or jurisdiction to grant a certificate. However, the decision of the majority in Gurnett makes it clear that that is not so as the granting of the certificate is the subject of an application which is a fresh proceeding and entirely separate from the litigation the subject of the appeals in respect of which a certificate is sought. The second concerns the effect of r 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW) which provides, in effect, that the Court may only set aside or vary a judgment or order if a notice of motion is filed within 14 days after the judgment or order in respect of which it is sought to set aside or vary is entered and that the Court has no power to extend that time limit. As the application for a certificate does not involve either the setting aside or variation of the judgment or orders of this Court or the High Court in the substantive appeals but is a fresh application, the rule has no application.

1. There is no reason why the Court should not exercise its discretion to grant a certificate. As the High Court allowed the appeal from this Court and ordered Sahab to pay Castle's and the Registrar-General's costs both in the High Court and in this Court, it follows that by virtue of s 6(2)(a)(ii) of the Act it is only necessary for this Court to grant the certificate in respect of the High Court's order that Sahab pay the costs of that appeal. As there is a sequence of appeals it follows that that certificate will also apply to the costs in this Court which the High Court has now ordered Sahab to pay.

1. Accordingly the Court grants to Sahab a certificate under the Suitors' Fund Act 1951 (NSW) in respect of the order of the High Court that it pay the costs of Castle and the Registrar-General in that appeal.

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Decision last updated: 02 September 2014