McHugh v Eastern Star Gas Ltd (No 2)

[2012] NSWCA 419

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

McHugh & Anor v Eastern Star Gas Ltd & Ors (No 2) [2012] NSWCA 419

Hearing dates:

22 May 2012

Decision date:

14 December 2012

Before:

Bathurst CJ at [1]; Macfarlan JA at [16]

Decision:

1 The applicants file a Notice of Appeal within 7 days of the making of these orders.

2 The cross-application is dismissed.

3 Eastern Star Gas Ltd is to pay the costs of the cross-respondents of the cross-application.

4 Order (vii) of the orders made by R S Hulme J on 3 June 2011 be set aside.

[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:

PROCEDURE - entry of judgments and orders - application to set aside or vary orders - UCPR r 36.17.

Legislation Cited:

Supreme Court Act 1970 s 45AA
Uniform Civil Procedure Rules 2005 r 36.17

Category:

Consequential orders

Parties:

Michael Robert McHugh (First Applicant/1st Cross Respondent)
ACN 109 532 630 Pty Ltd (Second Applicant/2nd Cross Respondent)
Eastern Star Gas Ltd (First Respondent/Cross Applicant)
Ronald Von Harten (Second Respondent)
Dean Von Harten (Third Respondent)
Steven Charles Grammer (Fourth Respondent/3rd Cross Respondent

Representation:

A.P. Cheshire, A. Kaufmann (Applicants/ 1st & 2nd Cross Respondents)
R.C. Scruby (First, Second & Third Respondents/Cross Applicant)
HWL Ebsworths (Applicants/ 1st & 2nd Cross Respondents)
Piper Alderman (First, Second & Third Respondents/Cross Applicant)

File Number(s):

2010/039033

Publication restriction:

No

 Decision under appeal 

Jurisdiction:

9111

Citation:

[2011] NSWSC 513

Date of Decision:

2011-06-03 00:00:00

Before:

R S Hulme J

File Number(s):

2010/039033

Judgment

1. BATHURST CJ: The primary judgment in this matter was delivered by the Court on 8 June 2012.

1. The proceedings, in broad terms, concerned a claim that in purporting to act for a company, Namoi Valley Aquafarming Pty Ltd ("NVAF") in proceedings in the Mining Warden's Court against the first respondent, Eastern Star Gas Ltd, the applicants were acting without retainer and as a consequence were liable to pay the costs incurred by Eastern Star Gas and two of the directors of NVAF, Mr Dean Von Harten and Mr Ronald Von Harten, in connection with the Mining Warden's Court proceedings.

1. R S Hulme J found in favour of Eastern Star Gas and the Von Hartens. The applicants sought leave to appeal and leave was granted and the appeal upheld. Whealy JA, with whom Macfarlan JA and I agreed, found that Mr McHugh was retained throughout the proceedings. His reasoning was summarised in par [93] of his judgment, to the following effect:

"[93] In any event, I have come to the conclusion that there is nothing in the circumstances of the present matter that would warrant taking the extreme step of ordering the solicitor to pay costs in a case in which, as was conceded, s 99 does not apply. First, this is not a case involving a 'person of straw'. Secondly, it is an unusual case in that Eastern Star has agreed that the proceedings brought by NVAF against it ought to be dismissed, but it does not seek an order for costs against NVAF. Thirdly, there is no analogy in the present circumstances to those that led to the making of a costs order against a third party in Knight v FP Special Assets Ltd [1992] HCA 28; 174 CLR 178: see also Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; 239 CLR 75. Fourthly, the conduct of Mr McHugh does not warrant an order being made. Reviewing each of the periods when he was involved, it may be observed that in the first period Mr McHugh was entitled to believe he was authorised because he had been retained by Mr Grammer and his fees were paid by NVAF. In the second period (29 March to 25 May 2009) the proceedings were continued with the express authority of the company. The mere fact that he may have done more work in this period than was expressly contemplated by the 29 March meeting would not have entitled Eastern Star to an order for costs against him, as distinct from NVAF seeking a remedy, if it were otherwise proper to do so. In the final period, after 25 May 2009, the position is really the same. Mr McHugh's retainer was still on foot and there could be no valid suggestion that it had been terminated. True it is, he may have carried out work that exceeded his instructions. This may have entitled NVAF to seek a remedy against him in appropriate circumstances. It does not appear to me to be sufficient to make Mr McHugh liable to pay the costs of the other party."

1. In consequence the orders pronounced on 8 June 2012 were made.

1. Subsequent to the delivery of the judgment the applicants made further submissions to the effect that the Court, in pronouncing its orders, had overlooked a number of matters consequential upon the reasons for judgment. They submitted that the fact that these matters were overlooked was an error, that could be addressed pursuant to r 36.17 of the Uniform Civil Procedure Rules.

1. Eastern Star Gas and the Von Hartens submitted to any further orders the Court may make consequent upon the additional submissions made by the applicants save for any order as to costs.

1. Each of the applicants, Eastern Star Gas Ltd and the Von Hartens, also agreed to the matter being dealt with by Macfarlan JA and myself, pursuant to s 45AA of the Supreme Court Act 1970 consequent upon the retirement of Whealy JA. They also agreed to the matters being dealt with on the papers.

1. The applicants' submissions raise three matters which I will deal with in turn.

Order (vii) made by R S Hulme J

1. For relevant purposes, R S Hulme J made the following orders:

"(iv) Order Michael McHugh and The Law Company Pty Ltd to pay 50% of the costs of Ronald and Dean Von Harten of and incidental to their motion filed on 23 June 2009 in the Narrabri Mining Warden's Court, such costs to be paid on an indemnity basis;

...

(vii) Order Michael McHugh and The Law Company Pty Ltd to pay, in addition to the amount ordered in (iv) above, 50% of the costs of Ronald and Dean Von Harten of and incidental to their motion filed on 23 June 2009 in the Narrabri Mining Warden's Court, such costs to be paid on a party and party basis."

1. Order (iv) of the orders of R S Hulme J was set aside on the appeal (see Order 4 of the orders made on 8 June 2012). However, Order (vii) was not. It seems to me to flow from the judgment that that order should have been set aside and that the failure to do so was an error within the meaning of UCPR r 36.17. Accordingly, I would set aside that order.

The cross-application

1. By a cross-application filed in the proceedings, Eastern Star Gas sought an order that in the event the Court "re-exercised its discretion" in relation to costs, the Court should order the cross-respondents (applicants) to pay its costs of the Mining Warden's proceedings on an indemnity basis from 25 May 2009.

1. By an oversight this cross-application was not dealt with in the Court's judgment of 8 June 2012. It follows from the reasons of the Court that it should be dismissed with costs.

Costs of the appeal

1. Eastern Star Gas was ordered to pay the applicants' costs to the appeal. However, no order for costs was made against the Von Hartens. The applicants submit that this was an error or oversight.

1. I do not believe that the failure to make such an order was an oversight. Although it is true that the Von Hartens were parties to the appeal and jointly represented with Eastern Star Gas, the litigation primarily related to the costs of Eastern Star Gas rather than the costs of the motion. In those circumstances I do not think that the failure to order costs against the Von Hartens could be said to be an error or oversight.

1. Accordingly, I would make the following additional orders to those made on 8 June 2012. The first of these orders is simply to formalise the record, the balance to take account of the reasons in this judgment:

1 The applicants file a Notice of Appeal within 7 days of the making of these orders.

2 The cross-application is dismissed.

3 Eastern Star Gas Ltd is to pay the costs of the cross-respondents of the cross-application.

4 Order (vii) of the orders made by R S Hulme J on 3 June 2011 be set aside.

1. MACFARLAN JA: I agree with Bathurst CJ.

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Decision last updated: 18 December 2012