Michael Wilson & Partners Ltd v Porter (No 2)

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FEDERAL COURT OF AUSTRALIA

Michael Wilson & Partners Ltd v Porter (No 2) [2022] FCA 901

File number: NSD 767 of 2021
Judgment of: STEWART J
Date of judgment: 3 August 2022
Catchwords: PRACTICE AND PROCEDURE – principle of finality – application to reconsider orders previously pronounced and entered – r 39.05(c) of the Federal Court Rules 2011 – grounds for reconsideration – whether applicant was denied sufficient opportunity to be heard on the matters in question – no denial – no basis to reconsider orders – application dismissed
Legislation:

Federal Court of Australia Act 1976 (Cth) s 37M

Federal Court Rules 2011 (Cth) rr 17.01(3), 39.05
Cases cited:

AIC Ltd v Federal Airports Authority of Nigeria [2022] UKSC 16; [2022] 1 WLR 3223

Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (No 2) [2013] HCA 44; 303 ALR 84

D’Orta-Elenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1

Green v Ellul (No 3) [2019] SASCFC 23; 132 SASR 364

Keung v Abbott (No 2) [2019] SASCFC 39

Michael Wilson & Partners Ltd v Porter [2022] FCA 336

Nyoni v Murphy and Others [2018] FCAFC 75; 261 FCR 164

Porter, in the matter of Slater (No 3) [2021] FCA 688

Professional Administration Service Centres Pty Ltd v Commissioner of Taxation [2012] FCAFC 180; 295 ALR 52

Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; 186 CLR 622
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 51
Date of hearing: 15 July 2022
Date of last submissions: 29 July 2022
Counsel for the Applicant: M E Wilson
Counsel for the Respondents: S Golledge SC and N Bailey
Solicitor for the Respondents: Mills Oakley

ORDERS

NSD 767 of 2021
BETWEEN:

MICHAEL WILSON & PARTNERS LTD

Applicant
AND:

JASON LLOYD PORTER

First Respondent

RICHARD MORETTI

Second Respondent

ORDER MADE BY:

STEWART J

DATE OF ORDER:

3 AUGUST 2022

THE COURT ORDERS THAT:

1.The applicant’s interlocutory application dated 5 May 2022 be dismissed.

2.Orders 7 and 8 of 1 April 2022, which were vacated by order 1(a) on 3 June 2022, be reinstated as follows:

(a)within 14 days of these orders, the applicant file and serve any affidavit constituting a costs response in accordance with paragraphs 4.13 to 4.14 of GPN-COSTS.

(b)within 7 days of service of any affidavit by the applicant, the parties file and serve any submissions (not exceeding five pages) in support of their respective positions.

3.Within seven days of these orders, the respondents file and serve written submissions of no more than two pages in support of any order that they seek in relation to the costs of the interlocutory application referred to in order 1.

4.Within seven days of service on it of the submissions referred to in order 3, the applicant file and serve written submissions of no more than three pages in support of any order that it…

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Details
Case
[2022] FCA 901
Decision Date

CaseChat Overview and Summary

Michael Wilson & Partners Ltd (MWP) sought to have certain interlocutory orders reconsidered, arguing it had not been given a sufficient opportunity to be heard. The orders in question related to the costs of a security for costs application and lump-sum costs orders. The Federal Court was required to determine whether MWP was denied a sufficient opportunity to present its case, which is a permissible ground for reconsideration under r 39.05(c) of the Federal Court Rules 2011. The court noted that while Mr Wilson, representing MWP, had attempted to address the court on the matter of costs, he was not allowed to do so. The court found that MWP, not Mr Wilson, was the applicant and that Mr Bennett, MWP's representative, had been present and had not objected to the costs orders. The court held that there was no denial of a sufficient opportunity to be heard and dismissed the application.

The court's reasoning was grounded in the principle of finality, which discourages reopening of interlocutory orders unless there are exceptional circumstances. The court referred to previous cases which emphasised the limited circumstances in which interlocutory orders could be reconsidered. The court held that the applicant's argument did not meet the threshold for reconsideration as there was no misapprehension of facts or law on the part of the court that could not be attributed to the applicant's neglect or default. The application was dismissed, and the previous orders were reinstated.

Orders

Orders of the court

1. The applicant’s interlocutory application dated 5 May 2022 be dismissed.

2. Orders 7 and 8 of 1 April 2022, which were vacated by order 1(a) on 3 June 2022, be reinstated as follows:

(a) within 14 days of these orders, the applicant file and serve any affidavit constituting a costs response in accordance with paragraphs 4.13 to 4.14 of GPN-COSTS.

(b) within 7 days of service of any affidavit by the applicant, the parties file and serve any submissions (not exceeding five pages) in support of their respective positions.

3. Within seven days of these orders, the respondents file and serve written submissions of no more than two pages in support of any order that they seek in relation to the costs of the interlocutory application referred to in order 1.

4. Within seven days of service on it of the submissions referred to in order 3, the applicant file and serve written submissions of no more than three pages in support of any order that it seeks in relation to the costs of the interlocutory application referred to in order 1 and in response to the respondents’ submissions.

5. Within seven days of service on them of the submissions referred to in order 4, the respondents file and serve written submissions of no more than two pages in reply.

6. The costs of the interlocutory application referred to in order 1 be determined on the papers.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

At the outset it must be borne firmly in mind that the question is whether MWP, not Mr Wilson, was given a sufficient opportunity to present its case to me on the two matters in question, namely the costs of the security for costs application and the lump-sum costs orders. Mr Wilson’s submissions at times elide the distinction between him and his company.The facts A few days before the hearing on 1 April 2022, Mr Wilson advised my chambers by email that Mr Bennett would be appearing for MWP, in person, to deal with the application for leave to appeal and that “Mr Wilson of MWP will also be appearing by AVL, and seeks permission to deal with compliance with the notice to produce … and then the related [security for costs] application, remotely, if the latter is still pursued”. When the matter was called on 1 April 2022, Mr Bennett, appearing in court, announced that he appeared for MWP with Mr Tokley QC in Adelaide and Mr Thomas in Canberra. Mr Bennett then added:but I appear with my instructing solicitor, MR WILSON, who appears electronically from Kazakhstan when we have the connection established. I propose to deal with the application for leave to appeal and extension of time. Mr Wilson will deal with our opposition to the application for security for costs and with a notice to produce. I indicated that I would hear argument on the leave to appeal application first, and at the end of that process I would be in a position to indicate how the matter would proceed, particularly with regard to the security for costs application. I then heard oral submissions from Mr Bennett, then from Mr Golledge SC for the respondents, and Mr Bennett in reply. The following exchange then occurred: HIS HONOUR: Yes. Mr Bennett, if I’m against you and refuse leave to appeal, what do you say about costs and also the costs of the security for costs application?MR BENNETT: Well, your Honour - - -HIS HONOUR: The costs must follow the result, presumably.MR BENNETT: They would, your Honour.HIS HONOUR: Yes.MR BENNETT: And then the security for costs application would be moot.HIS HONOUR: Yes. Yes, thank you, Mr Bennett.MR WILSON: Your Honour, Mr Wilson. If I just may make one point.HIS HONOUR: No, Mr Wilson; you may not. Mr Bennett is here on his feet representing the company. Yes. I will give judgment on the application for leave to appeal at 2 o’clock and, if necessary, hear the security for costs application at that time. The Court then adjourned. It resumed at 2.00pm. I delivered ex tempore reasons and pronounced the following orders:(1)The application for an extension of time be dismissed;(2)Leave to appeal be refused;(3)The respondents’ application for security for costs be dismissed;(4)The proceeding be dismissed with costs, such costs to include all the costs of the proceeding. At that point, Mr Golledge rose to his feet and applied from the Bar that the costs be assessed on a lump-sum basis and for a timetable to that end. Mr Bennett made no submission against the costs being assessed on a lump-sum basis. In discussing a timetable for that process, it became apparent that Mr Bennett had not appreciated that the costs order included the security for costs application. The following is the relevant extract from the transcript: MR BENNETT: … But I assume that would permit us to argue against the making of an order for costs of the security for costs application.HIS HONOUR: No. I’ve made that order already. MR BENNETT: I’m sorry, your Honour. I thought that was the issue which needed – we haven’t been heard on the question of – we would wish to submit that, that application having become moot, the appropriate would be no order as to costs in relation to the - - -HIS HONOUR: Well, I raised that before we adjourned earlier. I raised that very specific question. But I will withdraw my order in relation to the costs on the security for costs application and hear you right now. …

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

In Professional Administration Service Centres Pty Ltd v Commissioner of Taxation [2012] FCAFC 180; 295 ALR 52 at [53], Edmonds, McKerracher and Nicholas JJ explained that:It is well-established that the discretion conferred by r 39.05 of the Federal Court Rules (formerly O 35 r 7(2)) to set aside interlocutory orders once entered should be exercised in a judicial manner and only in exceptional circumstances: Dudzinski v Centrelink [2003] FCA 308 at [11]. This guideline is based on the principle of finality of litigation which counsels courts to exercise caution when considering whether orders previously made and final on their face and entered should be reopened for consideration and set aside: McDermott v Richmond Sales Pty Ltd (in liq) [2006] FCA 248 at [25]; Kullilli People No 2 and Kullilli People No 3 v Queensland [2007] FCA 512 at [17].(Emphasis added.) In Nyoni v Murphy and Others [2018] FCAFC 75; 261 FCR 164 at [46], Barker, Banks-Smith and Colvin JJ explained that r 39.05 “is not a vehicle for an appeal, nor an alternative to an appeal process” and that it “does not provide a means to revisit the correctness of a reasoning process”. It is common ground that an instance in which interlocutory orders can justifiably be reconsidered under r 39.05(c) is if a party was not given sufficient opportunity to present its case to the court on the subject of the orders. That is in accordance with the High Court’s consideration of its own jurisdiction to recall orders in Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd (No 2) [2013] HCA 44; 303 ALR 84 in which the following was said (omitting footnotes):13All members of the court in Autodesk (No 2) [[1993] HCA 6; 176 CLR 300] accepted that this court may recall orders which it has made disposing of an appeal if those orders were made against a party who, without fault on the part of that person, has not had an opportunity to be heard as to why those orders should not be made. More particularly, it was accepted that this court may recall its orders if they were made on a ground which the person against whom the orders were made had no opportunity to argue.…15This court divided in opinion in Autodesk (No 2) about whether the jurisdiction to recall this court’s orders extended beyond cases where a party was not given an opportunity to be heard on an issue held to be determinative. Mason CJ took the broadest view of the power to reopen and, with Deane J, dissented as to the outcome in the particular case. Mason CJ said that the exercise of the jurisdiction to reopen should not be confined “in a way that would inhibit [the court’s] capacity to rectify what it perceives to be an apparent error arising from some miscarriage in its judgment”. None the less, Mason CJ emphasised that the jurisdiction to reopen “is not to be exercised for the purpose of re-agitating arguments already considered by the Court”. Rather, Mason CJ concluded that “[w]hat must emerge … is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing”.