Simos v Yates

[2006] HCATrans 73

[2006] HCATrans 073

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S121 of 1998

B e t w e e n -

THEODORE SIMOS

Applicant

and

IAN FRANCIS YATES

Respondent

Office of the Registry
  Sydney  No S29 of 1999

B e t w e e n -

THEODORE SIMOS

Appellant

and

IAN FRANCIS YATES

Respondent

Summonses for direction

HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON THURSDAY, 23 FEBRUARY 2006, AT 9.30 AM

Copyright in the High Court of Australia

__________________

MR D.R. PRITCHARD:  If the Court pleases, I appear for the applicant in both matters.  (instructed by Corrs Chambers Westgarth)

MR M. GREEN:   If the Court pleases, I appear for the respondent in both matters.  (instructed by Bruce & Stewart)

HIS HONOUR:   Before the trial in front of Justice Branson of the proceedings that led to the appeal to the High Court I appeared for Mr Yates’ company in a directions hearing.  I did some work for that company around that time.  Is there any application that anyone wants to make?

MR PRITCHARD:   My friend has communicated something to that effect already, your Honour.  There is no application to be made on my side of the Bar table.

MR GREEN:   There is no application on my client’s side either, your Honour.  It is just simply to bring it to my friend’s attention in case it caused him any embarrassment.

HIS HONOUR:   Right, but does Mr Yates have any ‑ ‑ ‑

MR GREEN:   Mr Yates has no difficulty with your Honour hearing the matter.

HIS HONOUR:   I am sorry, I cannot quite hear.

MR PRITCHARD:   Mr Yates has no difficulty with your Honour, if your Honour is comfortable with it.

HIS HONOUR:   What should I be looking at first?

MR PRITCHARD:   Your Honour, there is an application before you today by summons materially identical in both proceedings filed 16 February 2006 filed pursuant to leave Justice Gummow granted Tuesday last.

HIS HONOUR:   I have Justice Gummow’s order.  Yes, filed on 16 February?

MR PRITCHARD:   Yes, your Honour.

HIS HONOUR:   That is supported by which affidavits?

MR PRITCHARD:   There are affidavits, your Honour, of Ms Carr, Michelle Margaret Carr, sworn 1 December 2005.

HIS HONOUR:   I have exhibit MMC1.  What was the date of Ms Carr’s affidavit?

MR PRITCHARD:   There is an affidavit of 1 December and, if your Honour is also looking, there is one of 9 February 2006, which is also to be read.

HIS HONOUR:   I have 1 December and I have 9 February.

MR GREEN:   Does your Honour wish to hear objections as the affidavits are announced?

HIS HONOUR:   I think what we might do, Mr Green, is just sort out what is being relied on and then we can take objections to each of the affidavits as appropriate.  Yes.

MR PRITCHARD:   There is also an affidavit of Mark Anthony Wilks sworn 9 February 2006.

HIS HONOUR:   Yes.

MR PRITCHARD:   That is the evidence, your Honour.  It is, I understand, an agreed fact, having regard to an affidavit sworn by Mr Yates, that he was served with the applications, being initially the application for leave to take a step, on 9 December 2005 which is a material matter.

HIS HONOUR:   Which is the affidavit of Mr Yates that you ‑ ‑ ‑

MR PRITCHARD:   That is, as I understand it, to be read over objection.

HIS HONOUR:   Is it convenient, Mr Green, if we take on board, as it were, your affidavits now, or do you want to reserve your hand until a later time?

MR GREEN:   It is convenient for the affidavits to be brought before the Court now, your Honour.  However, what exactly is read of them may depend upon, to some extent, your Honour’s rulings in relation to the objections.

HIS HONOUR:   Yes, I follow.

MR GREEN:   In support of the reply my client reads three affidavits.  The first, which was read also before his Honour Justice Gummow, is an affidavit of Nicholas Robison sworn and filed on 14 February 2006.

HIS HONOUR:   I have that.

MR GREEN:   The second affidavit is an affidavit of the respondent, Ian Francis Yates, sworn and filed on 22 February 2006.

HIS HONOUR:   Yes, I have that.

MR GREEN:   And the third is an affidavit of Richard James Talbot, sworn on 21 February 2006 and filed on 22 February 2006.

HIS HONOUR:   Right, I have that too.

MR GREEN:   That is the evidence.  I tender, if I may, the exhibit to the affidavit of Mr Yates.  It is a confidential exhibit.  It is formally tendered in the matter.  It is on the Court file.

HIS HONOUR:   Just on the subject of that, you want some order, I gather?

MR GREEN:   I do seek an order, your Honour, simply until further order restricting access to the contents of exhibit IFY1 CONFIDENTIAL to the parties’ legal advisers.

MR PRITCHARD:   There is no objection to that order, your Honour.

HIS HONOUR:   I order that exhibit IFY1 CONFIDENTIAL to the affidavit of Ian Francis Yates dated and filed on 22 February 2006 be kept confidential and that access to it be restricted to the legal advisers of the parties.  That order, of course, is made until further order.

MR GREEN:   If it please the Court.

HIS HONOUR:   It might be best if I just look through your affidavits, Mr Pritchard, and then we might hear Mr Green’s objections to them.

MR PRITCHARD:   If the Court pleases.

HIS HONOUR:   Do I have to bother with MMC1 to the affidavit of 1 December 2005 of Ms Carr’s, or has that been superseded by MMC1 to the affidavit of 9 February?

MR PRITCHARD:   It has been superseded, your Honour.

HIS HONOUR:   So I will not bother with MMC1?

MR PRITCHARD:   I think they are, in fact, identical.

HIS HONOUR:   I think not totally.

MR PRITCHARD:   Not quite.

HIS HONOUR:   I was just trying to follow the documents.

MR PRITCHARD:   Yes, your Honour, not quite.  The answer to your Honour’s question is you do not need to have regard to it.

HIS HONOUR:   Is the High Court order in MMC1 to the affidavit of 9 February the order that you want to have amended?

MR PRITCHARD:   It is, your Honour, if I can have that leave.  Page 81 with my friend’s assistance, your Honour.

HIS HONOUR:   That is the grant of special leave.  There is no costs order there.

MR PRITCHARD:   That is right.  The other order is at page 99, your Honour.

HIS HONOUR:   Just so that I can get one thing straight, Mr Pritchard, if you got order 1 in the summons, which would be to insert a reference into paragraph 1 after costs “including the costs of the application for special leave to appeal”, does that mean order 2 becomes academic?

MR PRITCHARD:   That is on page 99, your Honour?

HIS HONOUR:   Yes – sorry, order 2 of the summons.

MR PRITCHARD:   Your Honour, that is put in for abundant caution.  In fact, that is what the Registry said we should do and that is, in fact, why it is there.  So it is formally pressed, but on that basis, your Honour.  My primary submission is that it should not matter, in effect, it should be otiose, but having regard to the attitude expressed on a considered basis by the Registrar, the order was sought and that is why it is before your Honour.

HIS HONOUR:   Right.  Do you know where in the bundle is to be found the certificate of taxation that order 2 of the summons relates to?

MR PRITCHARD:   It is 155, your Honour.

HIS HONOUR:   Right.  Now, those two orders of 12 February 1999 and 11 April 2000 ‑ ‑ ‑

MR PRITCHARD:   They are the two orders that I have taken your Honour to already.  They are the special leave application and the hearing orders.

HIS HONOUR:   I just cannot understand how it can be said that a bill of costs pursuant to an order of the Court dated 12 February 1999 has been taxed and allowed when there was no costs order made on 12 February 1999.  All there was was a grant of special leave and a grant of leave to amend the notice of appeal.

MR PRITCHARD:   A part of the procedural difficulty that would appear to have emerged.  What fell from her Honour on the occasion of 12 February is revealed by the transcript, your Honour, in response to a specific application by counsel then appearing in the interest of my client, Mr Allsop, as he then was.

HIS HONOUR:   Yes.  He asked for costs and Justice Gaudron said they will await the outcome of the appeal.

MR PRITCHARD:   Justice Gummow’s observation was that was the usual order.  It may well be, your Honour, but it seems slightly more complex because there is an absence of an express order.  If what her Honour said is to be taken strictly, it would be appear to be a reserving of costs and, as the High Court Rules provided and still provide, that if costs are reserved and no subsequent order is made in respect of those reserved costs, then there is to be no order as to costs.

HIS HONOUR:   Right.

MR PRITCHARD:   That rule, your Honour, previously was Part 71 rule 28 and is currently Part 51.01.

HIS HONOUR:   The old one was Part 71 rule 8, was it?

MR PRITCHARD:   Rule 28 in the 1952 rules; now Part 51.01.

HIS HONOUR:   We are drifting a little bit from your affidavits.

MR PRITCHARD:   We are, your Honour, I am sorry.

HIS HONOUR:   But if this is exposing a useful point, by all means let us proceed.  Part 51.01 says that:

Where the costs of an application are reserved by the Court or a Justice, and no order is later made directing by and to whom those costs are to be paid, the costs shall be costs in the cause.

There is a certain inappropriateness in this language, but let us say that said “the costs shall be costs in the appeal”, would it not follow from the ultimate order made by the Full Court that the costs of the special leave application were caught up and dealt with?

MR PRITCHARD:   Yes, your Honour, that would follow.

HIS HONOUR:   If we can just go back to Order 71 rule 28, it is different in form, but is someone’s argument that when it says “costs of the . . . application . . . shall not be allowed to a party without an order of the Court”, that means the Full Court’s order should have said “the costs of the appeal and the costs of the special leave application”?

MR PRITCHARD:   Yes, your Honour.

HIS HONOUR:   I have never heard of any such order being made.  I am prepared to admit ignorance.

MR PRITCHARD:   I am not aware of it either, your Honour.  I should hasten to say, your Honour, if my friend, on instructions, concedes that there is no issue about this and that we can issue a bankruptcy notice without this point being taken, then the application falls away.  But, as I understand it, there is no such concession made.  The matter is being

opposed on the basis, presumably, that this point will be taken in the bankruptcy proceedings and it is for that purpose that we are here, having regard to the time constraints imposed on the bank in…..bankruptcy matters based on costs orders.

HIS HONOUR:   So your argument basically is that what the Full Court did was a valid order and there is nothing in the old Rules or the new Rules that stopped it being valid.  It is your opponent’s contention that that is not so, that the order was defective in that respect, and your summons is posited on the basis that that submission succeeded and then you would wish that – I follow.

MR PRITCHARD:   And we thought it appropriate to bring it before this Court at this stage rather than have to deal with it in the Federal Court, the Federal Court judge or magistrate probably taking the view this is really a matter for the High Court.

HIS HONOUR:   Yes, thank you, Mr Pritchard.  Now, Mr Green, is there any objection to Ms Carr’s affidavit of 1 December?

MR GREEN:   Yes, there is, your Honour.  The two affidavits are identical in terms, as I understand them to be from my friend.  The objection is as to paragraph 55.

HIS HONOUR:   Just going back one step, which two things are identical in terms?

MR GREEN:   The two affidavits.  Ms Carr has filed, as I understand it, an affidavit in proceedings S29 of 1999 and an affidavit in proceedings S121 of 1998.  There are two separate proceedings before this Court, separate causes, but they are identical, as I understand it, save for the positioning of the signatures and the fact that they were separately executed.  They are identical in text.

HIS HONOUR:   Right.  I am working off S29 of 1999.  What do you object to in that?

MR GREEN:   I object to paragraph 55.  It is really an unhelpful expression of opinion, your Honour.  It cannot go anywhere, your Honour.  It is page 10, your Honour.

HIS HONOUR:   My copy has been put together in a strange way.  Paragraph 55.

MR GREEN:   Yes, your Honour, page 10.

HIS HONOUR:   Beginning “I am of the view that”.

MR GREEN:   Yes, your Honour, to the end of that paragraph.

HIS HONOUR:   Is it not really just setting out the reason why Mr Simos has brought the matter to the Court?  I do not think any controversial fact or opinion is being alleged there.  It is just she may be right or she may be wrong legally, but it does not ‑ ‑ ‑

MR GREEN:   No, quite.  If it is only read by your Honour on that basis, then certainly ‑ ‑ ‑

HIS HONOUR:   It cannot really be read any other way, can it?

MR GREEN:   I would not imagine.

MR PRITCHARD:   It is not sought to be, your Honour.

MR GREEN:   Thank you.

HIS HONOUR:   I note the objection, but overrule it on that basis.

MR GREEN:   The other affidavit, your Honour, is the affidavit of Mark Anthony Wilks, affirmed 9 February 2006.

HIS HONOUR:   Again, we have two which are the same in form?

MR GREEN:   My client has only been served with one, in proceeding S121.  I am assuming they are identical.

HIS HONOUR:   They seem to be the same length.  Are they identical, Mr Pritchard?

MR PRITCHARD:   They are, your Honour.

HIS HONOUR:   What is the objection to any of that?

MR GREEN:   The first objection is to paragraph 10, the words “nor is it expected to be received.”  If that is somehow deployed in a way justifying the present matter, then it can be done in a proper way, I submit.

HIS HONOUR:   Do you press that, Mr Pritchard?

MR PRITCHARD:   Yes, your Honour.

HIS HONOUR:   What is the relevance of it?

MR PRITCHARD:   Your Honour, this is an interlocutory application.  It is a statement of belief as to expectation.  It is not, in my submission, a matter genuinely or bona fide in dispute.  There can be no suggestion of a serious nature, from my friend on instructions, that there is any expectation that the company will deliver a dividend distribution.  Your Honour, these objections have not been formally notified prior to my friend standing.  If there had been, it could have been formally proven by evidence from the liquidator, but there is no genuine or bona fide dispute there will be no dividend distribution from the company. 

So, your Honour, if there had been formal notification, prior to my friend raising about that sort of objection, it could have been cured easily.  But in the absence of prior notice, notwithstanding this affidavit was served some few weeks ago, I do press it in those circumstances, your Honour.

HIS HONOUR:   The proof was admitted on 28 July 2003, which is two and a half years ago.  There has been no dividend in that time.  What is the relevance of the fact that none is expected to be received?

MR PRITCHARD:   As your Honour would have observed, the costs orders that were suffered by my friend’s client were both by the company and the natural person.  There is no expectation of any dividend distribution from the company.  So the only potential recourse for any recovery in respect to these costs orders in the past or into the future is by reason of the enforcement of these costs orders against Mr Yates personally. 

So it is to demonstrate we have no other avenue available to us to recover, or any other expectation at least available to us to recover any money from this costs order.  It being a joint and several liability, obviously the costs order, Mr Yates and the company, then we could have obviously chosen to enforce that order against the company and, if satisfied, that that satisfaction by the company would satisfy Mr Yates’ obligation also under the costs order.

HIS HONOUR:   That 1.33 million includes the $80,000-odd of the High Court costs?

MR PRITCHARD:   I am sorry if that did not make that clear.  Yes, your Honour, that includes the High Court costs of the $80,000‑odd and also the more substantive but to date formally untaxed amount being the Federal Court costs below.  They are not sought yet to be enforced against Mr Yates because they have not been taxed.  The liquidator of the company has admitted to proof that amount without the requirement of formal taxation.

HIS HONOUR:   Thank you.  Mr Green, is it in dispute that the company is not likely to respond to the claims for costs?

MR GREEN:   I cannot answer that question, your Honour, except to say that I would not be asking your Honour to draw any other conclusion other than since 2003 no dividend has been received.  But the prejudice that “nor is it expected to be received” without the basis stated for the opinion is rather unfair.

HIS HONOUR:   What is the prejudice?

MR GREEN:   The prejudice is my friend has now indicated there are some other amounts outstanding which do not relate at all to these proceedings.  They cannot possibly be relevant to the question of whether a slip has occurred, what your Honour is being asked to do.

HIS HONOUR:   But that reasoning would mean the whole of paragraph 10 would be irrelevant.

MR GREEN:   Quite, your Honour, and I am holding out the olive branch to my friend.  I only objected to that part which was the most objectionable.

HIS HONOUR:   I will allow the objection to the last six words of paragraph 10.

MR GREEN:   If the Court pleases. 

HIS HONOUR:   Anything more on Mr Wilks?

MR GREEN:   Yes, there is, your Honour.

HIS HONOUR:   Yes.

MR GREEN:   Paragraph 11, the second sentence.  Even on interlocutory application section 75 requires the provision of the source of information and it is unclear in any event in paragraph 11 what time that is.

HIS HONOUR:   Yes.  Mr Pritchard, what is the relevance of Minter Ellison having served a bankruptcy notice?

MR PRITCHARD:   It explains why inaction occurred, or action did not occur, in respect of my client’s prosecution of its costs orders for a period after January 2003. 

HIS HONOUR:   Is that relevant to what we are doing today, or was it rather relevant to what happened in front of Justice Gummow?

MR PRITCHARD:   My submission is it is primarily relevant before Justice Gummow but, nevertheless, the Court would be interested to know, even on this application, if there is any proper explanation for a delay.  So while it is not the motivating discretionary consideration on this application as it was before Justice Gummow, nevertheless, it is a factor to have regard to in the overall exercise of the discretion permitted under this rule as opposed to the rule that Justice Gummow was concerned with.

HIS HONOUR:   Yes, thank you.  Mr Green, do you take some point about delay in defence to the summons?

MR GREEN:   Yes, I do.

HIS HONOUR:   What is the nature of that point?

MR GREEN:   The point in relation to delay is simply this.  The matters that are presently being agitated – or there are several points, your Honour.  Does your Honour want me firstly to answer the observation your Honour made in relation to the orders in one set of proceedings then the other?  Does your Honour wish me to develop my ‑ ‑ ‑

HIS HONOUR:   You mean the no costs order on the special leave not mentioned at the end of the appeal?

MR GREEN:   Yes, your Honour.

HIS HONOUR:   I think we can save that to the end unless you think it is relevant to some issue of these issues of admissibility.

MR GREEN:   Well, if I may foreshadow ‑ ‑ ‑

HIS HONOUR:   I can see the point of that, but would it matter whether the point had been taken 10 days after the Full Court had given its orders or years afterwards, as is the case?

MR GREEN:   Would that point ‑ ‑ ‑

HIS HONOUR:   Would that matter to this Court’s amendment of its own order?

MR GREEN:   Yes, it would.  It would for this reason, your Honour.  In the High Court Rules 10.01.1 there is an impediment to the execution upon an order of the Court more than six years from the date of judgment or order. 

HIS HONOUR:   Yes.

MR GREEN:   We are here in a rather strange circumstance, that the order made on 12 February 1999 is more than six years.  In fact, the six years expired on 13 February last year.  In relation to the other order, that is, the order made in the appeal proceedings, that order still has some days to go.  As to the question of whether or not there was a slip or whether it was an intentional error, that is something developed in my written submissions, your Honour, but the point simply is this, that there can be no slip in these circumstances because, as what the Full Court said in Smith Kline & French v Commonwealth 173 CLR 194. I have a copy for your Honour.

HIS HONOUR:   Thank you.

MR GREEN:   I notified my friend of this shortly before – if your Honour considers what was said at page 217 at about point 8 on that page.  The proceedings for special leave were proceedings brought pursuant to the Federal Court of Australia Act, as your Honour would recognise.

HIS HONOUR:   Judiciary Act?

MR GREEN: No. Because this was an appeal from the Full Court of the Federal Court, the right to appeal to this Court is governed by section 33(3) of the Federal Court of Australia Act 1976.

HIS HONOUR:   Yes.

MR GREEN:   The point about that is in Smith Kline & French two challenges were brought to the nature of the special leave power. Relevantly, for your Honour’s purpose, your Honour is concerned with the operation of section 33(3) of the Federal Court of Australia Act.  At page 217 of their Honours’ reasons the Court said this at about point 9:

The Court’s function in granting or refusing special leave is not a legislative function, a matter to be discussed in a little more detail –

Then turning to page 218, about half way down that page:

Notwithstanding these special features, an application for special leave to appeal, like an application for leave to appeal, is an accepted and long‑standing curial procedure in this country.  The procedure calls for a hearing, whether orally or on written materials, and a determination in the form of a curial order.  If the application be refused, the order dismissing the application is the final curial act which brings the litigation between the parties to an end.  An application for special leave to appeal therefore involves the exercise of judicial power.

Relevantly, this, of course, was a challenge on a constitutional basis, but relevantly, the Full Court’s findings and the Full Court’s holdings, as set out on pages 217 and 218, your Honour, mean necessarily that the orders made by this Court in proceedings S121 of 1998 were separate and distinct from the orders made in proceedings S29 of 1999.  Insofar as an order was made in proceedings S121 of 1998, which is effectively a contingent order – the order was made on a particular date, that is 12 February 1999.  The entitlement to that order was contingent upon the outcome of an appeal.  It did not require any further order from the Court to make good that holding.  The transcript, your Honour, appears relevantly on page 80 of MMC1.

HIS HONOUR:   Yes.

MR GREEN:   As my friend has indicated, Mr Allsop made an application for costs of the application and her Honour Justice Gaudron said:

No.  As in the ordinary course, they will await the outcome of the appeal.

Now, the ordinary interpretation of that, and, of course, the practice in this Court is that it necessarily follows that the victor on the appeal will be entitled to their costs of the special leave application unless a special application was made.  But the logical effect, I submit, your Honour, is that that order and the indication of that position on 80 means exactly as is recorded in relation to the 51.01 of the current Rules, is that the costs in the cause – the cause was then determined and, by reason of her Honour Justice Gaudron’s ruling, that cause was determined in favour of the current application.  If any confirmation was needed of that, it is the fact that the bill of costs commencing on page 101 of MMC1 unmistakably includes – and I invite your Honour to turn to page 117 of MMC1 and turn to item 266.

HIS HONOUR:   Yes.

MR GREEN:   In item 266 your Honour will see from the top of the page this is February 1999 and 12 February item 266 is “Attending at Court for hearing of application”.  So what the applicant did in this case is the applicant sought to have taxed in the one bill of costs two distinct curial applications before this Court. 

Now, ordinarily that would perhaps not matter as to the validity of a bill of costs, but what has happened now, your Honour, is, as there has been an effluxion of more than six years, this bill and therefore – the bill that was submitted – and your Honour can see from it, it is in evidence – the certificate is based upon a bill part of which is necessarily unenforceable by reason of the operation of rule 10.01.1.  Of course, the Judiciary Act in section 77M which ordinarily applies to the execution of orders of the Court expressly carves out from its operation any contrary rule in relation to the rules of this Court.  That is the first section of subsection (1).

HIS HONOUR:   Can you just give that section again?

MR GREEN:   Section 77M, which deals with the enforcement of judgments.  Subsection (1) commences “Subject to the Rules of Court”.  Ordinarily the rule is, of course, that this section, as has been written about in many cases, picks up and applies as if it is a law of the Commonwealth the law of a State and a Territory in which the judgment is sought to be enforced.  There is nothing controversial about that from a constitutional perspective.  However, the problem for my friend is that that section is directly subject to the rule‑making power of the High Court and the High Court has chosen to promulgate rules in 10.01.1 that are directly inconsistent and, therefore, that section has no application.  So we are here dealing with a period of six years.

HIS HONOUR:   What is the relationship between 10.01.1 and 10.01.2 and 10.01.3?  I mean, if it were after six years, then presumably 10.01.2 would apply.  That is to say, a person claiming execution could apply to a Justice for leave to issue execution.  Then, I suppose, sub‑rule 3 describes the powers of the Justice on that occasion.

MR GREEN:   Yes, but 10.01.1 does not give your Honour any discretion unless it does not apply.  To do what my friend contends for is, in a practical way, to avoid the consequences of rule 10.01.1.

HIS HONOUR:   To amend an order of the Court less than six years after it was made, but, I grant you, underlying that order there is an element more than six years, is that issuing execution?

MR GREEN:   Well, the reason why it becomes a practical effect is the only basis upon which my friend comes to this Court is to seek orders which, on his own case, are said to support an application for bankruptcy or an application in the nature of an execution upon an entitlement.  For that reason, 10.01.1 must be engaged, I submit.  To allow my friend to amend, effectively, to take advantage of the time differential between the two – and on his own case he obviously recognises that he has problems both under the Bankruptcy Act as well as under the Rules in relation to the later order, as in April – is to, in effect, reward him or the insurer standing behind him for their inactivity during this period.

HIS HONOUR:   Let us just go back a step.  Let us say this was all happening less than six years after the special leave application was determined.  Would you still be taking a point on delay?

MR GREEN:   If this activity happened less than six years afterwards, there is nothing I can say in relation ‑ ‑ ‑

HIS HONOUR:   In other words, it is not so much the delay; it is simply the passage of six years.

MR GREEN:   No, I would still be taking the point in relation to delay, as set out in the submissions, for the reasons given in relation to the activity of AMP and the evidence given by Mr Yates in relation to that topic.  There are several strings to the bow.  The first is there is simply no slip, your Honour.  Simply, there is no error disclosed in the orders made by the Court that justifies this Court making any change to those orders.  Everyone knew what their practical effect was and they proceeded on that basis.  They proceeded to submit a single bill of costs, albeit, that was their election, rather than to split the bills of costs, a single bill of costs.  The certificate issued in relation to the two sets of proceedings.  So the bill of costs and the certificate of taxation based upon it, practically speaking, would always consist of two judgements…..necessarily, we are in two matters.  Whether or not the later matter, the later curial procedure, gives context to the earlier, the practical entitlement to the entitlement for costs proceeded from the earlier order and the certificate of taxation, on its face, records that. 

The second matter, your Honour, is that Mr Yates gives evidence.  Your Honour has not yet formally read that evidence.  It has been read but your Honour has not yet read it, as in read through it.  That evidence demonstrates that it is common ground there was litigation culminating on 22 January 2003 in which a bankruptcy notice had been presented and a creditor’s petition was heard on that day and there was a dismissal of that creditor’s petition – that is a creditor’s petition brought by the present applicant against my client – and that was dismissed with no order as to costs.

Now, there is a very long gap between 22 January 2003 and, at least, being fair to my friend, December 2005.  The evidence of Mr Yates discloses that in that intervening period he endeavoured to settle up and did settle up with any person, any entity – that is any insurer – wishing to proceed against him on costs.  So he settled up with LawCover the evidence discloses, being the insurers of Abbott Tout, and he formed the view, as his evidence discloses, that the likelihood of HIH claiming against him was minimal, therefore, the application by Mr Webster was minimal, and the likelihood of AMP, Mr Simos’ insurer, claiming against him was not to happen because of correspondence that occurred in April 2003, which is annexed, and he gives evidence and Mr Talbot gives evidence of that fact, that Mr Talbot went on a self‑appointed delegation to the insurer, AMP, and sought some assurances.  I will take your Honour to that evidence in terms in due course.

The effect of all of that was that having regard to the fact that as at 22 January 2003 a short time after that nothing much happened.  On my client’s case he heard nothing from them between April 2003, practically speaking, and when he was served in December 2005.  There was simply no communication.  But to suggest that in some way my client is avoiding obligations is to fail to consider the long period of time in which nothing at all happened.

HIS HONOUR:   Just if I could interrupt.  As far as I am concerned, I am not reading this evidence as suggesting that your client is evading obligations.  You have this question which I will call technical, the operation of the order under the new Rules, and possibly under the old Rules.  The question is, is delay material to that issue or any other?

MR GREEN:   Delay is not material to the issue in 10.01.1, it is clear, because it could have ‑ ‑ ‑

HIS HONOUR:   Because it is a six year period?

MR GREEN:   Yes, your Honour, and it could have been, if my friend had come to the Court ‑ ‑ ‑

HIS HONOUR:   On that basis then, is not so much of Mr Wilks’ affidavit as tries to explain delay irrelevant?

MR GREEN:   Yes, your Honour.

HIS HONOUR:   Does not quite a lot of it seem to be in that category because it narrates events that, as it were, filled up the time?

MR GREEN:   Yes, but it is relevant, I concede that, to the last plank in my client’s case which is the observations made in L. Shaddock v Parramatta City Council which is on my friend’s list of authorities at page 597 at about point 5 where their Honour’s accept that – assuming that your Honour was favouring my friend – and I have not yet put all the arguments against the idea there was no slip at all – but assuming that your Honour identifies a slip, then the right to correct that slip is not something as or right and courts have turned to the question of delay and are prepared, and this Court has been prepared, to postulate that delay, in certain circumstances, might be sufficient to preclude an order being made to correct the slip.

I accept that for that purpose, your Honour, this evidence may be relevant.  The objections are taken as to form and as to the – if they are deployed in that way, they have marginal relevance.

HIS HONOUR:   Yes.  Perhaps so that I get the problem in an overall fashion, what else in Mr Wilks’ affidavit do you object to, apart from paragraph 10, the second half, and the second sentence in paragraph 11?

MR GREEN:   Paragraph 12.

HIS HONOUR:   Just give me the numbers and I will mark them, so I know.

MR GREEN:   Thank you, your Honour.  Paragraph 12, the entirety of paragraph 12 as to relevance; paragraph 23, as to form.

HIS HONOUR:   The hearsay aspect of it or the absence of direct speech?

MR GREEN:   Both, your Honour, but I accept if my friend says this is a section 75 application then the absence of direct speech makes it formally…..It is said that, upon the basis of something said by Ms Carlsund, certain things were done by persons other than the person giving the affidavit.  And paragraph 32(b) through to (d).

HIS HONOUR:   Paragraph 32(b), (c) and (d).

MR GREEN:   Yes, your Honour, (b), (c) and (d).  I think 32 may be being read in relation to the application that was concluded before his Honour Justice Gummow rather than in relation to this application.  It seems to be directed to the question of the time bar that operates…..leave.  My friend does not read it in this application ‑ ‑ ‑

HIS HONOUR:   That is something you can tidy up now.  Do you read that in this application?

MR PRITCHARD:   Yes, your Honour, I do.  Your Honour, my friend at the end of his delivery made it quite clear that he is relying on delay in opposition to the orders today and, having regard to that, I do read it.

HIS HONOUR:   Yes, thank you.  Mr Green, if we go back to paragraph 11, which is where we started, it is not in dispute that the bankruptcy notice was served in early 2003.

MR GREEN:   I am not sure about that, your Honour.  I cannot assist your Honour at this point in relation to that.  Mr Yates, I am instructed, cannot presently recall whether that is correct or not.

HIS HONOUR:   Is it correct that Minter Ellison ever served a bankruptcy notice on Mr Yates?

MR GREEN:   Yes, it is, your Honour.

HIS HONOUR:   What is uncertain is what the date was?

MR GREEN:   Yes, your Honour, but there is also the objection to the basis for delay in relation to knowledge that the – it is submitted that it cannot be relevant what another party did in proceedings where there was a several entitlement to costs.  The fact that someone chose to wait for another party to issue a bankruptcy notice cannot be a basis for not approaching this Court and correcting the record, bearing in mind that at all times what has been said is that we became aware in January 2003 of a problem and, for whatever reason, we sat on our hands and did not do anything until December 2005.  In that respect, one cannot ‑ ‑ ‑

HIS HONOUR:   I need not trouble you any further, Mr Green.

MR GREEN:   Yes, thank you, your Honour.

MR PRITCHARD:   May I just have a word with my friend, your Honour, just about a matter of whether it is not in dispute in regard to his own evidence in this case?

HIS HONOUR:   Yes.

MR PRITCHARD:   I am prepared to admit that on 2 June 2003 proceedings were commenced but not in early 2003.  Your Honour, it is part of my friend’s own evidence in part of a confidential exhibit in a recital or defined term in that document that the creditors, that is for whom Minter Ellison acted, issued a creditor’s petition in May 2003.

HIS HONOUR:   Yes, just take me to that precise place.

MR PRITCHARD:   Thank you, your Honour.  It is the confidential exhibit.

HIS HONOUR:   I have that.

MR PRITCHARD:   It is tab 1 and it is the fourth page.  The page number is at the bottom right‑hand side of the page and your Honour will see the definition of “creditor’s petition”.

HIS HONOUR:   Yes.

MR PRITCHARD:   That is the subject matter.

HIS HONOUR:   And “partners” is defined somewhere, is it?

MR PRITCHARD:   That is the ‑ ‑ ‑

HIS HONOUR:   Yes.  Minter Ellison, I see.

MR PRITCHARD:   Your Honour, just ever so briefly to engage on the relevance point.  It is of course obvious, your Honour, that if a person is made bankrupt that then the obligation to admit or reject claims by way of proofs falls for consideration by the trustee.  If someone is made bankrupt, there is no point in bringing another bankruptcy proceeding at the same time.  In fact, I think, your Honour, the Rules prohibit you from doing so.  The company rules certainly do.  I am sure there is a similar rule in the bankruptcy regime.

If there is a creditor’s petition on foot, another creditor simply cannot bring another creditor’s petition.  They can join it as a supporting creditor and that is all.  So the fact there was insolvency proceedings on foot effectively meant my client could not also bring their own separate insolvency proceeding.  That is the relevance of that, your Honour.

HIS HONOUR:   Mr Green, on paragraph 11, if we, as it were, read it but bear in mind that it was not early 2003 but rather 2 June 2003, is there any problem with that?

MR GREEN:   Yes, I am content with that.

HIS HONOUR:   Very well.  That part will be allowed with that correction, as it were.  Now, paragraph 12 you object to on grounds of relevance only, or other grounds too?

MR GREEN:   In the light of what my friend said, I withdraw the objection to paragraph 12.

HIS HONOUR:   If we go next to paragraph 23, I am inclined to admit that because the terms of the conversation do not matter so much as the fact that it triggered something.

MR GREEN:   If the Court pleases.

HIS HONOUR:   Then we have (b), (c) and (d) of paragraph 32.

MR GREEN:   Yes.  It was read on the same basis as Ms Carr’s affidavit was read, simply a statement of motivation there.

HIS HONOUR:   Are you happy, Mr Pritchard?

MR PRITCHARD:   Yes, your Honour.

HIS HONOUR:   I will allow it on that limited basis.

MR GREEN:   If the Court pleases.

HIS HONOUR:   Where do we go next?

MR PRITCHARD:   That concludes my friend’s objections to my affidavits.

HIS HONOUR:   Yes.  We have done Carr of 1 December and we have done Wilks of 9 February.  Is Carr of 9 February all right or do you have objections to it?

MR GREEN:   Carr of 9 February is the – there are two, one in each proceeding.  I have already taken the objection to that in paragraph 55 and what was read on a limited basis, your Honour.

HIS HONOUR:   Do you want to cross‑examine any of those ‑ ‑ ‑

MR GREEN:   No, I do not, your Honour.

HIS HONOUR:   Very well.

MR GREEN:   Subject to my evidence being admitted.

MR PRITCHARD:   I do not quite know what that means, your Honour.

HIS HONOUR:   Do you object, Mr Pritchard, to any of Mr Green’s affidavits?

MR PRITCHARD:   Yes, your Honour, and there is a substantial preliminary objection in relation to the affidavits of Mr Talbot and Mr Yates which I think, in my submission, it would be appropriate, subject to your Honour’s views, for your Honour to deal with first.

HIS HONOUR:   Shall we start with Mr Yates?

MR PRITCHARD:   If it is convenient, your Honour.  They perhaps can be dealt with together because they, no disrespect, dovetail into one another.

HIS HONOUR:   Is it the whole of Mr Yates?

MR PRITCHARD:   Yes, the whole of both of Mr Yates and Mr Talbot.

HIS HONOUR:   Mr Talbot’s affidavit is attractively short.

MR PRITCHARD:   A superficial attraction, your Honour.

HIS HONOUR:   That seems to demonstrate that Mr Talbot endeavoured to negotiate with an officer of AMP.

MR PRITCHARD:   And he, on his evidence, concluded a deal with is now sought to be relied upon in opposition to these orders.  He asserts that a legal officer of AMP said, in effect, “Don’t worry about it, mate, we’re not going to enforce anything against Mr Yates” – Mr Talbot’s evidence – “Oh, can I have something in writing to that effect?”  He says, “No, with a matter of internal procedure we don’t do things like that in writing.”  That is the thrust of Mr Talbot’s evidence and he says he relayed that evidence to Mr Yates.  Mr Yates says in his affidavit served yesterday afternoon that he relied on that in entering into his deal with LawCover.

Now, your Honour, the evidence presumably put forward as prejudice in relation to why these orders should not be made, the prejudice arising out of delay, there are a couple of things to be said about those affidavits, your Honour.  The first is just to remind your Honour of the evidence, and I think an agreed fact, that Mr Yates was served in these proceedings on 9 or 6 December 2005.  The matter first came before the Court last Tuesday week before his Honour Justice Gummow.  No orders were sought or directions made in relation to the serving by my friend of any affidavit evidence.

This material came forward, it will not be disputed, yesterday afternoon for the very first time.  This evidence if to be read – and the first proposition, your Honour would exclude it in its entirety having regard to the late nature of its service and the prejudice undoubtedly suffered by my client, having regard to the allegations made.

HIS HONOUR:   Or we could cure that by an adjournment.

MR GREEN:   Yes, we consent to that.

MR PRITCHARD:   You could, your Honour.

HIS HONOUR:   What worries me a bit is it sounds like rather a big issue, factually – you know, controversial, potentially controversial.

MR PRITCHARD:   Your Honour, it is certainly controversial.  We have spoken to the legal officer involved overnight.  She is no longer with AMP.  She denies the conversation alleged and it maybe falls for that consideration and that could be brought forward.

HIS HONOUR:   Do you wish to call evidence to contradict Mr Talbot’s affidavit?

MR PRITCHARD:   Yes, your Honour, I do, in due course.  I wish to though make a submission that – so it is objected to on that basis.  If your Honour is prepared to allow an adjournment to allow my client to deal with it – that is obviously not what I seek, your Honour.  I seek that it be excluded but I appreciate the position, but I do point out there is no ‑ ‑ ‑

HIS HONOUR:   Let us test it this way.  If a sealed contract had been entered into, that would have some bearing, would it not, on whether these orders should be changed?

MR PRITCHARD:   No.  That is the submission, your Honour, I wish to make.  It is irrelevant.

HIS HONOUR:   Right.

MR PRITCHARD:   If Mr Yates wants to ventilate these allegations – and I am not suggesting for a moment he cannot ventilate them – they are not for ventilation in this Court.  Mr Yates can raise these in the bankruptcy proceedings.  He can allege these matters constitute an alleged cross‑claim, set‑off or counter‑demand under the relevant rules of the – I think it is actually the legislation.

HIS HONOUR:   Your argument is this, that if an attempt is made to bankrupt him on the strength of the $80,000‑odd costs order, he can allege that Mr Simos is estopped from endeavouring to rely on the bankruptcy notice based on that debt because it has, in effect, been forgiven by a contract under seal or, as it happens here, some sort of oral waiver or termination?

MR PRITCHARD:   So there is no suggestion, your Honour, that my client seeks to exclude Mr Yates the opportunity so advised and in an appropriate form from ventilating these rather colourful allegations but, nevertheless, your Honour, the proposition remains – and I do have instructions and I would make the open statement to the Court – that my client would not take a point in the subsequent bankruptcy proceedings, either in an application by my friend to set aside the bankruptcy notice or in opposition to the subsequent sequestration order if such application is made, that this point was not ventilated or determined here.  So my client would not say this is a matter that should have properly been brought and determined by the High Court on this application.

So we do not seek to take any unfair or improper advantage of the exclusion of this evidence.  We wish to preserve to Mr Yates the ability, if so advised, to pursue these allegations, but my primary submission is having regard to the late nature of the service of the material, the inevitability of the need for – my friend says it is not late.  It is true there is no breach of a rule, your Honour, but your Honour is well aware of the requirement of procedural fairness that requires that any affidavit to be read must be served within a reasonable time prior to the hearing of the occasion.

Your Honour, on any view, having regard to the allegations and the nature of the allegations made by Mr Yates in that material, and Mr Talbot, it was not a reasonable thing to have done to have served it – or reasonable notice not being given – yesterday afternoon.  So, your Honour, that deals with that proposition, in my submission.  Then one considers what I have said, your Honour, namely, that provided my client takes no point about this as a matter that can be ventilated subsequently by Mr Yates in an appropriate jurisdiction, then he suffers no prejudice by the exclusion of that evidence, which is what I am asking your Honour to do, because it would necessitate a full day hearing.

HIS HONOUR:   Yes.

MR PRITCHARD:   That is the problem, your Honour.  That is a matter that can be dealt with on proper notice and inquiry and subpoenaed material in the Federal Court on a bankruptcy application, because I need to say to your Honour that to deal with it properly and fairly to my client, not only would my client need the adjournment to simply put on an affidavit from Ms McCrossin saying this conversation, as alleged, did not occur in those terms, I would need to prove to the Court that Mr Yates suffered no real prejudice because he was financially impecunious anyway.

HIS HONOUR:   Yes.  I think ‑ ‑ ‑

MR PRITCHARD:   I am sorry, your Honour, that is probably going a bit far.

HIS HONOUR:   No.  I think we have got to this position.  Whether it is later or not, it cannot be an objection to it being relied on.  It is late by a matter of days.  We are talking about more than six years.  Of course, no Justice of the Court can hear any application for the next fortnight because we will all be in Canberra, but a Justice could hear it after the elapse of that fortnight, in Sydney or Melbourne – probably not Brisbane.  How long an adjournment do you need?

MR PRITCHARD:   I would need 14 days at least, your Honour, one for the McCrossin evidence but the subpoenaed material to Mr Talbot and ‑ ‑ ‑

HIS HONOUR:   This subpoena to Mr Talbot is going to what?

MR PRITCHARD:   Going to any documentation in relation to this alleged transaction he said he did as a good turn to Mr Yates.

HIS HONOUR:   That will not take very long to ‑ ‑ ‑

MR PRITCHARD:   That would not take long for him but Mr Yates ‑ ‑ ‑

HIS HONOUR:   It will not take long for you to serve it and it probably will not take very long for him to answer it.

MR PRITCHARD:   No, it is not.  When we got that material yesterday afternoon my solicitor wrote immediately to my friend’s solicitor and said we object and you have heard, in fact, what has fell from me, your Honour, and what we are saying and also we put forward – and your Honour may need to hear this application, having regard to the time constraints – we have said if you are going to rely on this sort of material, here is a draft subpoena in relation to your financial affairs over this period to prove, or disprove, if it be the case, that you have actually suffered any financial detriment at all. 

Assuming this was done and assuming it was a proper deal, it is an estoppel point at the highest, material detriment not being suffered because you are financially impecunious, if it be the case, at the time and you are financially impecunious now; alternatively, you are financially solvent at the time and you are financially solvent now.  So there has to be a change of, in effect, net financial position by reason of the deal he did.

HIS HONOUR:   What are these time limits in relation to bankruptcy that you have just referred to?

MR PRITCHARD:   Your Honour, 11 April is six years from the Full Court’s costs order, if I can call it that.  The Rules of this Court require under Part 10.01 that my friend took you to about the six year point about execution and I think it is uncontroversial that the issue of a bankruptcy notice would constitute execution.  I do not think there is any dispute about that.  Further, your Honour, there is an additional section of the Bankruptcy Act – I think it is section 41; I am sorry, your Honour, I do not recall – that provides that bankruptcy notices must be founded on judgments not older than six years.  So there is a six year ‑ ‑ ‑

HIS HONOUR:   We are in February.  April is a form of crunch time, but to adjourn this for two and a half to three weeks is not fatal from that point of view.

MR PRITCHARD:   No.  The only other matter I would put before the Court is, again, in an endeavour, perhaps futile, understandably, to attract your Honour to this proposition that I have propounded that the matter should go over to another jurisdiction, is that at the highest the determination by your Honour of this issue in dispute between Messrs Talbot and Yates on the one hand and perhaps Ms McCrossin on the other would only be an interlocutory decision.  It would be an interlocutory decision in the context of this interlocutory application, being an application to amend or vary. 

The proper forum for the determination of that dispute is best done, in my submission, in a jurisdiction where it would be heard and determined on a final basis, namely, the bankruptcy proceedings.  So, in effect – well, my friend says it is not final but, your Honour, in my submission it is, in effect.  It is more final than this.  It would be a proper determination – and who is to be believed, which is something I would imagine your Honour is not going to get terribly deeply into, having regard to ‑ ‑ ‑

HIS HONOUR:   If there is a conflict, I do not see how an issue of fact – the trier of fact will have to determine the conflict.

MR PRITCHARD:   Your Honour, it depends.  It does depend on the nature of the term hearing interlocutory proceedings – and, again, your Honour, this is an interlocutory application.  Normally, the trier of fact does not determine a substantial issue of credit.  I am not saying, your Honour, this is invariably the case or perhaps even the case here, but what usually happens is the trier of facts says, “Taking the evidence of the plaintiff at the highest, then how, as it were, on an interlocutory injunction basis – accepting the evidence of the plaintiff at the highest, how do I then proceed?”

HIS HONOUR:   I think it is an imperfect analogy.

MR PRITCHARD:   It perhaps is.

HIS HONOUR:   There is not going to be, except possibly in the Federal Court bankruptcy proceedings, any trial of this issue about the conversation

and reliance on it, but I am not actually particularly strongly wedded to what I take to be Mr Green’s position on this.  He may well be right that it is inappropriate for it to be determined in these proceedings, but I do not think I can decide that in a twinkling of an eye right now.  One could easily come to a wrong conclusion.  Mr Green, is there anything wrong with this being adjourned until not next week, not the week after, but the one after that?

MR GREEN:   There is no difficulty with that course, your Honour.  It may be if those instructing me made an informal proposal to those instructing my friend in relation to informal production of the material sought, subject to confidentially, that may speed the time up in relation to that material.

HIS HONOUR:   I think that the best thing to do is that the parties should remain in touch with the Registry to see which Judge can hear it in that week.  One member of the Court is ill and there are problems in assembling a tribunal, but there will be a Judge.  So if you stay in touch with the Registry.  Is there any formal direction that anyone desires?

MR PRITCHARD:   There are two, your Honour.  One I have just briefly discussed with my friend.  Might we have leave to approach you or another Judge of the Court for leave to issue – I think they are called summonses in this Court, being in effect subpoenas.  Apparently, according to the Registry, they need to be signed by a Justice of the Court.  That is by agreement, your Honour, subject to your Honour’s indulgence, that we have that leave.

HIS HONOUR:   So I grant leave to the parties to approach a Justice of the Court to issue any summons as desired.  Having granted that leave, I should point out that it should really be done in the next ‑ ‑ ‑

MR PRITCHARD:   Forty-eight hours, your Honour.

HIS HONOUR:   Yes, because there will not be any Justices around the next fortnight to speak of.  The other direction you wanted?

MR PRITCHARD:   Your Honour, having regard to what has fallen from my friend for the first time, with no disrespect, in relation to the Part 10.01.1 point, I make application for leave to file an amended summons, for the avoidance of any doubt, to seek leave, should leave be required, to issue execution as required by that rule past the six year date.

HIS HONOUR:   What do you say to the second direction, Mr Green?  As I understand it, he wants leave to file it without prejudice to its merits.

MR GREEN:   Of course, your Honour.  There may be a need – I cannot foresee this now but reserving my position in relation to any additional evidence that might fall from that, the amendment of that application.  I do not think my friend would want to put on any additional evidence in support of that amendment.

HIS HONOUR:   No.  There is a third direction though that – do you want any time by which any affidavits in reply to Mr Yates’ and Mr Talbot’s ‑ ‑ ‑

MR PRITCHARD:   Yes, your Honour, that would be convenient.

HIS HONOUR:   What ‑ ‑ ‑

MR PRITCHARD:   I am really in my friend’s hands as to how quickly, but the sooner the better.  So as to give my friend a reasonable opportunity, your Honour, might we have until Wednesday, 8 March, which is halfway through that second week that the Court is in Canberra.

HIS HONOUR:   Mr Green, is that suitable to you?

MR GREEN:   That is convenient, your Honour.

HIS HONOUR:   All right.  I will make a second order, which is to grant leave to the appellant to file an amended summons with a view to issuing execution six years after the time fixed by rule 10.01.1.  Thirdly, I direct that any affidavits to be relied on by the appellant in answer to those lately filed by the respondent be filed and served on or before Wednesday, 8 March 2006.

MR PRITCHARD:   Would you reserve costs of today, your Honour?

HIS HONOUR:   Yes.  I reserve the costs of today.

MR PRITCHARD:   If the Court pleases.

HIS HONOUR:   The Court will now adjourn.

AT 10.42 AM THE MATTERS WERE ADJOURNED