Variation of orders January 28, 2017
- PRODEDURE – application for variation of orders made on appeal – where appeal court awarded damages contingently assessed by trial judge – back-dating of judgment – pre-judgment interest – indemnity costs – Uniform Civil Procedure Rules 2005 (NSW) r 36.16(3A) and (3C) – where notice of motion out of time – delay caused by oversight in solicitor’s office – whether power to dispense with the requirements of the rules – Civil Procedure Act 2005 (NSW) s 14 – limited exceptions to finality of judgments – slip rule – UCPR r 36.17 – back-dating of judgment – UCPR r 36.4(3) – interests of justice
The power of the Court to vary an order once entered
- It is not in dispute that this Court’s order was entered on 18 October 2016 upon the reasons for decision being delivered and the orders being entered into the Court’s computerised record system: UCPR r 36.11(2A).
- The power of the Court to set aside or vary a judgment or order is found in UCPR r 36.16 which relevantly provides:
Further power to set aside or vary judgment or order
(1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.
(2) The court may set aside or vary a judgment or order after it has been entered if:
(a) it is a default judgment (other than a default judgment given in open court), or
(b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, or
(3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it:
(a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or
(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.
(3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B).
(4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order.
- Variation of a judgment or order can also occur under the “slip rule”, now found in UCPR r 36.17 which provides:
Correction of judgment or order (“slip rule”)
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.
- Section 14 of the Civil Procedure Act provides that “[i]n relation to particular civil proceedings, the court may, by order, dispense with any requirements of the rules of court if satisfied that it is appropriate to do so in the circumstances of the case”…..
Exceptions to the finality of judgments and orders
- The general rule stated in Bailey v Marinoff (1971) 125 CLR 529;  HCA 49 at 530 by Barwick CJ on an appeal from this Court is that:
Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed.
- It is well accepted that, subject to limited exceptions, such as in relation to fraud, the principle of finality continues to operate: Deputy Commissioner of Taxation v Meredith (No 2) (2008) 75 NSWLR 462;  NSWCA 133 (Deputy Commissioner of Taxation v Meredith) at  (Basten JA, Ipp JA agreeing).
- The 14-day window afforded by UCPR r 36.16(3A) creates an exception to the principle that ordinarily a court has no power to set aside a final judgment after it has been entered: see Malouf v Prince (No 2)  NSWCA 51 (Malouf v Prince) at  (McColl and Macfarlan JJA and Nicholas J) and the cases there cited. Importantly, subrule (3C) prohibits the Court from extending (under UCPR r 1.12) the time limited by subrule (3A): Bennette v Cohen (No 2)  NSWCA 162 (Bennette v Cohen) at -; Malouf v Prince at -.
- In Deputy Commissioner of Taxation v Meredith, Basten JA explained the purpose of these rules (at ):
The clear purpose of the rules set out above is to allow a window of 14 days after entry of judgment, in courts where entry takes place automatically and largely contemporaneously with the delivery of judgment. The removal of the power to extend the 14-day period makes it sufficiently clear that the intention is that the period is not variable, but reflects the need for judgments and orders to be final and certain as to their operation.
- The position is different where an oral application has been made within the 14-day period specified by subrule (3A). In Hancock v Arnold; Dodd v Arnold (No. 2)  NSWCA 19 (Hancock v Arnold) the Court (Ipp, McColl and Basten JJA) exercised the power conferred by s 14 of the Civil Procedure Actto dispense with the need for filing a notice of motion in circumstances where a timely oral application has been made. That is not the present case.
- The Court refrained, in Hancock v Arnold (at ), from expressing any view as to whether the power conferred by s 14 of the Civil Procedure Act could otherwise permit dispensation with the requirement as to time in subrule (3A), despite the terms of subrule (3C).
- In Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75;  HCA 43, the plurality (French CJ, Gummow, Hayne and Crennan JJ) observed (at ) that s 14 of the Civil Procedure Act is arguably limited in its application “to rules imposing some duty on parties and [did] not extend it to a rule imposing limitations on the power of the court to order costs”. It was accepted by this Court in Malouf v Prince (at ) that UCPR r 36.16(3A) plainly falls into the former category insofar as it requires the applicant for an order to file a notice of motion within the 14-day period.
- It is unnecessary to express any concluded view as to whether the s 14 power can be relied upon by Mr Zoef. Even if the Court were to dispense with that requirement, it would be necessary to consider the application for variation of this Court’s judgment in accordance with the general rule in Bailey v Marinoff referred to above: Malouf v Prince at . Mr Zoef did not attempt to bring his application within any exception to the general rule in Bailey v Marinoff. Furthermore, for the following additional reasons, it is not appropriate to dispense with the requirement as to time in UCPR r 36.16(3A).
- First, the circumstances warranting the exercise of the s 14 power where the rules expressly prohibit extending the time limited by subrule (3A), may be considered to be relatively circumscribed. That follows from the terms of subrule (3C) and the clear purpose of those rules: see Deputy Commissioner of Taxation v Meredith at .
- Secondly, an oversight within Mr Zoef’s solicitor’s office does not warrant dispensing with the requirement as to time in subrule (3A).
- Thirdly and in any event, in relation to the claim for pre-judgment interest from 22 August 2013, the affidavit by Mr Zoef’s solicitor contained no explanation for the omission of this claim in Mr Zoef’s notice of motion. It can be inferred from Mr Zoef’s further submissions dated 16 November 2016 that this may have been due to an oversight by his counsel. However, that is not a sufficient basis to dispense with the requirement that any application to vary or set aside the judgment be made by a notice of motion filed within the 14-day period.
- It should be accepted, as the respondent contended, that none of the sources of power in UCPR r 36.16 is enlivened in the present case. I would add that even if s 14 affords the power for which Mr Zoef contends, for the reasons given below, the merits do not favour the variations sought relating to a special costs order in relation to the costs of the appeal or the award of prejudgment interest.
Slip rule – UCPR r 36.17
- The relief sought in Mr Zoef’s notice of appeal included:
(3) verdict for the appellant in the amount of $150,000.
(4) an order that the respondent pay the appellant’s costs of the trial on an indemnity basis.
(6) an order that the verdict and judgment be backdated to 16 October 2015.
- At the hearing of the appeal no reference was made in Mr Zoef’s written or oral submissions to the relief sought in pars 4 or 6 of the notice of appeal. It seems that those matters were overlooked by counsel for Mr Zoef. The Court did not deal with these claims for relief in its principal judgment.
- The slip rule has been held to permit applications for variations of orders where the mistake or error requiring the change lay in a party’s failure to advert to a matter at the time of the hearing. In Roads and Traffic Authority of NSW v Palmer (No 2)  NSWCA 140 at , Giles JA (Spigelman CA and Handley JA agreeing) referred with approval to the following statement by Toohey J in Raybos Australia Pty Ltd v Tectran Corporation Ltd (1988) 77 ALR 190 at 191:
In many cases the slip rule or its equivalent is invoked when, through error or oversight, a judgment or order fails to express correctly the intention of the court at the time when the judgment or order was announced. But it is clear that this power of correction extends to cases where a matter, through inadvertence, was not dealt with at the hearing. In that case the purpose of correction is not to give expression to the intention of the court at the time the judgment or order was pronounced …
- Giles JA continued at  as follows:
Applications under a slip rule have been entertained to vary orders by inclusion of interest in a judgment (L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) (1982) 151 CLR 590; Gould v Vaggelas (1983) 157 CLR 271), ordering repayment of the judgment sum (The Commonwealth of Australia v McCormack (1984) 155 CLR 273; Production Spray Painting & Panel Beating Pty Ltd v Newnham (No 2) (1991) 27 NSWLR 659) and making an order for costs (Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd). This has been so “regardless of whether the order has been drawn up, passed and entered” (L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) at 595; see also Production Spray Painting & Panel Beating Pty Ltd v Newnham (No 2)at 661).
- To similar effect are the observations of the Full Federal Court in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 at 391 where Lockhart J (Black CJ agreeing) said:
It is well settled that the application of the slip rule is not confined to giving effect to the intention of the judge at the time when the Court’s order was made, or judgment given. It extends to the intention which the Court would have had, but for the failure that caused the accidental slip or omission: Symes v Commonwealth of Australia (1987) 89 FLR 356. The rule also extends to permit the correction of an order or decree where the omission results from the inadvertence of a party’s legal representative: Fritz v Hobson at 561-562; Chessum and Sons v Gordon  1 KB [sic] 694; Tak Ming Co Ltd at 304; Shaddock per Mason ACJ, Wilson and Deane JJ at 594-5; and Gould v Vaggelas at 274-275.
(i) Back-dating the date of judgment
- UCPR r 36.4 provides that, generally speaking, a judgment or order takes effect on the date on which it is given or made: UCPR r 36.4(1). This is qualified by subrule (3) which provides:
Despite subrules (1)… the court may order that a judgment or order is to take effect as of a date earlier or later than the date fixed by those subrules.
- Where a plaintiff obtains an entitlement to an award of damages, or to an increased award of damages, as a result of an appeal court judgment, it is necessary to determine when that entitlement took effect: Najdovski v Crnojlovic (No 2)  NSWCA 281 (Najdovski v Crnojlovic) at  (Basten JA, Allsop P and Windeyer J agreeing). There, Basten JA canvassed two possibilities. One is that the judgment takes effect from the date on which it is delivered by the appeal court. The other is that the judgment of the appeal court is back-dated. With respect to the first possibility, Basten JA said that it will usually be appropriate to include an amount by way of pre-judgment interest to cover the period during which the successful appellant has been deprived of the damages since the trial judgment, but that is done by exercise of the power to award pre-judgment interest: Nicol v Allyacht Spars Pty Ltd(1988) 165 CLR 306;  HCA 48 at 312. With respect to the later possibility, Basten JA said (at ):
If the effect of the judgment is back-dated … [an award of pre-judgment interest] will not be appropriate, but the plaintiff will be entitled to post-judgment interest until the relevant amount is paid.
- The authorities reveal competing approaches to the exercise of the power to back-date a judgment. In McKensey v Hewitt (2004) 61 NSWLR 54;  NSWSC 636 at -, Young CJ in Eq said that the power to back-date a judgment has been interpreted as authorising the Court to do so only on some good ground, that is, where there is something exceptional in the facts. That case concerned Part 40 r 3 of the Supreme Court Rules 1970 (NSW) (SCR), the predecessor of UCPR r 36.4(3).
- The view of Young CJ in Eq reflects the approach in cases such as Borthwick v Elderslie Steamship Co (No 2)  2 KB 516 (Borthwick). There, the plaintiff failed at first instance in his claim for damages but succeeded on appeal to the English Court of Appeal. After noting (at 519) that judgment of the Court of Appeal “is not ipso facto antedated by reason that it is substituted for the judgment in the Court below”, Collins MR observed that the power to antedate ought only be used on good grounds being shown.
- In Borthwick, there had been no delay attributable to one of the parties, and no contumacy or unreasonable act of the defendants such that they ought to be treated as in default by reason of the postponement of the question of their liability, as if it arose from their own action. Accordingly, it was concluded that no case had been established for back-dating the judgment of the Court of Appeal in order that the successful plaintiff could get interest for the time that elapsed between the trial and that judgment.
- A more flexible approach can be seen in GIO of NSW v Healey (No 2) (1991) 22 NSWLR 380;  NSWCA 103 (GIO v Healey) at 387, where Kirby P held that the power to order a judgment take effect earlier than from the date on which it would ordinarily take effect provided “an important degree of flexibility to the Court”, allowed it “to do what is just in the particular case where the usual position … would produce unfairness” and allowed “the Court to avoid rigidity and to accommodate the general rule of the necessity of the case.”
- Similarly, in Harmer v Hare (No 2)  NSWCA 58 (Harmer v Hare) the Court (Beazley and Whealy JJA and Sackville AJA) accepted (at ) that the discretion conferred by UCPR r 36.4(3) is primarily, though not exclusively, concerned with instances where there has been delay between the adjudication of the claims in the proceedings and the formal pronouncement or order. Whilst acknowledging that the power to back-date a judgment is not confined to this situation, the Court observed (at ) that the circumstances warranting its exercise in other situations may be said to be relatively circumscribed.
- The approach to UCPR r 36.4(3) favoured in GIO v Healey and Harmer v Hare was referred to with approval in Gacic v John Fairfax Publications Pty Ltd NSWCA 99 at - (McColl JA, Macfarlan and Barrett JJA agreeing).