Pilmer & Ors v Duke Group Ltd (In liq)

[2003] HCATrans 663

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A189 of 2002

B e t w e e n -

ANGUS CLAYMORE PILMER

First Applicant

ALAN ROBERT CRAWFORD

Second Applicant

DOMENIC VINCENT MARTINO

Third Applicant

PETER JOHN MESSER

Fourth Applicant

PETER LAWSON MUNACHEN

Fifth Applicant

ROBERT JOHN GRAY

Sixth Applicant

and

THE DUKE GROUP LIMITED (In liquidation)

Respondent

Application for special leave to appeal

KIRBY J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 11 APRIL 2003, AT 12.27 PM

Copyright in the High Court of Australia

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MR W.J.N. WELLS, QC:   May it please the Court, I appear with my learned friend, MR M. KEITH, for the applicants.  (instructed by Holding Redlich)

MR R.J. WHITINGTON, QC:   May it please the Court, I appear with my learned friend, MR S.J. DOYLE, for the respondent.  (instructed by Fisher Jeffries)

KIRBY J:   Yes, Mr Wells.

MR WELLS:   Can I inquire whether your Honours have with you the supplementary book of material on behalf of the applicants.  It is a document which on its front page actually is headed “Applicants’ List of Authorities”.

KIRBY J:   Yes, we have that.

MR WELLS:   It has eight items.  If I could ask your Honours to turn to item 4 which is the decision of Justice Lander in Northern Australia Land and Agency Co Ltd v Le Poidevin.  My reason for doing so is this.  The error that we identify in this case relating to the question of costs following the grant of a stay of execution pending an application for special leave to this Court is a confusion about the nature of the stay jurisdiction that this Court has by comparison with the stay jurisdiction that the Supreme Court has.

If I can in that respect invite your Honours’ attention to what his Honour Justice Lander had to say in Le Poidevin Industries to be found at print page 5 of ‑ ‑ ‑

KIRBY J:   Yes, but, Mr Wells, this distinction is absolutely clear and it is made clear to anyone who did not ever know it in Burgundy Royale, which is Justice Brennan’s decision, and Chief Justice Doyle I think specifically referred to that decision.

MR WELLS:   Your Honour, with great respect, that is so but our complaint is that the significance of the distinction was not seen to have an effect on the way in which costs of the application were to be dealt with.  Your Honour in that respect will recall that Chief Justice Doyle on the question of costs took as what his Honour called his starting point the order made by Justice Brennan in Burgundy Royale.

KIRBY J:   Yes, exactly.

MR WELLS:   That is, in our respectful submission, an error which is based on a failure to discern the significance of the difference in the jurisdiction.  It is clear, in our respectful submission, that what Justice Lander had to say in the middle of page 5, namely that the Supreme Court was exercising the inherent jurisdiction of the High Court, cannot be right and that, clearly enough, is accepted.  Chief Justice Doyle in the reasons that he gave for the granting of the stay, which is to be found in the application book starting at page 2, addressed that and identified, although his Honour did not use these exact words, but at paragraph 7 and following identified that the jurisdiction in this Court is an exercise of the implied incidental power and is therefore confined and it is confined to ensuring the integrity of the process in this Court, which is the special leave application.

It is not therefore directed principally at determining, if you like, a balance of justice between the parties.  That happens once one identifies the need to protect the integrity of this Court’s process.  That, your Honours may see, led to a discussion before his Honour on the stay application as to whether in the Supreme Court what was being exercised was an extraordinary jurisdiction in exceptional circumstances, which of course is the High Court jurisdiction.

His Honour was disposed to say at paragraphs 13 and 14 on page 4 that there is some force in the view that in the Supreme Court the jurisdiction to grant a stay, even a stay pending special leave application, is a jurisdiction which is very different from that which is exercised in the High Court, but his Honour, nevertheless, did not act on that.  His Honour came to the view at paragraph  15 that pending a considered determination of it his Honour should follow the approach of Justice Brennan.  That meant looking at the matter as the touchstone of protecting the integrity of the Court process which required exceptional circumstances and the exercise of an extraordinary jurisdiction.  In our respectful submission, his Honour’s conclusion is incorrect and there is a different and wider jurisdiction that is exercised in the Supreme Court and that bears upon the question of costs and that is why, in our respectful submission ‑ ‑ ‑

KIRBY J:   It is some years since I exercised a Supreme Court’s jurisdiction granting stays but they were applied for every Monday and my recollection of the principles is that, although not perhaps as extraordinary as in the High Court where you have to get through the gateway of special leave which you are trying now to do, in the Supreme Court you still had to show that the ordinary consequences of a judgment should not take its course and you still had to show that the case was exceptional to the extent that rights would be lost unless you intervened.

Now, Chief Justice Doyle noted your submission of the difference, which in a sense is self‑evident, and he accepted there was force in the submission but he went on to say that there still was a requirement to show that the case was one which warranted the grant of the stay.  There is nothing wrong in any of that, it seems to me, unless his Honour skipped over your submission, he ignored it, rejected it and then applied exactly the same principles for the Supreme Court’s exercise of its stay jurisdiction.  I do not see that he did that.

MR WELLS:   Your Honour, with respect, his Honour did not act on our submission and preferred to act on the basis of the principles that Justice Brennan applied in Burgundy Royale in exercising the ‑ ‑ ‑

HAYNE J:   Let that be assumed.  What order do you seek special leave to appeal from?

MR WELLS:   Your Honour, clearly enough, it is in relation to the dismissal of the appeal and the revocation of leave granted by Chief Justice Doyle in the Full Court in relation to the costs order.

HAYNE J:   And it is only the costs order that you seek leave to appeal from, is it not?

MR WELLS:   That is correct, your Honour.

HAYNE J:   What are we doing fossicking around in the judgment of the Chief Justice on a question of practice and procedure on an interlocutory matter?  To what end?

MR WELLS:   Your Honour, the answer to that is because it raises, in our submission, an important issue about the nature of this Court’s jurisdiction on a stay application and the nature of ‑ ‑ ‑

HAYNE J:   How, when the only question that you can seek to challenge in this Court is the order for costs?

MR WELLS:   My submission, your Honour, is that the correct view on the nature of the jurisdiction informs the exercise of the discretion as to costs and it does it in at least three ways.  That takes me back to our respectful criticism of the learned Chief Justice’s starting point on the question of costs being a reliance ‑ ‑ ‑

KIRBY J:   Yes, but he came back to the starting point on page 26, paragraph  25 in which he said:

It follows, I think, that the approach I have taken is broadly similar to that taken by Brennan J –

in Burgundy Royale -

but I emphasise I have not simply taken that approach as a rule of thumb or principle to be applied, I have taken account of all of the factors I referred to.

So, it really contradicts your assertion that he picked up and applied, unthinkingly, the words of Justice Brennan in Burgundy Royale.

MR WELLS:   Your Honour, can I say that I would not for a moment suggest that the learned Chief Justice picked up that starting point unthinkingly.  He clearly gave very close consideration to where he should start and indeed his grant of leave which was exceptional was an appeal for help from the Full Court as to what the correct approach should be.  Now, your Honour is right in saying that the learned Chief Justice appears on the face of it to, as it were, have covered the field by saying, “Well, this is where I start and this is how I approach it but in the end I am going to take all factors into account”.

If, however, he were wrong about the approach that he took based on Burgundy Royale, then it does not follow that if he had come therefore to a different view, namely as a matter of principle the costs should follow the event of special leave and the consequent appeal, it does not follow that if he had got there that he would then have turned around and said, “But in any event, taking all the factors into account, I order that there be no order as to costs”.

KIRBY J:   Mr Wells, you are a very experienced counsel and you know how uncongenial costs appeals would be to the High Court of Australia.  I realise that this is an important matter for your client.  You say that the amount involved is a very substantial amount but, as Justice Hayne has pointed out to you, it is really a challenge of Pelion piled on Ossa.  You are seeking to challenge a second judgment by reference to what was said in a first judgment and all this in relation to costs orders where your best point seemed to be that the Chief Justice did not expressly state that he had taken into account the ordinary rule that costs normally follow the event, but it is just unthinkable that the Chief Justice would not have taken that into account and therefore I ask myself:  does this have the colour of those cases where the High Court has brought up a costs question?  Is it, for example, a general question in criminal costs?  Is it a general question in environmental law costs?  Does it have some general importance?  When one looks at it, save for the importance to your clients, it just does not seem to have it.

MR WELLS:   Your Honour, we of course are seeking to contend to the contrary and we do that by pointing out, as I think we have done in our outline, that these applications for a stay pending special leave applications are not infrequent.  They are matters that arise often and they present a continuing issue for the judges who are hearing them.

KIRBY J:   I know, but could one believe that a judge – say a first instance judge - a new judge in South Australia who did not know the ways these are dealt with every week, looked at what Chief Justice Doyle said and inferred from it, despite what appears at paragraph 25 on page 26, that you just pick up and run with what Justice Brennan said in relation to the exercise of this Court’s jurisdiction?  That would be so self‑evidently wrong that I cannot believe in the face of that added passage that a judge would be misled by that or by what the Full Court decided in your application to them.

MR WELLS:   Your Honour, we point to paragraph 12 of the learned Chief Justice’s reasons on page 24 of the application book in which his Honour referred expressly to what we will call “the usual rule” and said that in his view he considered that “some other starting point is appropriate”.

KIRBY J:   No.  With respect to you, I think that that paragraph is quite the contrary.  It is saying, “I acknowledge that there is the general rule that costs commonly follow the event but I do not consider that that is the outcome of this application”, which indicates he has specifically addressed himself to that principle, and to say the contrary is really to suggest that the Chief Justice, despite paragraph 11, overlooked something that you know and I know judges do every day of their life, often automatically:  costs follow.

MR WELLS:   Your Honour, with great respect, refers in what your Honour said to what the Chief Justice had in mind by way of an outcome but of course, in our respectful submission, what his Honour was dealing with there was how was he going to approach this, not where was he going to end up, but how was he going to commence an approach to it, and in that respect ‑ ‑ ‑

KIRBY J:   It is a question of interpreting paragraph 11 and I am afraid I am against you on that submission.

MR WELLS:   If your Honour pleases.  Nevertheless, the position obtains, your Honour, that if we are right about the nature of the Supreme Court’s jurisdiction by comparison and in contrast with this Court’s jurisdiction on a stay application pending special leave, then that will have very different consequences for the costs order.  Your Honour says that I appear in my submissions to be challenging an earlier judgment in order to reach this.  With great respect, not so.  We are challenging the judgment of the Full Court ‑ ‑ ‑

HAYNE J:   If that is right, Mr Wells, why did you begin with it?  Really.

MR WELLS:   Because, your Honour, with respect, it identifies an issue of principle which informs the jurisdiction and power to grant costs and to make costs orders.  That is why, your Honour.  It is a decision of the Supreme Court which is relevant to the issue that we seek to raise with reference to costs and it is ‑ ‑ ‑

HAYNE J:   Now, what you say at page 58 of the application book is that this Court should lay down principles.

MR WELLS:   Yes.

HAYNE J:   Why should this Court ever lay down principles to fetter a discretion of the kind that was exercised here?

MR WELLS:   Because, your Honour, that is acknowledged by this Court to be a function of appellate courts in the interests of consistency of decision making and in order to avoid and prevent arbitrariness in the exercise of discretions.  That has been made clear, we respectfully submit, in a number of decisions of this Court which we have referred to, in particular, Latoudis v Casey and Oshlack v Richmond River Council, both of which ‑ ‑ ‑

KIRBY J:   Latoudis was the criminal case, was it not, and Oshlack was the Environmental Court case?

MR WELLS:   Yes, correct.

KIRBY J:   They were both in rather peculiar circumstances exercising peculiar jurisdiction, and in both cases I think statutory jurisdiction, but this case here is an application of a general jurisdiction to provide for costs in the exercise of the general jurisdiction of the Supreme Court of a State.  It does not seem to me that that lends itself to anything except you have to take into account the ordinary rules, any statutory provision of a general kind, and the circumstances and merits of the particular case.

MR WELLS:   But these matters of discretion, your Honour, which do not preclude by any means the statement of principle and a statement of principle from the highest court in the land, relate to a very special kind of application.  Your Honour says they were dealt with every Monday in the Court of Appeal in New South Wales.  That does not mean to say that they are not a special exercise of a jurisdiction which we submit has reached a state of some confusion not only in its application but its significance in the Supreme Court.  As I say, an example of that is his Honour Justice Lander’s expression in Le Poidevin Industries.

The point which I am seeking to get to is this, that if the Supreme Court jurisdiction to grant a stay is different in scope and nature from this Court’s jurisdiction to grant a stay, then there will be different considerations when it comes to determining the question of costs because, first, the High Court jurisdiction is a self‑protecting, self‑preserving jurisdiction.  That is, it is concerned to protect the integrity of its processes.  It will not therefore focus on the respective claims to justice of the parties in the same way that that would be the case before the Supreme Court where the jurisdiction is not self‑protecting and not self‑preserving but is adverting to the respective claims for justice of the opposing parties.

Second, in the High Court the threshold for a stay is much higher and provides a greater justification for opposition, therefore.  In the Supreme Court, on the other hand, the threshold is much lower and our respectful submission is that is the point of principle which needs to be resolved.  Your Honour Justice Kirby suggested that notwithstanding that it is a different jurisdiction, one looks for if not exceptional circumstances, then

certainly special circumstances.  Our submission is that is not the basis of a jurisdiction and that is not the principle that falls to be applied in the Supreme Court as distinct from the High Court.

Our third reason is that the peculiar order that was made by Justice Brennan on the question of costs being the respondent’s costs in the cause on the special leave application reflected in that case, and therefore differently from this case, the failure of the applicant to seek a stay from the court appealed from and it therefore does not possess any soundness in principle as starting point for the consideration of factors bearing upon the exercise of a costs discretion.

To reinforce that, if the Court pleases, as we have indicated and as indeed the learned Chief Justice indicated in his Honour’s reasons, there is a statutory jurisdiction for the grant of a stay in the Supreme Court which is provided by section 17 of the Enforcement of Judgments Act which simply requires that there be provided a proper reason for granting a stay.  That being so, the difference in the threshold, the difference in the purpose of the jurisdiction in each case reflects in the way in which the courts will determine who should have the costs.

It is much more likely in this Court that the applicant for a stay will be seen as a supplicant and therefore a cost or a price for the grant of a stay will be costs.  Not so in the Supreme Court.  That, we respectfully submit, identifies the error into which the learned Chief Justice fell and the error that the Full Court, in our respectful submission, failed to correct in circumstances where the Chief Justice had appealed by the grant of leave to the Full Court to seek out and identify a principled approach to the exercise of this particular jurisdiction.  Those are our submissions.

KIRBY J:   I am not sure that you are right on that supplicant point because grants of stay by this Court remain very rare and in a sense, if you get them, then you have indicated that you have an exceptional and warranted case to seek them and that might put you in a different situation than in the intermediate courts where grants of stays to preserve the right to apply to this Court are not at all uncommon.

MR WELLS:   The other side of that coin, your Honour, if I may just reply briefly, is that in this Court the opponent is more justified in opposing because of the higher threshold.  If the Court pleases.

KIRBY J:   Yes, thank you.  The Court does not need your assistance, Mr Whitington.

The applicants seek special leave to appeal in order to contend that an order for the costs of an application for stay of execution pending an earlier appeal to this Court should have been made in their favour.  The application raises no point of general principle warranting the grant of special leave to appeal to this Court.  Special leave is therefore refused with costs.

AT 12.50 PM THE MATTER WAS CONCLUDED