Simos v Yates

[2000] HCATrans 142

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S29 of 1999

B e t w e e n -

THEODORE SIMOS

Appellant

and

IAN FRANCIS YATES

Respondent

GAUDRON J
McHUGH J
GUMMOW J
HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 11 APRIL 2000, AT 10.18 AM

Copyright in the High Court of Australia

MR J.L.B. ALLSOP, SC:   May it please, your Honour, I appear with my learned friend, MR P.R. WHITFORD, for the appellant.  (instructed by Corrs Chambers Westgarth)

MR D.K.L. RAPHAEL:   If it please the Court, I appear with my learned friend, MR A.G. DIETHELM.  (instructed by Bruce & Stewart)

GAUDRON J:   Yes, Mr Allsop.

MR ALLSOP:   Your Honour, the parties are now agreed in this matter that the appeal should be allowed and orders 3 and 5 in appeal book volume 4 at page 1054 made by the Full Court should be set aside.

GUMMOW J:   Just a minute.  Page 1054?

MR ALLSOP:   Yes, your Honour.

GUMMOW J:   Orders 3 and 5?

MR ALLSOP:   Orders 3 and 5, they being ‑ ‑ ‑

GAUDRON J:   I have got directions there.

MR ALLSOP:   I am sorry, your Honour.  My apologies, your Honour.

HAYNE J:   It is 3 and 5 at 989 as modified by 1053.

MR ALLSOP:   Page 1053.  I am indebted to your Honour.  That is the ‑ ‑ ‑

GUMMOW J:   Wait a minute.  Page 989, 3 and 5.

MR ALLSOP:   Could your Honours perhaps go to paragraph 11 of our submissions where all the orders are set out quite clearly.

GAUDRON J:   Yes.

MR ALLSOP:   The issue remaining in the appeal is whether this Court should, in addition to those orders, dismiss the appeal of Mr Yates’ to the Full Court and thereby restore the orders of Justice Branson or remit Mr Yates’ appeal against the orders made in Mr Simos’ favour to the Federal Court for another or further hearing.  The appellant presses for the former course.  In our submissions in paragraphs 3 through 13 we chart the relevant history of this matter.  On 5 June 1997 her Honour Justice Branson published her reasons for judgment in the primary matter.

GAUDRON J:   Yes, I think we are familiar with the history.

MR ALLSOP:   If your Honour please.

GAUDRON J:   The real question you should address is why this Court should, itself, determine the appeal to the Federal Court .

MR ALLSOP:   Your Honour, that matter is dealt with in part IV of our written submissions and part V.  May I summarise by way of introduction:  this Court should deal with the issue, in the interests of justice, on three bases.  First, there was a determination after full hearing of the only issue before the Full Federal Court.  In that sense, there was a determination on the merits.  The Court gave no reasons.  However, the Court, in respect of the only matter before it, that is, an appeal from the exercise of a discretion, set aside her Honour’s order.  In that respect, the matter is different in kind to the appeals in Boland and Webster, which were dealt with by the Court last year, when the Court remitted to the Full Court Mr Yates’ appeal against the orders for personal costs on the basis that it was, and had been, unnecessary for the Full Court to deal with that matter because of their findings of negligence.

GUMMOW J:   Are we dealing with it now, though?

MR ALLSOP:   Yes.  In respect of Mr Simos, no other issue arose before them but the exercise of her Honour’s discretion in his favour.  So, the first matter is there has been a determination.

The second matter is that the matter is short and, we respectfully say, straightforward.  There were and are two matters raised by Mr Yates here as grounds to vitiate her Honour’s discretion.  They are contained within paragraph 13 of the submissions for Mr Yates in this Court, and if I could take your Honours to those, they are at page 5.  Two matters are identified:  a misconception of the principle in Knight; and a proposition that it was not open to her Honour to find that it was not unreasonable for the respondents at first instance not to have made an application for security.  Each of those matters can be dealt with shortly.

If, upon examination of those matters, it cannot be said that the respondent has shown a sustainable foundation for the Full Court’s vitiation of her Honour’s discretion, when he has had a full and complete hearing before the Full Court on the only matter before it, we respectfully submit that it would be wasteful and unjust to send the matter back to the Full Court for, in effect, a second hearing.

There is also one distinguishing feature in Mr Simos’ appeal from the other two appeals, which it is convenient to identify to illuminate the lack of merit in one of the two grounds of attack on her Honour’s discretion.  Would your Honours please go to appeal book volume 1 at page 225.  From page 224 your Honours will see that this was an affidavit of a Mr Lawson who was a partner of the firm acting for the second respondent who was Mr Simos and if your Honours forgive me using the names for the avoidance of confusion.

In paragraph 3 Mr Lawson deposed that on three occasions between April 1993 and February 1997, the trial commencing in March 1997, he:

made inquiries to satisfy myself as to whether the Applicant had reasonable prospects of being able to satisfy a costs order made against it in favour of –

Mr Simos.  He then identifies the occasion and says he:

formed the view, on each occasion, that, on paper, the Applicant appeared to be a company of substance and that a security application was likely to fail.

Mr Yates was represented at the costs hearing by senior counsel.  There was no cross‑examination of Mr Lawson.  At appeal book volume 4 page 824, her Honour ‑ ‑ ‑

GAUDRON J:   Are you going to the merits now, or are you going, really, to the question as to the course this Court should take?

MR ALLSOP:   I am going to both, with effect, your Honour.  As to the latter matter, can I put it more shortly, perhaps.

GAUDRON J:   Yes.

MR ALLSOP:   There was evidence in respect of what the other respondents thought about security, but no solicitor for the other respondents put on an affidavit akin to Mr Lawson’s affidavit.  And so, in a sense, there is a distinction of degree between the attack made in respect of each of the respondents as to why they did not take steps to apply for security for costs.  It is a point of distinction as to the attack on the failure to seek security for costs.  As a matter of distinction from Boland and Webster.  I will deal with it, if needs be, in a moment, if the occasion arises.

CALLINAN J:   Mr Allsop, could I ask you precisely what was before the Full Federal Court so far as Mr Simos was concerned?

MR ALLSOP:   Only the appeal by Mr Yates against the order in Mr Simos’s favour that Mr Yates pay the costs personally as well as the company.  And all the appeals by the companies, that is as to the merits and as to costs, had been dismissed ‑ ‑ ‑

CALLINAN J:   But there was a cost issue, so far as Mr Simos was concerned, before the Full Federal Court which was not decided.

MR ALLSOP:   The order was made.  Mr Simos had his order for costs taken away.

CALLINAN J:   Yes.

GAUDRON J:   The difficulty, really, is it seems, as best one can do, as if the Federal Court decided to take the order away as an interim measure to see what happened on a rehearing.

MR ALLSOP:   Your Honour, it does appear that that is what occurred in relation to the company’s costs order which actually was not before them.  If I may, without disrespect, use the expression, the troublesome last sentence does appear, when one looks at the transcript of the slip rule application and the slip rule judgment, to have been a sentence dealing with the company’s order which was, in fact, not before them.  On that Friday afternoon of the week, being the only day we appeared in relation to Mr Simos, that being the only day in which anything concerning him was to be dealt with, on that afternoon the company’s costs appeals were heard and Mr Simos’ costs appeals were heard.  We were only participating in Mr Simos’ costs appeal.

That order was taken away.  There are no reasons but the only legitimate basis upon which it could be taken away was a view that there was, or were, vitiating factors of the kind described in House v The King.  Now, we are not assisted by the exposure of that reasoning but that is all that was legitimately before the Full Court.

GAUDRON J:   Yes, well now, does that complete your submissions as to why this Court should determine the matter ‑ ‑ ‑

MR ALLSOP:   Of course I rely on what has been said in our written submissions, yes.

GUMMOW J:   What would you say about costs of this proceeding in this Court?

GAUDRON J:   That is really if the Court were ‑ ‑ ‑

MR ALLSOP:   If your Honours are against me and remit it.

GUMMOW J:   Yes.

MR ALLSOP:   We say we should have the costs, your Honour.  We say it is not unreasonable to ask for what we have done.  If your Honours are against us on that we say, for all the reasons we have put forward as to cost and delay that will occur, as to the narrowness of the issues, it is not unreasonable to bring it for your Honours for that adjudication.  If your Honours are against us on that, we should have the costs of the appeal certainly up to 20 March when the open letter was made.  There was a motion before her Honour Justice Gaudron earlier in March.

GUMMOW J:   Yes, I am aware of that.

MR ALLSOP:   Without troubling your Honour with the correspondence ‑ ‑ ‑

GUMMOW J:   The correspondence followed that hearing.

MR ALLSOP:   It did.  Up to that point we were being asked, because of what fell from the Chief Justice in paragraph 98, to have our special leave revoked.  There was an offer in on 2 June 1999 that the respondent said they would not fight the appeal on the merits but we say that we could not be expected to have that dealt with prior to the dealing with the main appeal.

GUMMOW J:   Yes, I understand that.

MR ALLSOP:   We then sought clarification in February of that position and then we, by letter which I can show your Honours, were asked to consent to our special leave being revoked.  The motion ‑ ‑ ‑

GUMMOW J:   What is the date of the letter.

MR ALLSOP:   I am sorry, your Honour?

GUMMOW J:   Just tell me the date of the letter.

MR ALLSOP:   The date of the letter was 5 or 3 March.  I will get it for you.  It was 3 March, your Honour, and then we received the open offer on the 20th.

GUMMOW J:   The 20th.

MR ALLSOP:   In fairness, Mr Raphael, at the hearing before her Honour, in open court, said they would consent to the appeal if the matter went back to the Full Court.

GUMMOW J:   Thank you.

GAUDRON J:   Mr Raphael, perhaps we could hear what is your position on the question as to the course this Court should take, including, if we happen to be for you, on the question of costs.

GUMMOW J:   For you on the question of remitter.

GAUDRON J:   Yes, if we happen to be for you on the question of remitter we need to hear you on the question of costs.

MR RAPHAEL:   You do not want to hear me on remitter?

GAUDRON J:   Yes, we do.

MR RAPHAEL:   The reasons for remitter are set out on page 3, commencing at paragraph 6, taking the matter through to 10.  There is not a great deal which I can add to that which is set out in that same, save to refer to the comments made in paragraphs 33 to 35 of my friend’s application which, quite frankly, do seem to contain some well phrased but hyperbolic statements and we deal with that in our comments in relation to the claim that it should be decided on the merits and the like.  It is our submission that your Honours should not accept the statement that the case has been determined on its merits.

Whether or not it was determined by the Full Court of the Federal Court correctly or no, none of us know because no reasons were given and it is for that reason, in essence, why the matter ought to be remitted back to the Full Court.  There should be no leapfrog of the Full Court, whatever one might think of the decision of the Full Court.  This is something I canvassed in a very brief time before your Honour Justice Gaudron last month.

GAUDRON J:   Now, did your offer, Mr Raphael, deal with the costs of the proceedings in the Full Federal Court?  I do not think it did, did it?

MR RAPHAEL:   No.  Well, it did to this extent, that we made the offer that the matter be – it is best set out in the letter which is an annexure to my friend’s solicitors of 20 March.  It is an annexure.  It follows the written submissions of our friends.  We on the first page point to:

The costs of the application for special leave, and of the appeal.....abide and follow the decision on the substantive issue by the full Federal Court and any appeal there from.

We then go on to say, “in the absence” ‑ ‑ ‑

GAUDRON J:   Sorry, I cannot exactly find that.

MR RAPHAEL:   I am terribly sorry, your Honour.  If you go to ‑ ‑ ‑

GAUDRON J:   It is on the appellant’s ‑ ‑ ‑

MR RAPHAEL:   ‑ ‑ ‑ the appellant’s written submissions.  It follows immediately after the last page of those.  They are unfortunately not numbered, your Honour, so I am not in a position to assist you beyond that.  With respect, the letter speaks for itself and it is probably much better if this Court reads the letter rather than have me recite it.

GAUDRON J:   Yes, although you put your position there with respect to the costs in this Court, nothing is said about the costs in the Full Federal Court.

MR RAPHAEL:   No.  It is our view that the matter should be remitted back to the Full Federal Court for their decision.

GAUDRON J:   But what about - on any view, Mr Raphael, one Friday afternoon in the Full Federal Court was wasted?

MR RAPHAEL:   With respect, your Honour, it was not wasted.  Mr Allsop ventilated his views at some considerable length and I, too ,at some considerable length, and with my usual attempt at mild humour and on at least one aspect of it did deal with it in great detail.  It was not wasted but, unfortunately, the Full Court did not give reasons.  It as simple as that.

GAUDRON J:   The question I am asking you is what is your present submission with respect to costs in the Full Federal Court of the earlier hearing?

MR RAPHAEL:   Will your Honour bear with me for one moment?  They should await the outcome of the remitter, if there be a remitter.  I am indebted to my learned friend so that I appear like some form of Charlie McCarthy.  I see your Honours are old enough to have heard of Edgar Bergin too; a terrible thing.

GAUDRON J:   Yes.  Is there anything else you wish say about costs or ‑ ‑ ‑

MR RAPHAEL:   Nothing, your Honour.  It is our submission that we should receive costs of the day.  There was an offer made – if your Honours are in favour of us and that the matter should be remitted, then the costs of this appeal to this Court ought to be granted to us.  I can take it no further.

GAUDRON J:   Anything in reply, Mr Allsop, on the question of the course that the Court should take?

MR ALLSOP:   Only this, your Honour, that it is, we say, a matter of some simplicity, but  ‑ ‑ ‑

GUMMOW J:   What about costs in the Federal Court so far, of that Friday, in effect?

MR ALLSOP:   The order has been set aside.  We would ask for our costs of that afternoon, but I cannot say that the lack of reasons and the need to go back is in any way a result of anything put by Mr Yates’ counsel, but we have had the order set aside and on that basis, we should have our costs.

GAUDRON J:   Yes.  Now I note, having had a closer look at the offer of settlement, the offer was somewhat conditional about costs in this Court too.

MR ALLSOP:   Yes, your Honour.

GAUDRON J:   So it was not an outright offer of settlement.

MR ALLSOP:   No, in fairness, your Honour, would your Honour go to the second page of the offer.  They then did say, “If you are not happy about that, we can go down to Canberra and argue costs”, so we were going to argue costs in any event.

GAUDRON J:   In any event, yes.  Yes, well, the Court will adjourn briefly to consider what course it should take.

AT 10.45 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.56 AM:

GAUDRON J:   In this matter the respondent acknowledges that the appeal must be allowed.  The only question is what consequential orders should be made.  The question which arises is whether the Full Court should have set aside the orders of Justice Branson made on 14 August 1997, making Mr Yates jointly and severally liable with Yates Property Corporation Pty Limited to meet the costs of the appellant.  It is conceded by the respondent that, the Court having given no reasons for making that order, it should be set aside.

In the matter of Boland and Webster v Yates, it has been ordered that Mr Yates’ appeal to the Full Court against the orders made at trial rendering him personally liable to those parties for the costs of the proceedings should be remitted for determination by the Full Court.  It is now said that because any issues affecting the appellant’s claim against Mr Yates were fully canvassed in submissions to the Full Court and decided by that Court, albeit without reasons, this Court should decide those issues.  However, the question whether Justice Branson erred in the exercise of her discretion in favour of the appellant is inextricably linked with the question which has been remitted to the Federal Court in the matter of Boland and Webster.  In these circumstances, it is appropriate that this matter also be remitted to that Court.  It will be a question for the Federal Court itself to determine the constitution of that Court when re-hearing the appeal from Justice Branson.

The orders which are made are as follows:

1.  Appeal to this Court allowed with costs;

2.  Set aside paragraphs 3 and 5 of the orders of the Full Court of the Federal Court of Australia made on 5 August 1998 as varied by that court’s order of 30 November 1998 in so far as those orders relate to this appellant.

3.  Remit the appeal from Justice Branson to the Full Court of the Federal Court for further hearing and determination.

4.  Costs of the earlier proceedings in the Federal Court to abide the outcome of the further hearing in that court.

AT 10.59 AM THE MATTER WAS CONCLUDED