Orio Holdings Pty Ltd v Costi & Co - [2009] SASC 60

SUPREME COURT OF SOUTH AUSTRALIA
(Appeal from a Master: Application)
ORIO HOLDINGS PTY LTD & ANOR v COSTI & CO
[2009] SASC 60
Judgment of The Honourable Justice Vanstone
10 March 2009
PROCEDURE - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE - CORRECTION UNDER SLIP RULE
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - ADMISSION OF FRESH EVIDENCE
Dispute over solicitors' costs - an appeal to a single judge from a Master's decision was referred back for further factual findings - when the matter came back before the Master the solicitor applied to adduce fresh evidence - application refused by Master - solicitor now applies to same single judge to vary original order to enable solicitor to call the fresh evidence - solicitor contends r 242 SCR could be utilised for that purpose - solicitor also appeals against the Master's decision to decline to hear the fresh evidence - whether order should be amended to allow for reception of fresh evidence - whether Master's decision a "judgment" giving rise to a right of appeal under s 50 of Supreme Court Act - whether Master was correct to decline to hear fresh evidence.
Held: inappropriate to vary original order by means of r 242 or at all - Master's ruling on the application to bring fresh evidence did not amount to a judgment which could be the subject of an appeal - on the facts the Master's ruling was open to him - the 'fresh' evidence was always available to the solicitor - the evidence sought to be adduced does not add materially to the evidence already presented - application to vary order dismissed and appeal dismissed.
Supreme Court Civil Rules 2006 r 242, r 284; Supreme Court Civil Rules 1987 r 84.12; Supreme Court Act 1935 s 50, referred to.
Smith v NSW Bar Association (No 2) (1992) 176 CLR 256; R v Dorning (1981) 27 SASR 481, applied.
Orio Holdings Pty Ltd & Anor v Costi & Co (No 1) [2007] SASC 403; Orio Holdings Pty Ltd & Anor v Costi & Co [2008] SASC 218, discussed.
Monetary Management SVS v Deputy Commissioner of Taxation (No 4) [2000] SASC 313; Graziano v Graziano [2008] SASC 142, considered.

ORIO HOLDINGS PTY LTD & ANOR v COSTI & CO
[2009] SASC 60
Civil

VANSTONE J. The application and appeal before me represent another step in a protracted contest over costs incurred in an application for injunctive relief between a firm of solicitors (“the solicitor”) and the plaintiff (“the client”). At issue is whether the Master, in complying with an order made earlier by me to provide further findings on a factual dispute, should be required to hear fresh evidence now presented by a party.
Sometime ago, a Master made a provisional costs order. In the first instance he determined as a preliminary issue the question whether there was an agreement in writing between the parties for the payment of costs on a specified scale. The hearing on that issue lasted about two and a half days. The Master found there were difficulties in respect of the credibility of all the witnesses before him. He said that he “strongly doubt[ed] that any witness told the whole truth about what had occurred”. The Master concluded, in effect, that even on the solicitor’s own account he must fail on the issue. Accordingly, the Master found there was no written agreement: Orio Holdings Pty Ltd & Anor v Costi & Co (No 1) [2007] SASC 403.
The matter came before me by way of a review under r 278(5) Supreme Court Civil Rules 2006 (“SCR”). I could not agree with the Master’s analysis of the solicitor’s account of events. Being, then, impeded by what I saw as a lack of findings about the critical events, I published some reasons (Orio Holdings Pty Ltd & Anor v Costi & Co [2008] SASC 218) in support of the following order made on 12 August 2008:
1.Refer the matter back to the Master for the making of further findings on the questions of at what stage and in what form the solicitors were retained; as to how the matter was left between the two men on or about 23 April; as to what, if any, inferences should be drawn from the facts that the written agreement remained unsigned and that the client continued to instruct the solicitors; whether the written retainer agreement was accepted, orally, by the client.
When the matter came back before the Master, the solicitor sought to adduce further evidence going to these issues. That application was made in the form of a Notice for Specific Directions (FDN 24) supported by the solicitor’s affidavit. In that affidavit the solicitor deposed to having “discovered” a number of papers in a file relating to counsel fees. This was said to be a file separate from the firm’s correspondence file relating to the client’s main dispute. The documents which he wished to introduce into evidence consisted of a file note dated 28 May 2004, a letter to the client bearing the same date and a photocopy of the solicitor’s mobile telephone, showing a text message from the client dated 4 February 2006. Before me, counsel for the solicitor conceded that this last was of little weight.
On 14 January 2009 the Master ruled on the application. His ruling is enclosed in a document kept on the court file, known as a “record of outcome”. The order made on that day was that the Notice for Specific Directions was refused. The order was accompanied by the following remarks.
By FDN 24 the deft applies for leave to adduce further evidence before I deal with the reference back from Vanstone J. I consider that Vanstone J has referred the matter back to me to make further findings on the evidence which was before me on the original hearing. Those further findings relate principally to the events of 22 and 23 April 2004. I do not consider that the order of Vanstone J requires me to re-open the evidence on the topics referred back to me. FDN 24 is therefore to be dealt with as if it were an application to re-open the evidence after judgment has been reserved and before judgment was delivered. The evidence in question was available to the defendant at the time of the original hearing. Further evidence relates to 28 May 2004 which is after the events of 22 and 23 April and is not of great direct relevance to those events. It also raises credibility issues which may lead to an extended hearing and my being required to revisit the credibility findings which I have already made.
Subsequently the solicitor filed an interlocutory application, FDN 26, applying for an order varying the order which I made on 12 August 2008, to add to it the following words:
... and with the defendant being entitled to tender further evidence on the referral before the Master as to the matters dealt with in the “Additional documents” as defined in paragraph 5 of Mr Costi’s affidavit of 31 December 2008.
As mentioned earlier, the defendant also filed a Notice of Appeal (FDN 28) pursuant to SCR r 284. The grounds of appeal need not be set out. They essentially challenge the analysis of the situation as set out in the remarks of the Master. An order was sought obliging the Master to receive the fresh evidence in issue.
It is convenient to deal first with the interlocutory application. Mr Hoile, who appeared for the solicitor, relied on the power given to the court in SCR r 242. That is sometimes referred to as “the slip rule”. Whilst the rule gives the court the power to correct an error in a judgment, it also extends to allowing the variation or setting aside of a judgment if the justice of the case so requires. Mr Hoile referred to the general discussion of the predecessor to r 242, being r 84.12 of the 1987 Supreme Court Rules, in Monetary Management SVS v Deputy Commissioner of Taxation (No 4) [2000] SASC 313, a judgment of Debelle J.
As has been seen, it is not suggested that the order I made last August was vitiated by error. Rather, it is put that the interests of justice require that the fresh evidence be dealt with and that this is a convenient means of directing the Master to hear that evidence. However, I do not consider that the use of this process is appropriate. The Master’s ruling on the application to bring fresh evidence was a matter solely within his province. That ruling had nothing to do with the order which I previously made. While the solicitor’s anxiety that the matter proceed expeditiously can be appreciated, in my view r 242 should not be used as some sort of device to regulate the conduct of the matter before the Master. Additionally, as will be seen, I am not persuaded that the new material is such as to add materially to the evidence already taken.
I turn then to the Notice of Appeal.
The right of appeal is against “a judgment of the court”: s 50(1)(a) Supreme Court Act 1935. The word “judgment” includes “an order or direction”: s 50(6). Mr Hoile argues that as the application to call fresh evidence was made by way of Notice for Specific Directions, the outcome amounts to an interlocutory judgment. However, he conceded during argument that in the normal course, a ruling upon an evidentiary matter made in the course of a trial would not amount to a judgment. Bleby J considered a very similar issue in Graziano v Graziano [2008] SASC 142. That was an appeal against the refusal of a trial judge to grant leave to the plaintiff to re-open his case to call further evidence. Bleby J considered the issue of whether the judge’s refusal amounted to an interlocutory judgment. His Honour’s opinion was that the fact that the ruling was the subject of an application for specific directions and a consequent order was not determinative of the issue. His Honour ruled that the application was “akin to a ruling on the admissibility of evidence made in the course of a trial” and did therefore not amount to an interlocutory order: [46].
In my view the same analysis is here applicable. Accordingly, as submitted by counsel for the client, Mr Tredrea, the appeal is incompetent.
Notwithstanding the above, I was asked, and think it is appropriate, to say something about the nature of the evidence which it is sought to call and the approach of the learned Master to it.
The approach to the question of whether an application to call fresh evidence should be granted is much the same whether made in course of a civil or criminal matter. The underlying purpose of the rules or tests or criteria to be applied is to achieve justice in the particular circumstances at hand.
The approach differs depending on at what stage of proceedings the application is made. If it is made after reasons for judgment have been delivered then a test more akin to that applied in the appeal situation is applicable: Smith v NSW Bar Association (No 2) (1992) 176 CLR 256. At a point prior to the delivery of judgment a less demanding test may apply; one focussed more directly on embarrassment or prejudice to the other party: Smith v NSW Bar Association. In the unusual circumstances applicable here, the Master viewed the application as if it were made after judgment was reserved. I cannot think any complaint can be made by the solicitor about that approach. Acknowledging that the matter is, fortuitously, before the judge at first instance again and that the hurdle faced by the solicitor is less than that applied at an appeal hearing, the factors to be considered remain much the same. In Queen v Dorning (1981) 27 SASR 481, 485 the Court of Criminal Appeal discussed what were said to be the three conditions which need to be fulfilled before the reception of such evidence could be justified. The court said:
... first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; second, the evidence must be such that, if given, it would probably have an important influence on the result of the case, although it need not be decisive; third, the evidence must be apparently credible ...
As Mr Hoile suggested, it may be that what were said there to be “conditions” are better described – in this context at least – as factors.
Here, it was frankly conceded by Mr Hoile that the new evidence could plainly have been obtained with reasonable diligence. It was part of the solicitor’s own files related to the matter under consideration. Next, whether this material would probably have an important influence on the case is, in my view, doubtful. As earlier seen, the critical time in terms of whether or not an agreement in writing was made was 22 to 23 April. It has not been suggested by anyone that events subsequent to that time could not throw light on what then occurred. However, the important fact is that, between 22 and 23 April and the date of the file note and letter, supervened the hearing and refusal of the injunction application. That matter was heard by the Chief Justice on 13 May and judgment was given on 21 May; that is one week before the date of the new documents. The complaint about the standard of the legal services provided by the solicitor and counsel briefed in the matter seems to have had its genesis in certain events at the hearing, but certainly crystallised by 21 May. Therefore, documents which came into existence after that date did so in the context of that dispute. Whatever the solicitor wrote in his file note or communicated to his client in the letter was written with knowledge of that dispute. In my mind that robs those documents of any but peripheral weight. The same observation is relevant to the third factor, being whether the new material is apparently credible. It is not suggested that these are not genuine documents. But it is by no means clear that, were the solicitor to be cross-examined upon them, they would retain any evidentiary weight, due to the circumstances pertaining at the time they were generated.
I have already set out the remarks made by the Master in dismissing the solicitor’s application for leave to adduce further evidence. Although they were concise, it can be seen that in the last two sentences the Master addressed these very three issues. He referred to the availability of the evidence at the time of trial. He noted that the new evidence related to a time well after the relevant events. He also referred to the issue of credibility. It is apparent that the Master addressed all three of the factors relevant to such an application. It cannot be suggested that the approach taken was in error. The Master also observed that there was nothing in the order earlier made by me which obliged him to hear the evidence. That is plainly correct. On the contrary, it would have been surprising if, having regard to the terms of that order, the Master had determined to take further evidence.
Unfortunate as it may seem to be from the solicitor’s viewpoint, I consider that the appeal must be dismissed as being incompetent and the interlocutory application must be dismissed as well. It is appropriate to allow the matter to proceed in accordance with my August 2008 order.
The orders I make are:
1.Interlocutory application of 4 February 2009 (FDN 26) is dismissed.
2.Appeal (FDN 28) is dismissed as incompetent.
3.The defendant is to pay the plaintiffs’ costs of and incidental to the application and the appeal.