Sanhueza v AAMI Limited

[2010] NSWSC 1374

CITATION:	Sanhueza v AAMI Limited [2010] NSWSC 1374
HEARING DATE(S):	6 October 2010 (Written submissions closed 22 October 2010)
JUDGMENT DATE :	6 December 2010
JUDGMENT OF:	Smart AJ
DECISION:	Motion to vary costs orders dismissed with costs. Plaintiff to pay costs of AAMI Ltd of motion.
CATCHWORDS:	ADMINISTRATIVE LAW - Orders made on 16 July 2010 as to costs - leave to move within 14 days to vary orders as to costs - no motion filed within time - informal telephone application made on 2 August 2010 - motion not filed until 25 August 2010 - not appropriate to extend time, even if power to do so - initial costs order correct in any event
LEGISLATION CITED:	Civil Procedure Act 2005 Uniform Civil Procedure Rules
CATEGORY:	Principal judgment
CASES CITED:	Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133 Hancock v Arnold (No 2) [2009] NSWCA 19 John Alexander’s Club Pty Limited v White City Tennis Club Limited [2010] HCA 19; (2010) 84 ALJR 446 Malouf v Prince (No 2) [2010] NSWCA 51 Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336
PARTIES:	Jorge Sanhueza (Plaintiff) AAMI Limited (First Defendant)
FILE NUMBER(S):	SC 2009/298034
COUNSEL:	JB Simpkins SC / L Robison (Plaintiff) MA Robinson (First Defendant)
SOLICITORS:	Leitch Hasson & Dent (Plaintiff) Lee & Lyons (First Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
ADMINISTRATIVE LAW LIST

Smart AJ

Monday 6 December 2010

2009/298034 Jorge Sanhueza v AAMI Limited & Ors

JUDGMENT

1 HIS HONOUR: This is a contest as to the costs orders that should have been made when judgment was delivered on 16 July 2010 and whether the Court can and should now vary the orders made on that day.

2 On 16 July 2010 I made the following costs order (paragraph 129, sub-paragraph 4):

“4.(a) Order that the first defendant pay one half of the costs of the plaintiff of these proceedings.
(b) No order as to the costs of the submitting defendants of these proceedings.
(c) Leave to both the plaintiff and the defendants to move within 14 days to set aside the costs orders and to seek such orders as to costs as he or it or they may be advised.”

3 At paragraph 128 I wrote: “My provisional view is that the plaintiff should receive one half of his costs, but I am prepared to hear argument on the point.”

4 The hearing took place on 14 May 2010 with written submissions closing on 4 June 2010. The matters argued appear from the Court’s reasons.

5 UCPR 36.11 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.”

6 UCPR 36.15 provides:

“(1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith.
(2) A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent.”

7 UCPR 36.16.1 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.
....
(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 sub-rule (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 sub-rule (3A) or (3B).
(4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order.”

8 UCPR 1.12(1) and (2) provide:

“(1) Subject to these rules, the court may, by order, extend or abridge any time fixed by these rules or by any judgment or order of the court.
(2) The court may extend time under this rule, either before or after the time expires, and may do so after the time expires even if an application for extension is made after the time expires.”

9 Section 14 of the Civil Procedure Act 2005 (“CPA”) provides:

“14 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.”

10 On Monday 2 August 2010 a secretary in the office of the plaintiff’s solicitor telephoned my chambers and sought to have this matter listed to argue the question of costs. The secretary was told that a Notice of Motion needed to be filed. On the following day, after a further telephone call from the secretary, she was referred to UCPR 36.16 and the altered practice embodied in that rule.

11 On 25 August 2010 the solicitors for the plaintiff filed a Motion seeking to vary the order made as to costs and an order that AAMI Ltd pay the plaintiff’s costs of the proceedings. At the hearing of the costs argument on 6 October 2010 an Amended Motion was filed. That sought an order extending the time provided in order 4(c) made on 16 July 2010 for filing any motion seeking to set aside the costs order and obtain a different costs order.

12 The plaintiff contended that the informal telephone request was marginally out of time – one business day. In former times the practice followed by the plaintiff’s solicitor would have sufficed but the UCPR have been in force since late 2005 and the order as to costs made on 16 July 2010 reflected the practice prescribed under UCPR that a Motion should be filed within 14 days.

13 AAMI Ltd contended that the court had no power to vary the costs order and that on the merits the order should not be altered.

14 The plaintiff submitted that:

“1. The court has the power to entertain the plaintiff’s motion for variation of the order as to costs because:
a) The court can extend the time it stipulated in its order as the time by which any such application might be made without offending UCPR 36.16(3C).
b) Alternatively, the effect of the grant of leave was to defer entry of the order for costs until the period of leave expired with the consequence that the order was entered on the first business day after the expiry of the period of leave, namely 2 August 2010, on which date an informal application satisfying UCPR 36.16(3A) was made. [The informality of the telephone application may be used as a basis or part of a basis to dispense with the requirements of the Rules under s 14 of the CPA if the court was satisfied that it was appropriate to do so in the circumstances of the case.]
c) Alternatively, if the order was entered on 16 July 2010 an informal application was made on the first business day after expiry of the 14 days provided for by UCPR 36.16 with the consequence that there was substantial compliance with UCPR 36.16 so that the requirement for a formal motion filed within 14 days can be dispensed with.
2. UCPR 1.12 permits the court to extend the timed fixed by any order and to do so on an application made after the expiration of the time fixed by the order.
3. The court’s order of 16 July 2010 that fixed the time by which an application for variation of the costs order had to be made (order 4(c)) is able to be extended under UCPR 1.12.
4. Because of the leave granted by the court it is unnecessary for the plaintiff to rely upon UCPR 36.16.
5. UCPR 36.16 makes its own provision for setting aside orders…”

15 The plaintiff noted that the period of 14 days provided for under the rule (36.16) may not be extended (UCPR 36.16(3C)). The plaintiff drew attention to the criticism of the High Court of the apparent effect of UCPR 36.16 in John Alexander’s Club Pty Limited v White City Tennis Club Limited [2010] HCA 19; (2010) 84 ALJR 446 at [152] because the process of entry “is a secret process independent of the acts of the parties and outside their knowledge”. The High Court earlier in that paragraph had remarked: “The lapse of time between pronouncement and entry of orders also provides opportunity for the correction of error”.

16 Paragraphs [145] – [152] of the High Court’s judgment are informative. In the circumstances of that case the High Court found did not determine the scope of the operation of s 14 of the Civil Procedure Act 2005 (NSW).

17 The plaintiff submitted that the court must be taken to have ordered otherwise under UCPR 36.11(2) in respect of the costs orders when it gave leave to the plaintiff and the defendants to set aside the costs orders made in sub-paragraphs (a) and (b) of paragraph 4.

18 I do not agree with that submission. Orders were made on 16 July 2010. Leave was specifically given to both the plaintiff and the defendants to move within 14 days to set aside the costs orders and seek other orders as to costs. That matched the period set in UCPR 36.16 (3A) and (3B). Nor do I agree with the plaintiff’s submission that the orders made on 16 July 2010 made outside the Rules so that the Rules do not apply.

19 I do not accept the plaintiff’s submissions that by:

(a) explicitly providing a time period in the judgment itself I “did not simply allow the UCPR to provide a default position in relation to the filing of motions as to costs but rather specifically allowed a period of time for this to be done”; and
(b) this period, being part of the substantive judgment and not a result of the UCPR remains within the inherent power of a Judge of the court; and
(c) the default position under the UCPR should be applied in circumstances where a judgment is silent as to recalling the matter on a question of costs.

20 It is an incorrect description to suggest that the UCPR provides for a default position. The UCPR wrought a radical change in the previous position by providing in UCPR 36.11(1) that an order of the Court is to be entered and in UCPR 36.11(2) that a judgment or order is taken to be entered when it is recorded in the court’s computerised record system. It is true that the court may otherwise order but that does not alter the primary position.

The change overcame the position which had previously existed of parties not taking out the order made by the court and then when some difficulty arose seeking to re-agitate the matter. There was a lack of finality until the orders were entered.

The usual position now is that the judgment or order(s) are usually entered in the court’s computerised court record system on the day on which they are made, or shortly thereafter. This ensures the element of finality. The rules, however, provide that there is a period of 14 days within which the parties may seek to vary or discharge the orders made. This allows for the correction of errors. Otherwise the orders stand as final orders. Ordinarily a court has no power to set aside a final judgment or final orders after entry.

21 In Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133 Basten JA, with whom Giles and Ipp JJA agreed, wrote at [9] “[e]ntry of judgments and orders in this Court now occurs under the relevant provisions of the Uniform Civil Procedure Rules 2005 (NSW)”. He referred to UCPR 36.11 and 36.16. He noted that the Court of Appeal used a computerised record system. So does the Supreme Court. The position in relation to the entry of judgments and orders in the Supreme Court is substantially similar to that in the Court of Appeal.

22 The evidence establishes that my judgment of 16 July 2010 was entered in the computerised court record system on 16 July 2010 in accordance with the Court’s usual practice.

23 Basten JA at [15] wrote that the clear purpose of UCPR 36.11 and 36.16 was:

“… to allow a window of 14 days after entry of judgment, in courts where entry takes place automatically and largely contemporaneously with the delivery of judgment. The removal of the power to extend the 14-day period makes it sufficiently clear that the intention is that the period is not variable, but reflects the need for judgments and orders to be final and certain as to their operation.”

24 It seems that s 14 of the CPA was not raised. The Court held it had no power to entertain the motion to vary the costs orders made when the judgment was delivered. The motion to vary the costs orders was taken out about three months after the Court of Appeal delivered judgment and made costs orders.

25 In Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336 Campbell JA, with whom McColl JA and Sackville AJA agreed, wrote that:

“In Hancock v Arnold (No 2) [2009] NSWCA 19 at [9]-[12], the Court contemplated the possibility that a costs order could be varied notwithstanding that no Notice of Motion was filed within 14 days after the order was entered in the Court’s computer system, if there had been an oral application to vary it within the 14 day period, and if either UCPR 36.16(3) or section 14 Civil Procedure Act 2005 were invoked.”

26 In Hancock the Court of Appeal held at [22] that on the merits there should be no variation of the costs order made.

27 In Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd it was noted that the prudent course had been followed of filing a Notice of Motion within the 14 day period so that the Court had power to vary the costs order if it was appropriate to do so. The Court’s discussion of UCPR 36.16(3) and s 14 of the Civil Procedure Act was obiter but persuasive.

28 In Malouf v Prince (No 2) [2010] NSWCA 51 the Court of Appeal wrote at [11] and [21] – [22]:

“11 The 14-day window afforded by UCPR 36.16(3A) creates an exception to the principle that ordinarily a court has no power to set aside a final judgment after it has been entered (citations omitted)

…

21 There are decisions of this Court which contemplate that a costs order could be varied notwithstanding that no notice of motion was filed within the 14-day window where there had been an oral application to vary it within that period, and if either UCPR 36.16(3) or s 14 were invoked (citations omitted). No such oral application was made in this case ...

22 It is unnecessary to conclude whether s 14 affords the power for which the applicant contends …”

29 See also paragraphs [12] – [14] of Malouf v Prince. In the present case the costs order reflected the provisions of UCPR 36.16 by giving leave to both the plaintiff and the defendants to move within 14 days to set aside the costs orders made and to seek different or varied costs orders.

30 The changes to the procedure for entering orders and varying orders entered were made in 2005 although my experience is that many in the profession have yet to come to terms with the changes and are still acting on the former procedures.

31 Despite the informal application made on 2 August 2010 the formal motion was not filed until 25 August 2010. Section 14 of the CPA confers a wide discretionary power upon the court. In considering s 14 I would also take into account sections 9 and 133 of the CPA. In the circumstances of the present case, I do not think that it is appropriate to dispense with any requirement of the Rules of Court. When the Rules of Court deal specifically with a particular matter and set out the procedure to be followed and deliberately fix a non-extendable time limit it would be an exceptional case where it would be appropriate to dispense with the requirements of the Rules. In the present case where the Rules regulate when orders and judgments are taken to be entered and provide a limited 14 day period when there may be changes and when the court’s order provide a similar period in which parties may move to set aside the costs orders, it would not be appropriate to dispense with the requirements of the Rules, even if I had the power to do so. The Rules are designed to achieve finality by requiring orders to be entered and fixing the time at which orders and judgments are entered. I do not think that it would be appropriate for the court, assuming it had the power, to extend the time within which a variation application as to the costs order might be made under UCPR 36.16.

32 Even if I thought that the court should exercise its powers and extend the time, the question arises whether the discretion should be exercised to make a different costs order.

33 The plaintiff submitted that argument on both points finished within one day and that consequently, as costs tend to be charged on a daily basis, there was no increase in costs by the plaintiff arguing the point on which he did not succeed. The end result was that there has to be a review de novo before a different panel. However, the plaintiff sought to review the decision of the Proper Officer of the Motor Accidents Authority that there was reasonable cause to suspect that the assessment of 30 October 2008 of the Medical Assessor was incorrect in a material respect, having regard to the particulars set out in the review application of AAMI Limited.

34 If the plaintiff’s application had succeeded, a different Proper Officer may well have been asked to consider whether there should be a reference to a review panel. The plaintiff sought to avoid such a reference, and, if he had succeeded, the original assessment of the single Medical Assessor would have stood. The plaintiff’s first attack on the decision of the Proper Officer was different from his second attack on the decision of the Review Panel.

35 The court benefited by being taken through the materials by the parties and that would have been reasonably necessary if only an attack on the review panel decision had been made. The plaintiff’s attack on the decision of the Proper Officer and the reply of AAMI Limited occupied about half the hearing time.

36 I record my indebtedness for the oral and extensive written submissions of the parties.

37 I am of the opinion that the original costs order was correct. I dismiss the amended Notice of Motion filed in court on 6 October 2010 and dated 1 October 2010. I order the plaintiff to pay the costs of AAMI Limited of the Motion of 25 August 2010 and the Amended Motion filed in court on 6 October 2010.

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