Lowe v Pascoe (No 3)
[2011] NSWSC 192
•24 March 2011
Supreme Court
New South Wales
Medium Neutral Citation: Lowe & Anor v Pascoe & Ors (No 3) [2011] NSWSC 192 Hearing dates: 20 December 2010, 31 January 2011, 1 February 2011, 15 - 17 March 2011 Decision date: 24 March 2011 Jurisdiction: Equity Division Before: Smart AJ Decision: Objection to jurisdiction over-ruled
Catchwords: JURISDICTION - Supreme Court has power to re-open matter and evidence after two reasons for judgment (entitled "Judgment") delivered - Operation and effect of UCPR 36.11 and 36.16 - Court had not concluded consideration of controversy - Extended hearing of partnership dispute - Tracing type relief sought - First "Judgment" resolves many disputed questions of fact and partnership declaration made on delivery of second judgment - On delivery of neither were orders made giving effect to tracing type relief - Court considering what relief should be granted to give effect to judgments when application to re-open made
Dispensing power under s 14 of the Civil Procedure Act, even if available, which was doubtful, should not be exercised.Legislation Cited: Civil Procedure Act 2005
District Court Act 1973
Federal Court Act 1976
Uniform Civil Procedure Rules 2005Cases Cited: Arrowcrest Group Pty Ltd v Gill (1993) 46 FCR 90
AT v Commissioner of Police, NSW (No 2) [2010] NSWCA 337
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300
Burrell v The Queen (2008) 238 CLR 218
Deputy Commissioner of Taxation v Meredith (No 2) (2008) 75 NSWLR 462
DJL v Central Authority (2000) 201 CLR 226
Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45
Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630
French Caledonia Travel Services Pty Ltd v Elatri unreported, Federal Court, Full Court, 22 May 1992
Johnston v Nationwide News Pty Ltd (2005) 62 NSWLR 309
Landsal Pty Ltd (in Liq) v REI Building Society (1993) 41 FCR 421
Legal Practitioner Complaints Committee v A Practitioner (1987) 46 SASR 126
MK and JA Roche Pty Ltd v Metro Edgley Pty Ltd [2004] NSWSC 780
O'Toole v Charles David Pty Ltd (No 2) (1991) 171 CLR 232
R v Burrell [2007] NSWCCA 79
Smith v NSW Bar Association (1992) 176 CLR 256Texts Cited: Australian Oxford Law Dictionary Category: Separate question Parties: Geoffrey Alan Lowe (First Plaintiff)
Mary Lowe (Second Plaintiff)
Scott Pascoe (as trustee of the Estate of the late Kut Sze Tu) (First Defendant)
Margaret Sze Tu (Second Defendant)
Helen Sze Tu (Third Defendant)
Janet McNamara (Fourth Defendant)
Shiu Shing (Sunly) Sze Tu (Fifth Defendant)
Shiu How (Gordon) Sze Tu (Sixth Defendant)
Stella Sze Tu (as representative of the Estate of the late Chow Fung Chun) (Seventh Defendant)Representation: Counsel:
AA Henskens/ HR Zahra (Plaintiffs)
D Williams SC/ J Little
Solicitors:
Colin Biggers & Paisley (Plaintiffs)
Argyle Lawyers (First Defendant)
Second and Third Defendants in person
Fourth Defendant filed submitting appearance on 28 November 2008
CLS Legal (Fifth & Sixth Defendants)
Seventh Defendant filed submitting appearance on 17 April 2008
File Number(s): 2005/262284
Judgment
Introduction
This case involved a messy and difficult partnership dispute between family members and allegations that Kut Sze Tu (KST), the family patriarch, used moneys belonging to the partnership to purchase in his own name and the names of some of his children three real properties in Haig Street, Maroubra Road and Queen Street. The names of the children used varied depending on the property. Tracing-type relief was sought. That was important, if not critical. While a partnership declaration was the first step, the purchase of the three properties involved substantial sums of money, especially the Maroubra Road and Queen Street properties. Inter alia, the plaintiffs sought the winding up of the partnership.
After an extended hearing lengthy Reasons for Judgment (albeit entitled "Judgment") were delivered on 7 May 2010. The Judgment covered many matters but made one order, namely forwarding a copy of the judgment to the Australian Taxation Office. On delivering the Judgment of 7 May 2010 I adjourned the further hearing and the issue of further relief pending the Commissioner of Taxation advising whether he was considering any taxation review of the tax payable by the partnership in carrying on the businesses of WYT and YS in the Haymarket area or by the individual partners. That Judgment stated that the case still had a considerable distance to run.
I indicated that on 25 May 2010 (subsequently varied to 8 June 2010) the declarations and orders to be made at that stage would be considered. Subsequently on 25 June 2010 further Reasons for Judgment (but entitled "Judgment") were delivered. On that day I declared that the first and second plaintiffs (Geoffrey and Mary Lowe), the second to fourth defendants (Margaret Sze Tu, Helen Sze Tu, Janet McNamara), the late Kut Sze Tu and the late Chow Fung Chun were partners as from 1 August 1975 and operated the businesses of WYT (Wing Yuen Tai) and YS (Yee Sing Butchery). The shares were specified. I ordered that a copy of the Judgment be sent to the Australian Taxation Office. Orders were made as to service on the seventh defendant as to the costs orders sought.
The Judgment of 25 June 2010 envisaged that the Commissioner of Taxation would indicate his attitude by 14 September 2010. That occurred. A directions hearing was appointed for 23 September 2010 at which it was hoped to deal with as many outstanding issues as possible. The Commissioner did not propose to review the tax assessments for the years 1975 - 1989. The plaintiffs made submissions as to the relief desired in the light of my earlier judgments. The further hearing was listed to take place on 20 December 2010. On that day new counsel for the fifth and sixth defendants appeared and the Court was told that there were five books of financial material (journals) relevant to the proceedings which ought to have been discovered by the fifth defendant (Sunly). The significance of the journals was not fully appreciated at that stage. They were alleged to be in the handwriting of Mary Lowe.
I gave sundry directions and adjourned the further hearing of these proceedings to 31 January 2011. By this stage a copy of a lengthy report of Mr JJ Murray had been served on 18 January 2011. Mr Murray relied on the additional financial material emerging from the journals and reached different conclusions from those I had reached on the financial material previously before the Court. Copies of the two affidavits of Shiu Shing (Sunly) Sze Tu were served. On 1 February 2011 the following orders were made:
"1. The plaintiffs and the fifth and sixth defendants notify all other parties in writing (with a copy to the Associate to Smart AJ) by 5pm on 4 February 2011;
(a) whether they apply to reopen any of the judgments delivered by Smart AJ, and if so, identifying which judgments are sought to be reopened and in what respects;
(b) what particular findings in the judgments it is proposed be challenged prior to the making of orders;
(c) what further evidence is proposed to be relied upon in the event that leave to reopen any of the judgments is granted, and;
(d) what evidence is proposed to be relied on in the application to reopen.
1A. Additionally, the plaintiffs and the fifth and sixth defendants should notify all other parties in writing (in view of the fact that we have litigants in person) on or before 4 February 2011 with a copy to the Associate to Smart AJ:
(a) of the respects in which they apply to reopen their evidence and their case;
(b) the orders to be sought from the Court on the current evidence and findings and no reopening;
(c) and the orders to be sought from the Court if the evidence or judgments are reopened.
2. The plaintiffs notify all other parties in writing (with a copy to the Associate of Smart AJ) by 5pm on 4 February 2011 of the parts of the judgment or judgments of Smart AJ dated 7 May 2010 and 25 June 2010 that they wish to make further submissions about or to lead evidence about.
3. The fifth and sixth defendants serve any further evidence proposed to be relied upon in respect of their reopening application by 5 pm on 4 February 2011.
4. All parties (other than the fifth and sixth defendants) serve any evidence proposed to be relied upon in relation to the reopening application by 25 February 2011.
5. The fifth and sixth defendants serve any evidence in reply by 4 March 2011.
6. The proceedings be listed for hearing of the fifth and sixth defendant's reopening application for four days commencing on 15 March 2011. This includes determining whether the fifth and sixth defendants should be permitted to lead on the liability hearing the evidence that they have foreshadowed (the affidavits of the fifth defendant, the five books of account recently discovered and the affidavit evidence and report of Mr JJ Murray)."
At T 57 - 60 of 1 February 2011 there was a discussion about the terms of the orders and their effect and what the fifth and sixth defendants were proposing. They did not primarily see the exercise as setting aside or varying the existing judgments or orders but leading further evidence and making further submissions so as to complete or conclude the Court's consideration of the dispute.
Application of the fifth and sixth defendants
The fifth and sixth defendants gave this written notification pursuant to the orders made on 1 February 2011:
" ORDERS 1(a) to 1(d)
ORDER 1(a)
Whether the fifth and sixth defendants apply to reopen any of the judgments delivered by Smart AJ and, if so, which judgments are sought to be reopened and in what respects?
1. The fifth and sixth defendants seek:
a. to make further submissions on the significance or otherwise of findings currently made and reasons contained in the two Reasons for Judgment dated 7 May 2010 and 25 June 2010 currently published, (the Reasons for Judgment ) and on the appropriate relief which follows therefrom;
b. to advance the arguments set out in paragraphs 1 - 50 of their outline of submissions dated 28 January 2011 (copy attached);
c. leave to read the affidavit of Jason Murray sworn 20 January 2011 (the Murray Affidavit ), to tender the exhibit to his affidavit and the journals referred to in it (the Journals );
d. to have the Court publish further reasons for judgment dealing with the submissions made and in the course of doing so, clarifying findings already made and making any further findings which are necessary to dispose of all liability issues;
e. to proceed as paragraph 3 below;
f. to proceed per 1.a, 1.b and 1.d and 3.a to 3.c below, irrespective of whether they obtain the leave sought in 1.c, above.
2. At present there have been two Reasons for Judgment published and a final order (judgment) as to the existence of a partnership, only. No challenge is sought to be made to that order. Further orders have always been contemplated but have not yet been made. The making of further orders has been deferred until further argument following each of the first two Reasons for Judgment. There having been two sets of Reasons for Judgment, but no final orders made nor entered, it is questionable whether the course which is sought to be adopted by the fifth and sixth defendants is properly categorised as a reopening of the judgments. To the extent that it is appropriate to so categorise the matter, the fifth and sixth defendants seek to reopen the matter and/or the judgment to the extent necessary for the purposes of paragraph 1.
ORDER 1(b)
Which particular findings in the judgments are proposed to be challenged by the fifth and sixth defendants prior to the making of orders?
3. The fifth and sixth defendants:
a. seek to have the Court revisit its observations in paragraphs 569 and 570 of the Reasons for Judgment dated 7 May 2010 which purport to refer to findings made earlier in the judgment that there were breaches of an express trust created under the partnership agreement as to the three Properties (see also paragraphs 424 and 571);
b. note that there are no such findings earlier made (as far as the fifth and sixth defendants can discern). If that result is supposed to follow from paragraph 102 of the Reasons for Judgment dated 7 May 2010, there has been no finding of agency at the time of the purchase of any of the three Properties. Nor have the plaintiffs demonstrated the requisite agency;
c. seek to challenge what appears to be the implicit assumptions (see e.g. paragraphs 359(b), 360, 362, 372, 426 and 571 of the Reasons for Judgment dated 7 May 2010 and paragraphs 7(b), 8, 14 and 15 of the Reasons for Judgment dated 25 June 2010) that to the extent that any of the properties were purchased in whole or in part by monies which came from partnership receipts that:
i. KST had no entitlement to such monies;
ii. the plaintiffs had any entitlement to such monies; and
iii. the plaintiffs had established an entitlement to tracing-type relief prior to any partnership accounts having been taken, or at all.
d. seek to have the Court revisit its observations that KST received large amounts of cash from the business without disclosing them in the income tax returns or accounts of the businesses (see e.g. paragraphs 3, 215(d), 289, 295, 297, 305, 359(c), 372, 426, 433, 445(d), 462 and 565 of the Reasons for Judgment dated 7 May 2010);
e. seek to have the Court adopt the conclusions of Mr Murray;
f. accept that the course referred to in 3.d is only open if the Journals are admitted into evidence and 3.e is only open if Mr Murray's evidence is admitted into evidence.
ORDER 1(c)
What further evidence is proposed to be relied upon by the fifth and sixth defendants in the event that leave to reopen any of the judgments is granted?
4. The fifth and sixth defendants will seek to rely upon:
i. the Journals; and
ii. the Murray Affidavit and related exhibit.
ORDER 1(d)
What evidence is proposed to be relied upon in the application to reopen?
5. The fifth and sixth defendants will seek to rely upon:
i. The affidavits of the fifth defendant sworn 18 December 2010 and 31 January 2011;
ii. the Journals; and
iii. the Murray Affidavit and related exhibit."
[The Court is not sure whether the reference to the fifth defendant's affidavit of 18 December 2010 is meant to be a reference to his affidavit verifying the supplementary list of documents (SSST 1 - 5) or to his affidavit of 23 December 2010.]
" ORDERS 1A(a) to 1A(c)
ORDER 1A(a)
In what respects do the fifth and sixth defendants apply to reopen their evidence and their cases?
6. See paragraphs 1 and 2 above
ORDER 1A(b)
What orders are sought by the fifth and sixth defendants if the Court does not grant either the application to reopen the evidence or the application to reopen the Judgments?
7. The fifth and sixth defendants will seek:
i. Formulation One
a. Judgment for the fifth and sixth defendants on the balance of the proceedings.
b. Order that the plaintiffs pay the fifth and sixth defendants' costs.
ii. Alternative Formulation Two
a. As per short minutes of order attached.
ORDER 1A(c)
What orders are sought by the fifth and sixth defendants if the Court grants the application to either reopen the evidence or to reopen the Judgments?
8. As per paragraph 7 above."
The draft Short Minutes referred to in the alternative formulation in paragraph 7 of the plaintiffs' notification read:
" DRAFT SHORT MINUTES OF ORDER
1. Note that the plaintiffs have sought orders for an account or the payment of equitable compensation but have not yet made an election between these remedies.
2. Note that in respect of either an account or equitable compensation it will be necessary to determine the plaintiffs' respective entitlements in the partnership assets subject to all just allowances.
3. Order that the partnership be wound up.
4. Order that an account be taken and an inquiry held as to:
a. all the dealings and transactions of the partnership and of the said partners in relation to the said partnership;
b. what are the assets and liabilities of the partnership;
c. what are the respective interests of the said partners in the said assets;
d. whether and if so what just allowances should be made in the calculation of the respective interests of the partners in the said assets.
5. Order that an inquiry be held to ascertain whether any and, if so, how much of the assets of the said partnership to which the plaintiffs were entitled (after taking into account repayment of partners loans, capital accounts, monies provided for the purchase of the partnership businesses and all just allowances) were applied for the purchase of each of the properties at:
i. ... Haig Street ...;
ii. ... Maroubra Road ...; and
iii. ... Queen Street ...
to determine the respective interests of each of the plaintiffs in the same, or in the proceeds of sale.
6. In the event that the plaintiffs elect, by way of remedy, orders for an account order that the defendants (or such of them as the Court thinks fit) pay or transfer to the plaintiffs such amount as may be found due upon on the taking of accounts and inquiry referred to in order 4 and 5 above and after taking into account all just allowances.
7. In the event that the plaintiffs seek orders for the payment of equitable compensation, there be an inquiry as to the amount of equitable compensation properly payable to each of them and by whom after taking into account all just allowances.
8. Further declarations and orders be deferred pending the accounts and inquiries referred to herein.
9. Directions for the filing and serving of further evidence as to the accounts and inquiries referred to above."
Jurisdiction
At the commencement of the hearing on 15 March 2011 the plaintiffs took these preliminary points as to the Court's jurisdiction:
- Without making an appropriate application to reopen the May or June 2010 judgments, further evidence cannot be led in support of submissions as to the orders or declarations which flow from the judgments.
- The Court has no jurisdiction to entertain an application to vary the May or June 2010 judgments. [The plaintiffs concentrated on the May 2010 judgment and the partnership declaration of 25 June 2010.]
The fifth and sixth defendants at no stage filed a motion pursuant to UCPR rule 36.16(1) or (3A) seeking to set aside or vary a judgment or order. I did not require a formal motion to be filed. Instead, the Court required a written notification as per its orders of 1 February 2011.
The fifth and sixth defendants did not accept that there had to be an application to reopen either judgment having regard to the course of the proceedings, as the Court had not concluded its consideration of the matter. The fifth and sixth defendants would need to apply to reopen their evidence to allow the further financial material (the five journals) and Mr Murray's report to be received as the evidence led at the extended hearing had concluded. The fifth and sixth defendants sought to reopen the Judgments of May and June 2010 if that should be found necessary, but that was not their primary position.
Two inter-related issues arise for consideration:
1) the status and effect of the Judgment delivered on 7 May 2010 and the partnership declaration; and
2) had the Court, in delivering its judgment of 7 May 2010 and the partnership declaration of 25 June 2010, concluded its consideration of the controversy?
(a) There is no helpful definition of "judgment" in the Civil Procedure Act 2005. There is no definition of "judgment" in the Dictionary to the UCPR. The Australian Oxford Law Dictionary defines "judgment" as:
"The court's order or finding in the determination of any legal proceeding ..."
(b) The Federal Court Act 1976 and the District Court Act 1973 section 4 each contain a definition of judgment. They merely provide illustrations of the use of the term "judgment".
(c) Section 133(1) of the Civil Procedure Act states:
"A judgment or order of the court may not be enforced until it has been entered in accordance with the uniform rules."
The converse is that once a judgment is entered it is enforceable by the party. In the present case, while the first step has been taken with the making of the partnership declaration, no sum or amount has been stated as payable. There has been no statement of what rights the parties can claim pursuant to the partnership, such as compensation.
In some instances the abbreviated word "Judgment" is used where the fuller version would be apt, i.e. "Reasons for Judgment". See Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45 at 64 per Barwick CJ and Kitto J.
Both parties referred to O'Toole v Charles David Pty Ltd (No 2) (1991) 171 CLR 232 at 245 (per Mason CJ) and 260 (per Brennan J) accepting the remarks of Diplock LJ in Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 at 642 that, where the issue separately determined is not decisive of the suit and the judgment upon that issue is an interlocutory one, the parties to the suit are bound by the determination of that issue.
I was also referred to Johnston v Nationwide News Pty Ltd (2005) 62 NSWLR 309 in which it was held that a reference or refusal of a reference under the District Court Act , s 203 (reference to the Supreme Court where it is alleged or appears that a person is guilty of contempt) is not a judgment or order in an action pursuant to the District Court Act s 127(1) and there is no right of appeal from refusal of an order thereunder to the Court of Appeal. Spigelman CJ said at [29]:
"The issue of whether or not a decision or ruling by a court is a judgment or order, for purposes of appeal provisions, has arisen in many different contexts. The general thrust of the case law on the matter is that there must be an operative judicial act."
This case does not deal with appeal provisions. Spigelman CJ relied on the remarks of King CJ in Legal Practitioner Complaints Committee v A Practitioner (1987) 46 SASR 126 at 127. King CJ distinguished judgments and orders on the one hand from incidental rulings given in the course of the hearing and determining questions raised for decision.
I would not regard the factual decisions made in the judgment of 7 May 2010 as incidental rulings as that phrase is used by King CJ. The plaintiffs submitted that the Court should now proceed and settle the remainder of the relief to be granted limiting all parties to submissions based on the terms of the Judgment of 7 May 2010 and the partnership declaration of 25 June 2010.
Johnston was a case where the primary judge had completed his consideration of the application for a reference and the question was whether his refusal was appellable. That differs from the present case where the Court has not completed its consideration of the case. In my opinion the Court should complete its consideration of the present case.
Bases of application - fifth and sixth defendants
The fifth and sixth defendants stated that they were seeking to invoke the inherent jurisdiction of the Court. It has been recognised over the years that until an order is entered or perfected or authenticated by being passed and entered that the Court has an inherent power to reopen a hearing, inter alia, for the purpose of reviewing and varying reasons for judgment before any judgment or order has been entered (see, for example, per Mason CJ in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 301, Smith v NSW Bar Association (1992) 176 CLR 256 at 265, DJL v Central Authority (2000) 201 CLR 226 at [34] - [38], MK and JA Roche Pty Ltd v Metro Edgley Pty Ltd [2004] NSWSC 780 and Burrell v The Queen (2008) 238 CLR 218).
Mason CJ in Autodesk pointed out at 301 - 302 that the exercise of the jurisdiction to reopen a judgment and to grant a rehearing is not confined to circumstances in which the applicant can show that by accident and without fault on the applicant's part he or she has not been heard, that the jurisdiction is to be exercised with great caution having regard to the importance of the public interest in the finality of litigation and that generally speaking the jurisdiction will not be exercised unless the applicant can show that by accident, without fault on his part, he has not been heard.
At 302 Mason CJ continued:
".. the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that, in its earlier judgment, it has proceeded on a misapprehension as to the facts or the law."
Such a jurisdiction does not exist when the court has entered or perfected or authenticated the judgment.
The plaintiffs relied strongly on UCPR r 36.11 and r 36.16 based on the view that what was published on 7 May 2010 amounted to a judgment containing operative judicial acts and that on 25 June 2010 in accordance with the May 2010 Judgment there was an operative judicial act in that a declaration of partnership was made and the Court continued, subject to any fresh facts emerging from the taxation review, to consider what relief was apt at that stage.
The fifth and sixth defendants in their primary approach challenged these contentions and submitted that r 36.11 and r 36.16 did not govern the situation as the Court had not concluded its considerations of the controversy and had left significant matters to be dealt with.
In Deputy Commissioner of Taxation v Meredith (No 2) (2008) 75 NSWLR 462 Basten JA traced the history at [8] of the entry of orders and the power of the court to review what it had done. See also paragraph 13 of his judgment in AT v Commissioner of Police, NSW (No 2) [2010] NSWCA 337 at [9] and [13].
UCPR r 36.11 relevantly provides:
"(1) Any judgment or order of the court is to be entered.
(2) Unless the court orders otherwise, a judgment or order is taken to be entered when it is recorded in the court's computerised court record system.
...
(3) In this rule, a reference to a judgment or order of the court includes a reference to any judgment, order, determination, decree, adjudication or award that has been filed or registered in the court, or of which a certificate has been filed or registered in the court, as referred to in section 133 (2) of the Civil Procedure Act 2005 "
The Supreme Court in its various divisions uses a computerised court record system.
Rule 36.16 relevantly provides:
"(1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.
...
[Sub-rule (2) is of no present relevance.]
(3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it:
(a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or
(b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief.
(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.
(3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered.
(3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B).
(4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order."
Sub-paragraphs (3A), (3B) and (3C) came into operation on 7 September 2007. They did not appear in r 36.16 at the time the Court of Criminal Appeal delivered its judgment on 16 March 2007 in R v Burrell [2007] NSWCCA 79. The plaintiffs submitted that these sub-paragraphs (or rules) apply to the present proceedings. That appears to be correct.
UCPR 36.16 appears to have been made under s 9 of the Civil Procedure Act 2005. See s 9(2) and Schedule 3, clause 23.
Section 5 of that Act provides:
"(1) Nothing in this Act or the uniform rules limits the jurisdiction of the Supreme Court.
(2) Nothing in the uniform rules extends the jurisdiction of any court except to the extent to which this Act expressly so provides."
While I accept that the inherent jurisdiction of the Supreme Court is not confined, the Rules make specific provision for the entry of judgments and orders and state when they are taken to be entered. The Rules purport to provide a period of 14 days after entry of the judgment during which application may be made to set aside or vary judgments or orders as if they had not been entered.
In the present case the computerised record system contains:
"07 May 10 - Judgment - Acting Justice R Smart
...
Verdict Order or Direction
Reasons for judgment published
I order that a copy of this judgment be sent to the Australian Taxation Office and that the proceedings be adjourned to 25 May 2010 at 10 am or such other date as may be arranged with my Associate."
"25 June 10
...
Recorded order:
I make the following declaration and orders and give the following directions:
1. A declaration that the first and second plaintiffs (Geoffrey and Mary Lowe) the second to fourth defendants (Margaret Sze Tu, Helen Sze Tu, Janet McNamara) the late Kut Sze Tu and the late Chow Fung Chun were partners as from 1 August 1975 and operated the businesses of Wing Yuen Tai and Yee Sing Butchery pursuant to a partnership in the following shares:
(a) the first plaintiff as to a 10 per cent share
(b) the second plaintiff as to a 10 per cent share
(c) the second defendant as to a 10 per cent share
(d) the third defendant as to a 10 per cent share
(e) the fourth defendant as to a 10 per cent share
(f) the late Kut Sze Tu as to a 20 per cent share
(g) the late Chow Fung Chun (also known as the late Fung Chun Sze Tu) as to a 30 per cent share
2. An order that a copy of this Judgment be sent to the Australian Taxation Office.
3. Direct the solicitors for the plaintiffs to serve a copy of this Judgment on the solicitors for the seventh defendant within 14 days and to advise such solicitors what order as to costs it seeks against the seventh defendant as the representative of the estate of the late FC Chow.
4. Direct the seventh defendant to advise in writing on or before 9 August 2010 the solicitors for the plaintiffs and all defendants (or their solicitors if they are represented) whether she proposes to be represented at the further hearing as to costs and deliver a copy of her submissions as to costs to each other party and to my Associate.
5. Order the proceedings be listed for further directions on 23 September 2010 at 9.30 am. (I have substituted that date because the further hearing scheduled for 25 May 2010 did not occur until 8 June 2010. On 23 September 2010 I would hope to be told whether there will be a taxation review, and if there is, how long it will be expected to take. In my Judgment of 7 May 2010 I had envisaged that the ATO and the Commissioner would be able to advise the parties by 31 August 2010 what was proposed to be done (paragraph 588). In view of the date for a directions hearing being extended to 23 September 2010, I would hope that the Commissioner and the ATO would be able to advise the parties by 14 September 2010 as to the proposed course of action. There is no objection to any of the parties or their solicitors contacting the Australian Taxation Office in an endeavour to ascertain what course it proposes to follow. At the directions hearing on 23 September 2010 the Court would hope to deal with as many outstanding issues as possible.)"
In Burrell v The Queen , supra, after the NSW Court of Criminal Appeal had delivered judgment and orders reflecting its judgment had been entered, the Court realised that it had proceeded on an incorrect understanding of the facts giving rise to the appeal. It was held that the Court of Criminal Appeal had no powers to reopen an appeal once judgment had been delivered and orders reflecting judgment had been formally entered.
At [18] - [19] five Justices held:
"18 The formal recording of the orders of a superior court of record is often referred to as the "perfecting" of that order. Whether a court may reopen a proceeding and reconsider the order that has been pronounced is often described as hinging about whether the order has been "perfected". This use of terminology must not be seen as giving form and procedure precedence over substance and principle. The questions that arise in this matter must depend for their answer not upon what forms and solemnities have been observed but upon how effect is to be given to the principle of finality. In particular, what is to mark the point at which a court concludes its consideration of a controversy?
19 The end of a court's powers to consider and determine a controversy cannot depend upon whether one party asserts that the court has made some error in the conclusion it has reached. If allegation of error in the court's orders were the criterion, there would never be an end to some disputes. And because one party's assertion of error cannot provide a sufficient criterion, a court's belief that it has recognised its own mistake can provide no useful criterion ..."
The Justices observed that the propositions expounded (which included some further propositions) were not challenged. At 225 [22] the Justices continued:
"... Rather, the accepted premise for the debate was that formal recording of the orders of the Court of Criminal Appeal ordinarily does mark the end of that Court's power to consider the issues which were tendered in the proceedings that yielded those orders. Hence the expression of the question for this Court as whether the Court of Criminal Appeal had power to reopen the appellant's appeals and reconsider its orders ..." (emphasis in original)
The plaintiffs concentrated on the judgment of 7 May 2010. I did not regard that as concluding the Court's consideration of the controversy. The relief to be granted was important. That had not been resolved although I had endeavoured to resolve many of the factual issues. I thought that the parties had led all the evidence they desired and while some further evidence may emerge from taxation review by the ATO, I anticipated that after delivering the judgment of 7 May 2010 I would hear detailed submissions from the parties as to the relief which the Court should grant at that stage. On being appraised that there was to be no taxation review it became necessary to focus closely on the terms of any relief to be granted. Such relief has not been resolved to date.
In Arrowcrest Group Pty Ltd v Gill (1993) 46 FCR 90 French J, with whom Jenkinson and Spender JJ agreed, referred with evident approval to what the Full Federal Court said in Landsal Pty Ltd (In Liq) v REI Building Society (1993) 41 FCR 421:
"If, in the exercise of his inherent jurisdiction, a judge decides to conduct a trial in separate parts, there is no requirement that he make an order reflecting the conclusions he has reached part way through the hearing. Whether a judge in exercising this particular jurisdiction has reached a conclusion on some of the issues part way through the task, which can be immediately made the subject of an appeal, depends upon whether he has either formally incorporated those conclusions in an order or can be seen to have intended to have done that. If in such a case it can be seen that the judge did not intend to make an order reflecting conclusions he has reached part way through conducting the trial of a matter, then there is nothing that can be the subject of an appeal, whether by leave or as of right."
See also French Caledonia Travel Services Pty Ltd v Elatri unreported, Federal Court, Full Court, 22 May 1992 (Lockhart, Gummow, Foster JJ).
Section 14 Civil Procedure Act 2005
This section reads:
"In relation to particular civil proceedings, the court may, by order, dispense with any requirement of rules of court if satisfied that it is appropriate to do so in the circumstances of the case."
This section was relied on by the fifth and sixth defendants in the alternative.
In AT v Commissioner of Police, NSW (No 2) , supra, at [9], [10] and [13] Basten JA said:
"9 Although the possibility of reliance on s 14 was also noted in Spina v Permanent Custodians Ltd (No 2) [2009] NSWCA 419 at [9], the difficulty with such an approach is that the course permitted by s 14 must act differentially, so as to remove the time limit and leave an unlimited power in the Court to vary orders which have been entered. Because r 36.16 itself precludes the operation of r 1.12, which might otherwise allow the Court to extend the time, this would constitute a rewriting of r 36 in a way clearly not envisaged by its terms: cf r 36.16(3C).
10 Nor is it possible to omit the whole of the rule, because then one would be left with the general law, which does not permit a court, absent statutory authority, to vary orders once they have been entered: DJL v Central Authority [2000] HCA 17; 201 CLR 226 at [38]-[40], referring to Baley v Marinoff [1971] HCA 49; 125 CLR 529 at 530. In Malouf v Prince (No 2) [2010] NSWCA 51 at [20], the Court (McColl and Macfarlan JJA, Nicholas J) referred to a statement in Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; 239 CLR 75 at [23] where French CJ, Gummow, Hayne and Crennan JJ stated:
'It is no doubt arguable that the reference to 'any requirement of rules of court' in s 14 limits its application to rules imposing some duty on parties and does not extend it to a rule imposing limitations on the power of the court to order costs.'
...
13 It should be added that the 'stringency' of the present rule is a result of orders being 'entered' by recording them in the computerised record system of the Court, immediately that judgment is delivered. In the past, a party seeking to enforce an order would be required to "take it out", which involved a deliberate process giving rise to the order being entered in the Court record. There was usually an opportunity for a party concerned that the order did not properly reflect the judgment, or for other reasons, should not be made in the form found in the judgment, to raise the issue before the Court. That opportunity is no longer available. The rule is a trap for unrepresented litigants; even the legal profession appears to have been slow to realise the time constraint imposed. Nevertheless, the rule itself constitutes an amelioration of the position under the general law."
One of the difficulties faced by Sunly and Gordon is that the plaintiffs, by their solicitors, kept pressing for complete discovery. The obligations to make a thorough search and give complete discovery were raised before, and frequently during, the trial.
Gordon was cross-examined about discovery and made a further affidavit in July 2009. Sunly's cross-examination continued in July 2009. There was then a gap until 24 August 2009 when the plaintiffs' case in reply commenced. Addresses took place between 7 - 9 October 2009. Written submissions closed 23 December 2009.
Sometime in late 2007, when Sunly was representing himself, he found two accounting books being SSST 2 (cash book for YS 7/7/78 - 3/10/80) and SSST 3 (cash book for WYT 10/8/75 - 30/6/78). Sunly has stated that he showed the two books to Margaret, that Margaret said that the writing was that of Mary, that a few days later Margaret and Helen came to his home. Either Helen or Margaret said, "We already have a few books with Mary's handwriting. They go all the way from the beginning of the business to the closure of business. You have some of the years only. This is not a complete set. I don't understand it. You don't understand it. I see it's best not to bring these out."
Margaret and Helen did not deny sighting SSST 2 and SSST 3 and discussing them with Sunly. Helen examined these books. Margaret and Helen did deny the remarks Sunly attributed to them to the effect that it was best not to bring these books out.
Margaret and Helen returned the two books to Sunly. He said that he placed those books in a suitcase with the rest of the papers relating to this case. He later removed the books. He did not give these two books to his solicitor. Sunly next saw the two books on 6 October 2009 in the bottom drawer of a cabinet which formed part of his office desk in his garage.
Sunly said that on 7 October 2009 he took the books to his then barrister. Counsel advised Sunly in the presence of Margaret and Helen that it was too late and the books could not be used at that stage. Sunly also spoke to the solicitor who had the day to day running of the case. She re-stated counsel's advice.
Sunly said that during the second week of February 2010 he was cleaning out his garage. He picked up a cardboard box and the bottom gave way. The contents included SSST 1 (cash book for YS 14/8/75 - 30/6/78), SSST 4 (cash book for WYT 10/7/78 - 7/10/80) and SSST 5 (cash book for WYT 12/5/78 - September 1980). Sunly said he spoke to the lady solicitor and said that he wanted to use the green ledgers (cash books or journals). She replied that the case was closed. On the recommendation of his employer Sunly sought other legal advice. He saw his new solicitor on 8 December 2010.
To help explain why complete discovery was not given earlier, Sunly has annexed photographs of the contents of the garage at Haig Street. The photographs reveal that there were a large number of items stored in the garage. There was a jumble of items and materials including many boxes.
Having regard to the facts, no case has been made out for the Court to exercise its powers under s 14 of the Civil Procedure Act 2005, even if it was able to do so. I have borne in mind the comments of Basten JA.
General
At this point I am confined to the question whether the Court had completed its consideration of the controversy. I answer that question in the negative. I have not made final orders. The fifth and sixth defendants do not seek to challenge the declaration of partnership of 25 June 2010.
I am conscious of the importance of the principle of finality and the public interest in the finality of litigation. I have deliberately not determined the question whether the fifth and sixth defendants should be permitted to reopen the matter by reopening the evidence and relying on further limited evidence, namely the SSST 1 - 5 (the five journals or cash books) and Mr Murray's report. On the view I have taken it is not a question of reopening final judgments or orders and I do not think that r 36.11 and r 36.16 apply except as to the partnership declaration.
I would overrule the objection to jurisdiction. This does not mean that I would allow the fifth and sixth defendants to lead further evidence. That remains to be determined.
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Decision last updated: 09 August 2011
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