Wardle v Agricultural and Rural Finance Pty Ltd (No 3)
[2013] NSWCA 207
•11 July 2013
Court of Appeal
New South Wales
Case Title: Wardle v Agricultural & Rural Finance Pty Ltd (No 3) Medium Neutral Citation: [2013] NSWCA 207 Hearing Date(s): 14 June 2013 Decision Date: 11 July 2013 Before: McColl JA [1];
Barrett JA [2];
Sackville AJA [3].Decision: 1. The orders made by the Court on 30 November 2012 be amended in the following respects:
(a) The name of the First Appellant in the title of the proceedings be corrected to "David James Wardle".
(b) Orders 7A and 7B be inserted after Order 7 as follows:
7A. Subject to the costs orders already made, the Respondents pay Mr Wardle one-ninth of the total costs of the Appellants of the appeal.
7B. Subject to the costs orders already made, the Respondents pay each of the Appellants other than Mr Holmes and Mr Wardle thirty-five per cent of one-ninth of the total costs of the Appellants of the appeal.
2. The Motion otherwise be dismissed.3. The Respondents pay 75 per cent of the costs of the Applicants on the Motion.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: COURTS - jurisdiction of Court following retirement of one member of appellate bench - whether reconstituted Court has power to hear and determine application under the slip rule
PROCEDURE - slip rule - whether errors and omissions in orders are within the ambit of slip ruleLegislation Cited: Bankruptcy Act 1966 (Cth), ss 58(3), 60(1)
Civil Procedure Act 2005, s 56
Supreme Court Act 1970, ss 23, 43(1), 44, 45AA(1), 75A(10), 101(1)
Uniform Civil Procedure Rules 2005 ("UCPR"), r 36.17Cases Cited: Agricultural and Rural Finance Pty Ltd v Atkinson [2010] NSWSC 311
Agricultural and Rural Finance Pty Ltd v Atkinson [2010] NSWSC 1396
Bakarich v Commonwealth Bank of Australia (No 2) [2012] NSWCA 390
Cotogno v Lamb (1985) 3 NSWLR 221
Newmont Yandal Operations Pty Limited v The J Aron Corporation & The Goldman Sachs Group, Inc [2007] NSWCA 195; 70 NSWLR 411
Orr v Holmes [1948] HCA 16; 76 CLR 632
Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446Category: Consequential orders Parties: David James Wardle
Gavin Winston Long
Peter Brakatselos
Geoffrey Nevell Fredericksen
Allan Patrick Holmes
Nicholas Charles Rowe
Maria Francesca Russo
Jennifer Dianne Wallace
Franco Giannuzzi
Maria Michael
Christina Spyrakis (Applicants)
Agricultural & Rural Finance Pty Limited (First Respondent)
Oceania Agricultural Pty Limited (Second Respondent)Representation - Counsel: Counsel:
S D Epstein SC with A Tsekouras (Applicants)
C J Bevan (First Respondent)- Solicitors: Solicitors:
Abadee Dresdner & Freeman (Applicants)
Evangelos Patakas & Associates (First Respondent)
Peter Condon & Associates (Second Respondent)File Number(s): CA 2011/236264 Decision Under Appeal - Court / Tribunal: Court of Appeal - Before: Campbell JA, Barrett JA, Sackville AJA - Citation: Wardle v Agricultural and Rural Finance Pty Ltd [2012] NSWCA 107Wardle v Agricultural & Rural Finance Pty Ltd (No 2) [2012] NSWCA 388 - Court File Number(s): CA 2011/236264
JUDGMENT
McCOLL JA: I agree with Sackville AJA's reasons and the orders his Honour proposes.
BARRETT JA: I agree with Sackville AJA.
SACKVILLE AJA: On 26 April 2012, this Court, constituted by Campbell JA, Barrett JA and Sackville AJA, delivered a judgment allowing an appeal and dismissing a cross-appeal from a decision of the primary Judge (Einstein J). The leading judgment in this Court was delivered by Campbell JA, with whom Barrett JA and Sackville AJA agreed: Wardle v Agricultural and Rural Finance Pty Ltd [2012] NSWCA 107 ("Principal Judgment"). This judgment uses the same abbreviations as the Principal Judgment.
On 30 November 2012 the Court delivered judgment on a number of issues that had been reserved in the Principal Judgment: Wardle v Agricultural & Rural Finance Pty Ltd (No 2) [2012] NSWCA 388 ("Supplementary Judgment"). Again the leading judgment was delivered by Campbell JA, with whom Barrett JA and Sackville AJA agreed. The Supplementary Judgment dealt with a number of issues, including the costs of the appeal and the costs orders that should be substituted for those made by Einstein J.
The matter presently before the Court is a notice of motion brought by the successful appellants and cross-respondents pursuant to the "slip rule" (Uniform Civil Procedure Rules 2005 ("UCPR"), r 36.17) ("Motion"). The Applicants (as I shall describe them) seek orders correcting what are said to be errors and omissions in the orders made by this Court in the Supplementary Judgment. The respondents to the Motion (ARF and OAL, together "the Respondents") resist the orders sought by the Applicants.
The Applicants do not rely on the inherent jurisdiction of the Court to correct the errors they have identified in the Supplementary Judgment. The Motion therefore does not present for consideration the extent to which the Court's inherent jurisdiction to correct errors or to ensure that orders reflect the Court's intention is wider than the power conferred by UCPR, r 36.17: see Newmont Yandal Operations Pty Limited v The J Aron Corporation & The Goldman Sachs Group, Inc [2007] NSWCA 195; 70 NSWLR 411, at [17]-[18], per Spigelman CJ (with whom Santow JA and Handley AJA agreed).
The complication in what would otherwise be a straightforward matter is that Campbell JA retired on 19 December 2012, shortly after the Motion was filed. The Respondents have refused to consent to the Motion being heard and determined by the two remaining members of the Court (Barrett JA and Sackville AJA). That course is permissible under s 45AA(1) of the Supreme Court Act 1970 ("SC Act"), but only with the consent of the parties to the appeal.
A three member bench has been reconstituted in order to hear and determine the Applicants' Motion. However, the Respondents contend that the reconstituted Court lacks jurisdiction to deal with the Motion. They say that the only basis upon which errors in the Supplementary Judgment's orders can be corrected is if the issues dealt with in that Judgment are re-opened and argued afresh.
Legislation
Supreme Court Act 1970
Section 23 of the Supreme Court Act 1970 ("SC Act") states that the Supreme Court of New South Wales shall have all jurisdiction which may be necessary for the administration of justice in New South Wales. Section 101(1)(a) of the SC Act provides that, subject to any Act and to the rules, an appeal lies to the Court of Appeal from any judgment or order of the Court in a Division. The Court in an appeal has power under s 75A(10) of the SC Act to:
make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made or which the nature of the case requires.
Section 43(1) of the SC Act provides that any three or more Judges of Appeal constitute the Court of Appeal. Section 44 provides that:
The Court of Appeal may, in proceedings before it, exercise every power, jurisdiction or authority of the Court, whether at law or in equity or under any Act, Imperial Act or Commonwealth Act.
Section 45AA(1) of the SC Act provides as follows:
If an appeal is commenced before 3 or more Judges of Appeal and, before the appeal is determined, one or more of the Judges dies, resigns from office or otherwise becomes unable to continue as a member of the Court of Appeal for the purposes of the appeal, the hearing and determination of the appeal may be completed by the remaining Judges of Appeal so long as at least 2 Judges remain and the parties consent.
Civil Procedure Act
Section 56 of the Civil Procedure Act 2005 ("CP Act") relevantly provides as follows:
(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.
The Slip Rule
The "slip rule" (UCPR, r 36.17) provides as follows:
If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error.
Costs Orders at First Instance
The complex history of these proceedings is set out at length in the Principal Judgment. It is not necessary to repeat that account here. However, since the Motion concerns, among other things, the costs orders made by Einstein J, it is convenient to record the orders made by his Honour.
On 29 April 2010, Einstein J ordered (Order 3) that:
The [twelve] defendants who are listed in Schedule B ... pay the costs of the plaintiff [ARF] and the second cross defendant [OAL] of and incidental to [ARF's] notice of motion ... filed 31 March 2010.
The notice of motion filed on 31 March 2010 sought orders striking out certain parts of the defences and cross-claims. ARF and OAL succeeded on the motion. The twelve named defendants comprised the eleven Applicants and Mr Atkinson, a party to the proceedings to whom further reference will be made.
In a judgment delivered on 9 June 2011 (Agricultural and Rural Finance Pty Ltd v Atkinson [2011] NSWSC 555), Einstein J made the following orders:
(3) ... the ADF defendants [being the eleven Applicants but not Mr Atkinson] pay [ARF's] costs of and incidental to the proceedings on the summons and the cross-claims on a joint and several basis and on the usual basis subject to the plaintiff not recovering against the ADF defendants any costs which it has already recovered by way of settlements with other defendants inclusive of costs.
(4) The ADF defendants pay the costs of [OAL] of the cross-claims on a joint and several basis and on the usual basis.
Orders on Appeal
Two of the Applicants (Mr Wardle and Mr Long) appealed against the decision of Einstein J as of right. Seven of the Applicants (Messrs Brakatselos, Fredericksen, Holmes, Rowe and Giannuzzi, Ms Russo and Mrs Wallace) sought (and were granted) leave to appeal. ARF sought (and was granted) leave to cross-appeal against the nine Applicants I have mentioned, and the two remaining Applicants (Ms Michael and Ms Spyrakis). The two last-mentioned Applicants did not seek leave to appeal from the orders made against them. I refer to Mr Wardle and Mr Long, together with the seven applicants for leave to appeal, as "the Appellants" (being nine of the eleven Applicants on the Motion).
In the Principal Judgment this Court made the following orders:
(1) Appeal allowed.
(2) Set aside the judgments in the court below against each Appellant.
(3) Enter judgment for Mr Holmes, with costs of the hearing at first instance.
(4) Grant leave to Mr Wardle and Mr Gianuzzi to replead paras [28]-[31] of the Further Amended Defence ...
(5) Cross-appeal dismissed with costs.
(6) Remit to the Equity Division for further hearing ARF's claim against each of the Appellants other than Mr Holmes.
(7) Reserve further consideration of what other orders should be made to give effect to these reasons for judgment.
(8) Direct the parties within 14 days after delivery of these reasons for judgment to file short minutes of the orders that they agree are required to give effect to these reasons for judgment, and as to the costs of the appeal and the first instance hearing.
(9) To the extent that the parties do not agree upon such orders, direct the Appellants within 21 days from the date of delivery of these reasons for judgment to file short minutes of the further orders they submit are required to give effect to these reasons for judgment, together with their submissions not exceeding four pages in length on the reasons why those orders are appropriate.
(10) In the event that the parties do not agree upon orders pursuant to order 8, direct the Respondents within 35 days of the date of delivery of these reasons for judgment to file short minutes of the further orders they submit are required to give effect to these reasons for judgment, together with their submissions not exceeding four pages in length on the reasons why those orders are appropriate.
The parties were unable to agree on short minutes of order. They filed written submissions in compliance with the directions given in the Principal Judgment. It should be noted that neither ARF nor OAL sought a variation of the orders requiring the written submissions to be limited to four pages. Nor did they seek an oral hearing on the outstanding issues.
The orders made in the Supplementary Judgment included the following:
(3) The orders made by Einstein J on 29 April 2010 be set aside insofar as -
(i) ...
(ii) they made the costs order in clause 3 of those orders.
(4) In lieu of the order referred to in Order 3(ii) above, order
(a) Mr Atkinson, Ms Michael and Ms Spyrakis jointly and severally to pay three-twelfths of 50% of the costs of the Respondents of the notice of motion to which the orders of 29 April 2010 relate ("the strike out motion")
(b) The Respondents pay to Mr Holmes one-twelfth of 50% of the costs of the defendants listed in Schedule B ... ("the Continuing Defendants") of the strike out motion.
...
(6) Set aside the orders for costs made by paras 3 and 4 of the orders of Einstein J made on 9 June 2011, and in lieu thereof order:
(3) Subject to order 6 of the orders made on 9 June 2011, Mr Atkinson, Ms Michael and Ms Spyrakis to pay
(i) Severally, such of the costs of [ARF] as are attributable, respectively, to him or her severally
(ii) Jointly and severally, three-twelfths of the costs of [ARF] as are properly attributable to the Continuing Defendants jointly, minus any costs that it has already recovered by way of settlement with other defendants inclusive of costs.
(4) Mr Atkinson, Ms Michael and Ms Spyrakis to pay:
(i) Severally, such of the cost of [OAL] of the cross claims as are attributable, respectively, to him or her severally.
(ii) Jointly and severally, three-twelfths of the costs of [OAL] as are properly attributable to the Continuing Defendants jointly.
(The "Continuing Defendants" were the same twelve defendants referred to in Order 3 made by Einstein J on 29 April 2010 (see at [15] above). That is, the Continuing Defendants were the eleven Applicants on the Motion and Mr Atkinson.)
Campbell JA dealt with the costs of the appeal in the Supplementary Judgment as follows (at [91], [94]-[95]):
91 ... I accept that Mr Wardle should receive his costs of the appeal. However, like Mr Holmes, the order should recognise that he was commonly represented. Mr Wardle should be entitled severally to receive one-ninth of the total costs of the Appellants of the appeal.
...94 In my view, it is highly desirable to make an order that deals with the costs of the appeal on as simple a basis as possible. Balancing the issues on which the Appellants other than Mr Holmes and Mr Wardle succeeded and to [sic] those on which they failed, in my view they should receive thirty-five percent of their costs of the appeal.
95 However, that order should recognise that those Appellants were commonly represented with Mr Holmes and Mr Wardle concerning all issues except that of whether Mr Holmes paid promptly. The different measures of success of Mr Holmes, Mr Wardle and the other Appellants makes it appropriate for the costs orders to reflect those different measures of success. Each Appellant other than Mr Holmes and Mr Wardle should be severally entitled to be paid thirty five per cent of one-ninth of the costs of the Appellants of the appeal.
The orders made in the Supplementary Judgment do not give effect to the orders foreshadowed by these paragraphs in Campbell JA's judgment. It is common ground that this was an oversight on the part of the Court.
The Motion
On 10 December 2012, ten days after the Supplementary Judgment was delivered, the Motion was filed seeking variations to the orders made in the Supplementary Judgment. The Applicants on the Motion were:
·the nine Appellants; and
·Ms Michael and Ms Spyrakis, the cross-respondents (together with the Appellants) to ARF's cross-appeal to this Court.
The Applicants sought the following orders pursuant to the slip rule:
1. In relation to the Judgment/Order made by the Court on 30 November 2012 -
(a) That the name of the First Appellant in the title of the proceedings be corrected to "David James Wardle"
(b) That sub-paragraph 4(a) be amended to read as follows:
"(a) Mr Atkinson, Ms Michael and Ms Spyrakis jointly and severally with the bankrupt estate of Mr Atkinson, pay three-twelfths of 50% of the costs of the Respondents of the Notice of Motion to which the orders of 29 April 2010 relate ('the strike out motion')."
(c) That paragraph 6 be amended to read as follows:
"6. The orders for costs made by paras 3 and 4 of the orders of Einstein J made on 9 June 2011 be set aside and in lieu thereof order that:
(3) Subject to Order 6 of the Orders made on 9 June 2011, Mr Atkinson, Ms Michael and Ms Spyrakis pay:
(i) severally, such of the costs of Agricultural and Rural Finance Pty Limited as are attributable respectively, to him or her severally; and
(ii) jointly and severally, three twelfths two-elevenths of the costs of Agricultural and Rural Finance Pty Limited as are properly attributable to the Continuing Defendants Mr Wardle, Mr Long, Mr Brakatselos, Mr Fredericksen, Mr Holmes, Mr Rowe, Ms Russo, Mrs Wallace, Mr Gianuzzi, Ms Michael and Ms Spyrakis jointly, minus any costs that it has already recovered by way of settlement with other defendants inclusive of costs.
(4) Mr Atkinson, Ms Michael and Ms Spyrakis pay:
(i) such of the costs of Oceania Agriculture Pty Limited of the cross-claims as are attributable respectively, to him or her severally; and
(ii) jointly and severally, three twelfths two-elevenths of the costs of Oceania Agriculture Pty Limited as are properly attributable to the Continuing Defendants Mr Wardle, Mr Long, Mr Brakatselos, Mr Fredericksen, Mr Holmes, Mr Rowe, Ms Russo, Mrs Wallace, Mr Gianuzzi, Ms Michael and Ms Spyrakis jointly."
(d) That orders 7A and 7B be inserted after Order 7 as follows:
"7A. Subject to the costs orders already made, the Respondents pay Mr Wardle one-ninth of the total costs of the Appellants of the appeal.
7B. Subject to the costs orders already made, the Respondents pay each of the Appellants other than Mr Holmes and Mr Wardle thirty-five per cent of one-ninth of the total costs of the Appellants of the appeal."
The Applicants' submissions in support of the Motion were contained in the affidavit sworn by the Applicants' solicitor. The affidavit made a number of points:
(i) The sealed copy of the orders made on 30 November 2012 mistakenly recorded Mr Wardle's name as "Mr Wardel". This was a clerical error requiring correction.
(ii) Orders 4 and 6 made by this Court on 30 November 2012 apparently proceeded on the basis that twelve defendants (the Applicants and Mr Atkinson) had actively participated in the proceedings until Einstein J pronounced formal orders on 9 June 2011. In fact, Mr Atkinson had ceased to be an active defendant before this time because a sequestration order had been made against his estate on 27 May 2010. It was for this reason that Einstein J had made orders on 9 June 2011 only against the eleven Applicants. Thus the orders made by this Court on 30 November 2012 were made on a false assumption and should be corrected under the slip rule in the manner proposed by the Applicants.
(iii) Orders 7A and 7B sought in the Motion had been inadvertently omitted from the orders made in the Supplementary Judgment. It was clear that the orders sought by the Applicants were required in order to give effect to the reasons in the Supplementary Judgment, at [91]-[95]. This was an obvious case for the application of the slip rule.
Events Following Filing of the Motion
On Thursday, 13 December 2012, the Registrar advised the parties that the Court proposed to deal with the Motion on the papers because of the imminent retirement of Campbell JA (which was to occur on 19 December 2012). The Registrar directed that if the Respondents to the Motion (ARF and OAL) did not consent to the orders sought by the Applicants, they were to file their submissions by the following Monday, 17 December 2012.
On Friday, 14 December 2012, ARF's solicitor informed the Registrar that ARF would be unable to provide their submissions by the following Monday. The stated reason was that senior counsel was unavailable and that junior counsel, who had prepared the submissions addressed in the Supplementary Judgment, was unwell.
The letter also stated that the solicitor had read the Supplementary Judgment and that he could inform the Court that his client opposed the orders sought by the Applicants. The solicitor gave no reasons. In particular, the solicitor gave no reasons for opposing the making of Orders 7A and 7B which were clearly intended to correct an obvious omission in the orders made on 30 November 2012.
An inquiry was then made as to whether the parties consented to Barrett JA and Sackville AJA, the two remaining Judges on the Court that handed down the Supplementary Judgment, determining the Motion pursuant to s 45AA(1) of the SC Act.
On 25 January 2013, ARF's solicitor informed the Court that his client did not consent to the matter being heard and determined by the two remaining members of the original bench. The reasons given for refusing consent included the following:
1. Campbell JA delivered the principal judgment on the appeal and his reasons are the only reasons supporting the costs orders sought to be varied by the appellants; Barrett JA and Sackville AJA did no more than agree with his Honour's reasoning;
...
4. The orders sought in the appellants' motion are no mere exercise in correcting a "clerical error" in the orders made to give effect to the reasons of Campbell JA (which Barrett JA and Sackville AJA agreed with) under the "Slip Rule", as is suggested in the appellants' solicitors [sic] letter dated 10 December 2012; ... rather they involve a wholesale re-write of the Court's costs orders based on facts not before the Court before judgment;
5. The appellants' motion filed on 10 December 2012 is, properly understood, an application to set aside the costs orders made on 30 November 2012, and to re-open the case of the appellants for their costs on the appeal and at first instance based on the new evidence in [the solicitor's] affidavit ... and seek new orders, which is an "exceptional step", as it is a qualification to the principle of finality of litigation ...
6. In those circumstances, it is a denial of procedural fairness to expect ARF to respond to such an important application without the benefit of the reasoning of the Judge of Appeal whose reasoning was pivotal to the making of the orders sought to be set aside and made afresh with supplementary orders (and not merely varied) under the appellants' notice of motion filed on 10 December 2012;
The letter went on to assert that the Court was functus officio and that the Applicants' motion should therefore be summarily dismissed. The letter did not explain why proposed Orders 7A and 7B amounted to a "wholesale rewrite of the Court's costs orders".
Submissions
ARF developed its argument in written submissions filed on 18 February 2013. It contended that even a reconstituted Court of three Judges could not exercise the power conferred by the slip rule to vary the orders made in the Supplementary Judgment. According to Mr Bevan, who appeared for ARF on the Motion before a reconstituted bench of three Judges, the only way the Court could grant the relief sought by the Applicants was to set aside both judgments (the Principal Judgment and the Supplementary Judgment) and to reconsider all issues afresh. Alternatively, so Mr Bevan submitted, all questions addressed in the Supplementary Judgment should be determined afresh after full oral argument. In any event, most of the relief sought by the Applicants could not be granted under the slip rule since the corrections, if drawn to the attention of the Court at the relevant time, would not have been made as a matter of course.
Most of ARF's written submissions were devoted to identifying what were said to be errors in the reasoning of the Court in the Supplementary Judgment. The submissions asserted that the Respondents had been denied procedural fairness because they had been limited to four pages of written submissions and had been "denied an opportunity to argue the questions orally".
In response to these arguments, Mr Epstein SC, who appeared with Ms Tsekouras for the Applicants, submitted that the Court's jurisdiction under UCPR r 36.17 did not disappear with the retirement of Campbell JA. He relied on ss 43 and 44 of the SC Act as providing ample authority for a reconstituted Court to deal with the Notice of Motion.
On the hearing of the Motion Mr Bevan abandoned his contention that the relief sought by the Applicants could be granted only if both the Principal Judgment and the Supplementary Judgment were reopened and the entire case reargued. However, he maintained that the Applicants could not obtain the orders they sought, even to correct an obvious error, without the issues dealt with in the Supplementary Judgment being reargued before a reconstituted bench.
Reasoning
Jurisdiction
In Bakarich v Commonwealth Bank of Australia (No 2) [2012] NSWCA 390, the appellants had been unsuccessful in a claim they brought in the Equity Division. They appealed to the Court of Appeal. The appeal judgment, delivered in 2007, resolved most issues, but the only orders the Court made were to remit six questions to the Equity Division for inquiry and report.
After the Equity Division answered the remitted questions, the matter was re-listed before the Court of Appeal to determine what orders should be made. Unfortunately, by this time two of the Judges who had participated in the earlier appeal had died, having previously retired from the Court. Thus no reliance could be placed on s 45AA(1) of the SC Act, which only applies if at least two of the judges on the original Court remain (see at [33]).
The Court addressed as a preliminary question whether a reconstituted bench of three could and should finalise the appeal. It was held that the reconstituted Court had power to determine the appeal and to make the appropriate orders to dispose of the matters.
The Court examined in some detail the authorities relating to the power of a court at first instance to reconstitute itself in order to conclude a matter where the original judge dies or retires before the proceedings are concluded. The Court observed (at [49]) that:
These cases concerning reconstitution of a first instance tribunal show that there are circumstances in which it could sometimes be irregular, to an extent justifying setting aside on appeal, for a first instance decision to be reached by one judge completing a proceeding that had been begun by another judge. ... [T]hose cases also show that, except when there is a statutory prohibition on adopting such a course, it is not inherently impossible for one judge of a superior court to complete a legal proceeding that has been begun by another judge of that court.
Their Honours noted that there was no statutory prohibition on a reconstituted bench completing the appeal that had been "largely decided" by the original Court of Appeal judgment.
Their Honours said (at [50]) that somewhat different considerations applied to the reconstitution of an appellate court to those concerning the replacement of one first instance judge by another. Except in the rare case where fresh evidence or further evidence is received by the appellate court, the reconstituted court will not lack the advantage of seeing witnesses give their evidence.
The Court referred to a number of authorities concerning the reconstitution of appellate courts. Among these were Cotogno v Lamb (1985) 3 NSWLR 221, and Orr v Holmes [1948] HCA 16; 76 CLR 632.
In Cotogno v Lamb, a preliminary issue arose on the hearing of an appeal as to whether the appellant should be permitted to enlarge his grounds of appeal. The Court delivered a judgment permitting him to do so, although there was disagreement as to the precise grounds that should be allowed. After judgment had been delivered, one member of the bench went on long leave. The question was whether the Court had power to reconstitute itself to hear and determine the substantive appeal. The Court answered the question in the affirmative, for these reasons (at 223):
There is a long line of authority which stresses the importance of courts, once constituted to hear a matter, proceeding to hear all aspects of the matter to conclusion ... However, these cases deal with hearings at first instance where the court deciding the matter must have the advantage of hearing and seeing all of the witnesses. Such a consideration does not govern the hearing of appeals. The power to reconstitute an appellate court cannot be in doubt in the case where that is necessary after a judge dies, retires or is incapacitated in the midst of a hearing and before judgment is delivered. Otherwise, by reason of the statutory obligation to constitute the court with three or more judges (see Supreme Court Act 1970, s 43(1), the facility of appeal could be entirely frustrated. Similar considerations apply in circumstances where a judge takes extended leave.
In Orr v Holmes, the Full Court of the Supreme Court of Queensland made orders disposing of an appeal, but adjourned the question of costs. Thereafter, one of the Judges comprising the bench died and orders relating to costs were made by a differently constituted bench. On appeal to the High Court, only Dixon J considered the validity of the costs orders made by the reconstituted bench. His Honour rejected an objection that it was not competent for the reconstituted bench to resolve the question of costs (at 637-638):
An order had been pronounced upon the appeal or application for a new trial. The order which was drawn up included a specific provision adjourning or reserving the question of costs and so treating it as a distinct matter. The case is not one of the death of a judge before the hearing and determination of a proceeding are concluded by a court of which he is a necessary member. The order had disposed of the proceeding before the court and, as a matter of jurisdiction, the Supreme Court constituted as a Full Court in any manner might hear and determine the question of costs adjourned or reserved. No doubt as a matter of convenience the court would not be differently constituted to deal with costs that are adjourned or reserved, if it could be avoided. But that consideration does not affect jurisdiction.
The Court in Bakarich pointed out (at [61]) that all substantive questions in the appeal had been decided by the 2007 judgment. It followed that an order dismissing the appeal did not involve the Court "doing anything other than authorising a formal step". The Court continued as followed:
The remitting of the six questions, the answers to which were needed to decide whether relief should be granted ... treated those questions, in the manner described by Dixon J in Orr v Holmes, as a distinct matter. There is no challenge to the correctness of the findings of Bryson AJ [to whom the questions had been remitted], and in the light of those findings it is quite clear what orders should be made to dispose of the appeal ... There was no evidence heard in the course of the hearing leading to the 2007 Appeal Judgment that is relevant to any determination we must now make. The occasion for the Court needing to consider whether it is possible to reconstitute is the total impossibility of the Court as originally constituted completing the hearing ...
Their Honours then cited the observations in Cotogno v Lamb (see at [42] above) to support the conclusion that the Court as reconstituted had power to determine the appeal.
The ratio decidendi of Bakarich v CBA, taken at its narrowest, is that where a member of an appellate bench dies or retires, a reconstituted court has power to deal with any "distinct matter" that remains in the appeal. In my opinion, this principle applies to the circumstances of the present case.
The orders made in the Supplementary Judgment were intended to resolve all outstanding issues in the appeal and cross-appeal. The only question that has arisen since the orders were made is whether the Court made an accidental error or omission in formulating and pronouncing those orders. That question has arisen because one of the parties has filed the Motion invoking the slip rule. While the precise scope of the slip rule may be a matter for argument in a particular case, the rule only applies in limited circumstances, namely where there has been a clerical mistake or an error arising from an accidental slip or omission in a judgment or order.
The filing of the Motion after delivery of the Supplementary Judgment presents a new issue for the Court to determine. Had the parties been prepared to act swiftly enough, that issue could have been resolved by the original bench before the date of Campbell JA's retirement. As events transpired, the parties did not act sufficiently quickly and the motion could not be determined prior to that date. The task facing the reconstituted Court is to decide whether the slip rule applies so as to warrant amending the orders made in the Supplementary Judgment. That task requires the Court to examine the Supplementary Judgment in the light of the slip rule. It does not require reference to any evidence given on the appeal (in fact there was none).
Determining the Motion may require reference not only to the Supplementary Judgment itself but to other aspects of the proceedings. That, however, was true of the costs application in Orr v Holmes and may well have been true of the application for final orders in Bakarich. The need to refer to other aspects of the appeal does not deprive the present motion of its character as a distinct matter for the purpose of deciding whether a reconstituted court has the power to decide it.
Section 56(2) of the CP Act requires the Court to seek to give effect to the overriding purpose (that is, to facilitate the just, quick and cheap resolution of the real issues in the proceedings) when it exercises any power given to it by the CP Act or the Rules. The power invoked on the present application is UCPR, r 36.17. It would not give effect to the overriding purpose if that power could not be exercised by a reconstituted bench in circumstances where it is no longer possible to reconvene the original Court. If that was the situation, the inevitable consequence would be delay, increased expense for the parties and a risk of significant injustice to one or more parties.
In my view, therefore, on the authority of Bakarich v CBA, the reconstituted bench has power to deal with the Applicants' Motion invoking the slip rule.
Having reached this conclusion, it is not necessary to consider the limits of the Court's power to reconstitute itself on an appeal in circumstances where one or more members of the bench can no longer sit. However, the power may well extend considerably beyond the case where a "distinct matter" arises for determination in the appeal. Having regard to the wide language of ss 44 and 75A(10) of the SC Act, it may be that the true limits of the power are to be determined by principles of procedural fairness rather than any more rigid requirement that does not have its source in legislation or rules of court.
I noted earlier (at [30]) that in the letter of 25 January 2013, ARF's solicitor asserted that it would be a denial of procedural fairness to expect ARF to respond to the application without the benefit of the reasoning of the Judge whose reasoning was "pivotal" to the making of the orders. If this assertion was intended to suggest that the only way in which ARF could be accorded procedural fairness on an application under the slip rule would be to consider afresh the issues addressed in the Supplementary Judgment, I reject the contention. Quite apart from the erroneous assumption that the concurring Judges played no significant role in the making of the orders, there has been no difficulty in according the Respondents a full measure of procedural fairness on the hearing and determination of the Motion.
I should add that in my view there was no procedural unfairness in the directions given for written submissions on the issues remaining after delivery of the Principal Judgment. Nor was there procedural unfairness in those issues being dealt with on the papers. If the Respondents considered that lengthier written submissions or an oral hearing were required, they could have applied to vary the directions. In any event, the Respondents have not filed any motion seeking to reopen the matters dealt with in the Supplementary Judgment on the ground that they were denied procedural fairness.
For these reasons, the reconstituted court has power to deal with the motion under the slip rule. In the circumstances I have outlined, it is clearly appropriate that the power be exercised.
The Slip Rule
First Appellant's Name
The name of the first appellant was incorrectly recorded in the Orders made by the Court in the Supplementary Judgment. That was a clerical mistake that should be corrected pursuant to UCPR, r 36.17.
Costs of the Appeal
Orders 7A and 7B (reproduced at [24]) proposed by the Applicants are clearly necessary to give effect to the reasoning at [91]-[95] of the Supplementary Judgment. In Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446, McHugh JA explained (at 452) the operation of the then District Court equivalent to UCPR, r 36.17:
If the proposed variation of an order relates to a matter which was in issue in the proceedings or to something which was incidental to such a matter, the court, in my opinion, has power to amend its order if the need for the variation is the result of an accidental omission or mistake. Matters such as costs or interest on a judgment, for example, are almost always incidentally involved in proceedings, and the court has power to deal with them even though they are not specifically raised at the hearing provided, of course, the omission was accidental. No doubt in some cases there will be difficulty in determining whether or not the subject of the proposed variation relates to a matter which was in issue or whether it is to be regarded as a separate and distinct matter which was not in issue.
See also at 447, per Priestly JA; at 456 per Clarke AJA. The judgment of McHugh JA in Storey & Keers was distinguished by Spigelman CJ in Newmont Yandal, at [145], but not so as to cast any doubt on McHugh JA's statement of principle.
The question of the costs of the appeal was squarely before the Court which delivered the Supplementary Judgment. The issue was expressly addressed in the Judgment. The failure to incorporate orders giving effect to the Court's reasons (at [91]-[95]) was plainly an accidental mistake or omission. It should now be corrected.
Costs of the Trial
The remaining orders sought by the Applicants fall into a separate category. The Applicants contend that the orders concerning the costs of the trial were made as a result of an accidental slip or omission. The mistake is said to be the erroneous assumption that Mr Atkinson had continued to be an active defendant in the proceedings until Einstein J made final orders on 9 June 2011. The Applicants correctly point out that Mr Atkinson became bankrupt on 27 May 2010.
The Supplementary Judgment referred (at [19]) to Mr Atkinson as an "ongoing defendant" at the time Einstein J delivered the judgments relating to costs on 2 December 2010 and 9 June 2011. The Supplementary Judgment also recorded (at [45]) Mr Epstein's submission on behalf of the present Applicants as follows:
Ms Michael and Ms Spyrakis should pay jointly and severally two-elevenths of the costs that are properly attributable to the eleven defendants jointly. This submission is made on the basis that there were eleven defendants who were continuing at the time the costs orders were made, rather than the twelve who were actually continuing.
This Court held in the Supplementary Judgment (at [75]) that the order made by Einstein J requiring all continuing defendants to be jointly and severally liable for the costs of the first trial should not stand. Instead, a "per defendant" costs order of the kind sought by Mr Epstein was appropriate. The Supplementary Judgment then indicated that orders should be made in the form that has been set out earlier in this judgment (see at [20] above). Those orders require Mr Atkinson, Ms Michael and Ms Spyrakis to pay three-twelfths of the relevant proportion of the costs of ARF and OAL of the proceedings.
The difficulty with the Applicants' reliance on the slip rule to modify the orders relating to the costs of the proceedings before Einstein J lies in the test that must be satisfied before r 36.17 can be invoked. The test is whether, if the matter had been drawn to the Court's attention, it would have made the correction at once: Storey & Keers, at 453; Newmont Yandal, at [137].
Despite Mr Atkinson's bankruptcy on 27 May 2010, it appears from Einstein J's judgment of 2 December 2010 (Agricultural and Rural Finance Pty Ltd v Atkinson [2010] NSWSC 1396, at [5]-[9]), that Mr Atkinson continued to be represented in the proceedings after the sequestration order had been made. This was so notwithstanding that it was only his trustee in bankruptcy who could properly give instructions to a legal representative.
The solicitor acting for Mr Atkinson in the proceedings (who was apparently unaware of his bankruptcy) did not withdraw until shortly before Einstein J delivered judgment on 2 December 2010. That judgment and the subsequent judgment of 9 June 2011 dealt with costs. The principal judgment in the proceedings was delivered by Einstein J on 21 April 2010, a month before Mr Atkinson became bankrupt: Agricultural and Rural Finance Pty Ltd v Atkinson [2010] NSWSC 311.
As Mr Epstein accepted, Mr Atkinson continued as a party to the proceedings after his bankruptcy. Section 58(3) of the Bankruptcy Act 1966 (Cth) ("Bankruptcy Act") imposed restrictions on the steps available to a creditor, but that provision did not operate as an automatic stay of the proceedings against Mr Atkinson (cf Bankruptcy Act, s 60(1)(b)).
It is not apparent from the Supplementary Judgment itself whether or not the Court had been made aware that Mr Atkinson had been made bankrupt on 27 May 2010, although the submission recorded at [45] of the Judgment implies that the Court was informed of his bankruptcy. However, assuming that the bankruptcy was overlooked in the Supplementary Judgment (which is by no means clear), that does not mean that the Court, if apprised of the bankruptcy, would have corrected the orders at once. The fact is that Mr Atkinson actively participated in the proceedings before Einstein J until or shortly before the judgment of 2 December 2010. Indeed, he appears to have been represented on 22 and 23 September 2010, the first two days of the hearing before Einstein J on costs. It was only on the third day of the hearing (29 November 2010) that his position was regularised.
Had Mr Atkinson's position been drawn to the attention of the Court at the time the Supplementary Judgment was delivered, it would not have made the corrections sought by the Applicants "at once". Argument would have been invited as to whether Orders 4 and 6 made on 30 November 2012 should be amended having regard to the active role played by Mr Atkinson in the proceedings until shortly before Einstein J delivered the costs judgment of 2 December 2010. It is not clear what the outcome of that argument might have been.
It follows that the Applicants' Motion, insofar as it seeks amendments to Orders 4 and 6 made in the Supplementary Judgment, should be dismissed.
Orders
The following orders should be made on the Applicants' Motion:
1. The orders made by the Court on 30 November 2012 be amended in the following respects:
(a) The name of the First Appellant in the title of the proceedings be corrected to "David James Wardle".
(b) Orders 7A and 7B be inserted after Order 7 as follows:
7A. Subject to the costs orders already made, the Respondents pay Mr Wardle one-ninth of the total costs of the Appellants of the appeal.
7B. Subject to the costs orders already made, the Respondents pay each of the Appellants other than Mr Holmes and Mr Wardle thirty-five per cent of one-ninth of the total costs of the Appellants of the appeal.
2. The Motion otherwise be dismissed.
Most time on the Motion was taken up with argument on the jurisdictional issue on which the Respondents did not succeed. In these circumstances, the Respondents should pay 75 per cent of the costs of the Applicants on the Motion.
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