Boland v Dillon; Cush v Dillon

1. [1]

   McCOLL JA: I have had the advantage of reading in draft the reasons of Bergin CJ in Eq. In these reasons I use the definitions her Honour has ascribed to the relevant orders and hearings.

2. [2]

   As her Honour has explained, the applicants seek orders pursuant to s 135 of the Civil Procedure Act 2005 (NSW) (the “CPA”) precluding the respondent from enforcing the 2010 Costs Orders.

3. [3]

   The 2010 Costs Orders were made by this Court when allowing the respondent’s appeals from the first trial and holding that the primary judge had erred in failing to find that the publication had occurred on a privileged occasion. [1] Subsequently the applicants appealed by grant of special leave to the High Court of Australia. That Court dismissed the appeals with costs. [2]

4. [4]

   French CJ, Crennan and Kiefel JJ expressed the view in their joint reasons that the third order of the Court of Appeal in the 2010 Appeal should be varied to require a new trial on the issue of malice. [3] Gummow, Hayne and Bell JJ in their joint reasons and Heydon J in separate reasons also agreed that the appeal should be dismissed with costs, but did not expressly address the ambit of the new trial. However as the High Court unanimously held that the matter complained of was published on an occasion of qualified privilege, the only remaining issue was whether the respondent was actuated by malice in speaking the impugned words. That was the manner in which both parties approached the re-trial. [4]

5. [5]

   On 27 October 2014, some sixteen months after the re-trial was determined in their favour, the applicants filed their Notices of Motion seeking to preclude the respondent from enforcing the 2010 Costs Orders.

6. [6]

   The respondent identified a threshold issue in her written submissions in this Court, namely that the Motions should have been filed in the High Court as it was the last appellate court to consider the 2010 Costs Orders and its decision supplanted any orders made by this Court in the 2010 Appeal.

7. [7]

   The applicants did not file any reply submissions, nor did Mr T Alexis of Senior Counsel, who appeared with Mr R Hardcastle for the applicants, address the threshold issue in his oral submissions. It can be taken, accordingly, in my view, that he had no response to it.

8. [8]

   The Honourable Mr Justice K R Handley explained in Spencer Bower and Handley: Res Judicata, that when “an appeal fails, the decision of the appellate court becomes the source of any estoppels”. [5] The reason for this consequence has been variously expressed. The orders of the lower court are said to have “become merged in the judgment” of the appellate court, [6] or to have been “replaced” by the decision of the appellate court, whose decision is henceforth “the operative decision … for all purposes”. [7]

9. [9]

   Put slightly differently, the High Court decision confirmed that the 2010 Appeal decision was correct but, as the higher appellate court, its decision “holds the field so long as it stands unreversed, and precludes this court making any judicial determination to the contrary.” [8] Acceding to the applicants’ Motions would prevent the respondent from enforcing the 2010 Costs Orders and would, accordingly, subvert the High Court’s implicit decision to let those orders stand. It would, in substance, be a decision to the contrary of the High Court’s.

10. [10]

    Accordingly, this Court cannot accede to the Motions because the 2010 Costs Orders are no longer “a judgment or order of [this] court”. [9] Rather, as I have explained, those orders have become merged in the High Court judgment.

11. [11]

    In my view the applicants’ Notices of Motion were incompetent. [10]

12. [12]

    Alternatively, I would, in any event, dismiss the Motions. The applicants permitted the respondent to participate in the re-trial without any indication that they proposed, at some stage, to challenge the 2010 Costs Orders. The applicants placed much weight, in contending that the s 135 discretion ought to be exercised to reflect the justice of the case, on the respondent’s failure to give evidence at the re-trial. That, in my view, was a forensic decision the respondent was entitled to make, just as the applicants were entitled to re-frame their malice case prior to the re-trial. The transcript of the respondent’s evidence at the first trial was available to the applicants and, as Bergin CJ in Eq’s reasons demonstrate, was used to their advantage at the re-trial.

13. [13]

    It might also be presumed that the applicants made a forensic decision not to apply pursuant to Uniform Civil Procedure Rules 2005 (NSW) 36.16(3A) to set aside or vary the 2010 Costs Order within 14 days after it was entered.

14. [14]

    This Court should not condone the applicants’ failure to exercise rights available to them contemporaneously with the delivery of the judgment in the 2010 Appeal by acceding to their Motions nor their egregious delay in taking any steps to preclude the enforcement of the 2010 Costs Orders. To do so would be contrary to the interests of justice generally and as expressed in s 56 of the CPA.

15. [15]

    I agree with the orders Bergin CJ in Eq proposes.

16. [16]

    GLEESON JA: These applications to prohibit enforcement of a costs order made by this Court on 15 July 2010 (the 2010 Costs order) are a belated attempt to challenge such order almost five years after it was made, in circumstances where the applicants cannot now achieve directly under Uniform Civil Procedure Rules 2005 (NSW), r 36.16 what they seek to achieve indirectly relying upon s 135 of the Civil Procedure Act 2005 (NSW). This is because the applicants did not apply by notice of motion seeking to set aside or vary the costs order within 14 days after the 2010 Costs order was entered: r 36.16(3A).

17. [17]

    For the reasons given by Bergin CJ in Eq, with which I agree, there are powerful discretionary reasons against granting the relief now sought by the applicants.

18. [18]

    As to the question of this Court’s power to make such an order, I agree with Bergin CJ in Eq that it is unnecessary to determine this question, for the reasons given by her Honour. These applications are capable of disposition upon the assumption, most favourable to the applicants, that the Court does have power under s 135 to prohibit enforcement of the 2010 Costs order.

19. [19]

    It may be accepted that following upon appeals to this Court and to the High Court, the operative order for a new trial in the District Court on the issue of malice is that of the High Court: Forge v Australian Securities & Investments Commission [No 2] [2007] NSWCA 42; 69 NSWLR 575 (Forge) at [5]. It may also be accepted that the orders of the High Court are now the source of any res judicata estoppels: Forge at [3] citing Wishart v Fraser [1941] HCA 8; 64 CLR 470; R v Marks; Ex parte Australian Building Construction Employees and Builders Labourers’ Federation [1981] HCA 33; 147 CLR 471 at 476.

20. [20]

    However, it does not necessarily follow that the 2010 Costs order made by this Court ceased to have any effect after the High Court dismissed the appeal from the judgment of this Court which included that 2010 Costs order. This is a difficult question. It is unnecessary to determine this question to dispose of these applications.

21. [21]

    I agree with the orders proposed by Bergin CJ in Eq.

22. [22]

    BERGIN CJ in EQ: The applicants, Amanda Cush and Leslie Francis Boland, and the respondent, Meryl Lurline Dillon, have been litigating for many years over a defamatory and false statement made by the respondent that the applicants were having an affair (the Statement). The Statement was made in a work environment and was ultimately found to have been made maliciously to undermine the applicants’ positions in the Border Rivers-Gwydir Catchment Management Authority (CMA).

23. [23]

    The applicants seek orders pursuant to s 135 of the Civil Procedure Act 2005 (CPA) precluding the respondent from enforcing costs orders made by this Court on 15 July 2010 (the 2010 Costs Orders). It is necessary to review some of the litigious history to consider the applications in context.

24. [24]

    In February 2006 each of the applicants commenced proceedings in the District Court of New South Wales against the respondent seeking damages in respect of the publication of the Statement by the respondent in April 2005.

25. [25]

    The trial pursuant to s 7A of the Defamation Act 1974 took place between 5 and 8 November 2007. The jury found that the Statement conveyed defamatory imputations that the applicants in their respective roles with the CMA had acted unprofessionally by having an affair; that Ms Cush was undermining Mr Boland’s marriage; and that Mr Boland was unfaithful to his wife. It was common ground at the trial that the applicants did not have an affair and that the respondent did not believe they were having an affair when she made the Statement.

26. [26]

    The hearing in respect of the defence of qualified privilege and malice took place between 9 and 13 February 2009. Judgment was delivered on 25 February 2009: Cush v Dillon; Boland v Dillon [2009] NSWDC 21 (the trial judgment). The trial judge did not determine whether the Statement was published on an occasion attracting qualified privilege because he concluded that even if it were such an occasion the privilege would be lost because of the respondent’s malice. The applicants were each awarded damages of $5,000. These awards were never challenged.

27. [27]

    On 15 July 2010 the respondent’s appeals from the trial judgment were allowed: Dillon v Cush; Dillon v Boland [2010] NSWCA 165 (the 2010 Appeal). The applicants contended in their Notices of Contention that the trial judgment should have been affirmed on the ground that they had established that the publication was actuated by malice. The Court held that the trial judge had erred in failing to find the matter complained of was published on an occasion that attracted the defence of qualified privilege, and too, in finding malice. In dealing with one of the particulars of malice this Court said (at [103]):

28. [28]

    The Court also said (at [110]) that it was “not appropriate for this Court to make findings based on matters that require the evaluation of the Appellant’s evidence and whether it should be accepted”.

29. [29]

    The appeals were allowed, the trial judge’s orders were set aside and a new trial was ordered in respect of the defence of qualified privilege. The orders in each case included the following:

30. [30]

    On 13 August 2010 the orders made by this Court were entered.

31. [31]

    On 10 December 2010 the applicants sought and were granted special leave to appeal to the High Court of Australia. The applicants sought orders that the orders of this Court made on 15 July 2010 be set aside. They also sought an order that the respondent pay their costs of the 2010 Appeal.

32. [32]

    The High Court heard the appeals on 7 April 2011 and delivered judgment on 10 August 2011: Cush v Dillon; Boland v Dillon [2011] HCA 30; 243 CLR 298. The appeals were “dismissed with costs”. The orders for new trials were adjusted to limit them to the issue of malice.

33. [33]

    On 11 November 2010 the respondent’s solicitor had made an offer to settle the proceedings on the basis that there would be a verdict for the respondent (as defendant) and that each party would bear his and her own costs in relation to all proceedings. That offer included the following:

34. [34]

    On 29 February 2012 the applicants (as plaintiffs) filed an application in the District Court to further amend their Replies (which was opposed by the respondent as defendant) to include additional particulars of malice, one of which (particular (xx)) was that the respondent published the defamatory material to undermine the applicants’ positions with the CMA.

35. [35]

    The amendment application was heard on 17 May 2012. On 13 July 2012 the re-trial judge allowed the amendment.

36. [36]

    On 15 October 2012 the respondent sought leave to appeal from the order allowing the amendment. On 30 October 2012 the application for leave to appeal was dismissed with costs: Dillon v Boland; Dillon v Cush [2012] NSWCA 364.

37. [37]

    The re-trial limited to the question of whether malice defeated the defence of qualified privilege was heard for four days in the District Court commencing on 12 November 2012. The respondent did not give evidence at the re-trial.

38. [38]

    In his judgment delivered on 19 April 2013 the re-trial judge found that the respondent misused the occasion of qualified privilege so as to damage the applicants’ reputation in the eyes of the recipient in a manner which constituted malice: Cush v Dillon; Boland v Dillon (District Court (NSW), Charteris SC DCJ, 19 April 2013, unrep) at [110].

39. [39]

    The re-trial judge also referred to the decision made by the respondent for “strategic reasons, for forensic advantage” not to give evidence in the re-trial. The trial judge said:

40. [40]

    The re-trial judge heard the costs argument on 27 June 2013. The respondent’s written submissions on costs referred to the fact that she had been awarded the 2010 Costs Orders, as well as the costs in the High Court.

41. [41]

    The re-trial judge delivered the costs judgment on 3 September 2013. That judgment (Cush v Dillon; Boland v Dillon (District Court (NSW), Charteris SC DCJ, 3 September 2013, unrep) included the following at [2]):

42. [42]

    The re-trial judge then went on to consider the various settlement offers that had been made by the respective parties during the course of the litigation and said (at [35]):

43. [43]

    On 18 November 2013 the following orders were made in each matter:

44. [44]

    On 4 October 2013 the respondent filed a Notice of Intention to Appeal from the re-trial judgment. The time for the filing of a Notice of Appeal expired on 10 December 2013. The respondent did not file a Notice of Appeal.

45. [45]

    There was a delay (not attributable to the parties) from 3 September 2013 to 8 May 2014 in obtaining a copy of the re-trial judge’s costs judgment. In the interim the applicants had pursued the respondent for payment of the judgments. In this regard they had filed an Examination Notice on 27 November 2013.

46. [46]

    On 6 March 2014 the respondent’s solicitor wrote to the applicants’ solicitor noting that an Examination Order had been issued against the respondent, service of which was effected on 3 March 2014. The respondent’s solicitor noted that the respondent had already paid the judgment amounts of $6,600 to each applicant on 20 December 2013 and interest on 3 February 2014. It was also noted that costs had not been assessed. It was suggested that the Examination Order was an abuse of process and should be withdrawn. That letter included the following (at 1.2):

47. [47]

    The respective solicitors communicated further about the Examination Order which was ultimately withdrawn.

48. [48]

    Notwithstanding the suggestion in the letter of 6 March 2014 that the respondent’s solicitor would write to the applicants’ solicitor separately in relation to the 2010 Costs Orders in favour of the respondent, no such communication was received before 1 September 2014 when the applicants’ solicitor wrote to the respondent’s solicitor in terms that included the following:

49. [49]

    The applicants’ solicitor outlined the reasons for the proposed application including that the Notice of Contention filed in each appeal from the trial judgment contended that the trial judge’s judgment should have been affirmed on the basis that the publication was actuated by malice, and those contentions were fortified on the re-trial by the “strong findings of malice” by the re-trial judge.

50. [50]

    The applicants’ solicitor also noted that the Court of Appeal did not invite submissions on the issue of costs in light of the order for the re-trial. The applicants’ solicitor presumed that the Court of Appeal applied the usual rule that costs followed the event but argued that this overlooked the fact that the respondent’s success on the defence of qualified privilege was subject to the re-trial on malice which was determined decisively against her. The applicants’ solicitor asked the respondent’s solicitor to obtain instructions as to whether the application would be opposed.

51. [51]

    On 10 October 2014 the respondent’s solicitor advised that the respondent did not consent to a permanent stay of the 2010 Costs Orders and would otherwise oppose the application on the grounds that: (1) the applicants had not applied to vary or set aside the 2010 Costs Orders within the required 14 days pursuant to rule 36.16 of the Uniform Civil Procedure Rules (UCPR); (2) the 2010 Costs Orders were currently unenforceable because the costs assessment process had not commenced; (3) the Court of Appeal was functus officio; and (4) the applicants’ delay in bringing the application had caused significant and obvious prejudice to the respondent.

52. [52]

    Each of the applicants filed a Notice of Motion on 27 October 2014 in the 2010 Appeal proceedings from the trial judgment in which the orders are sought pursuant to s 135 of the CPA prohibiting the respondent from enforcing the 2010 Costs Orders. Mr Boland filed an Amended Notice of Motion in Court on 3 November 2014 to mirror the additional order sought by Ms Cush that leave be granted to file a Summons seeking the order prohibiting the respondent from enforcing the 2010 Costs Orders.

53. [53]

    The applications were heard on 12 March 2015 when Mr T Alexis SC, leading Mr R Hardcastle, of counsel, appeared for the applicants and Mr MJ Lewis, of counsel, leading Mr BA Mee, of counsel, appeared for the respondent.

54. [54]

    The applicants relied on the affidavit of their solicitor, Ormonde Roger Butler, sworn on 31 October 2014. The respondent relied on the affidavit of her solicitor, Bruce Norman Burke, sworn on 19 December 2014. The documents referred to by each of the solicitors in their affidavits comprise the judgments, orders, applications and some of the relevant correspondence between the parties over the years pertinent to these applications. There was no cross-examination of the solicitors.

55. [55]

    Mr Butler gave affidavit evidence that when “it became apparent” that the respondent was not intending to proceed with her appeal, he was instructed to take steps to recover the judgment sums and the costs of the District Court proceedings and to obtain a copy of the costs judgment of the re-trial judge delivered on 3 September 2013. Mr Butler also gave evidence that he was instructed at that time to consider “in light of the findings of malice against the [respondent] on the re-trial, the reinstatement of the damages judgments and all of the reasons for judgment given by his Honour”, whether the 2010 Costs Orders were enforceable.

56. [56]

    Mr Butler described the process by which he obtained the copy of the costs judgment and the delay in obtaining it. When Mr Butler received the judgment on 8 May 2014 he forwarded it to senior counsel who was unfortunately heavily committed in other work and was “largely unavailable” for some months. Mr Butler took the view that it was preferable to wait until senior counsel became available as he had been involved in the matters for many years.

57. [57]

    The application is made pursuant to s 135(2)(c) of the CPA. Section 135 provides as follows:

58. [58]

    This statutory power is concurrent with the Court’s inherent jurisdiction and may be exercised on the basis of facts and circumstances occurring after the date that the order was made: Australian Beverage Distributors Pty Ltd v Evans & Tate Premium Wines Pty Ltd [2007] NSWCA 57; (2007) 69 NSWLR 374 per Beazley JA (as her Honour then was) at 402 [140], with whom Hodgson and Santow JJA agreed; Permewan Wright Consolidated Pty Ltd v Attorney-General for the State of New South Wales on the relation of Franklins’ Stores Pty Ltd (1978) 35 NSWLR 365 per Reynolds JA at 367 F and Mahoney JA at 374 E.

59. [59]

    The applicants accepted that there was an avenue available to them under UCPR 36.16 to have the 2010 Costs Order set aside or varied. UCPR 36.16(3A) provides that within 14 days after the relevant order is entered a Notice of Motion may be filed seeking to set aside or vary the order.

60. [60]

    In D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 at 17 [34] the High Court referred to the “central and pervading tenet of the judicial system” that controversies that are resolved are not to be reopened “except in a few, narrowly defined, circumstances”. In Burrell v The Queen [2008] HCA 34; (2008) 238 CLR 218 at 223 [15] Gummow A-CJ, Hayne, Heydon, Crennan and Kiefel JJ said that such tenet “finds reflection in the restrictions upon reopening of final orders after they have been formally recorded”. UCPR 36.16 contains such defined circumstances in which an order may be reopened. The discretion under UCPR 36.16 is to be exercised “sparingly”: Grace v Thomas Street Café Pty Ltd (No 2) [2008] NSWCA 72 at [8]. In exercising the discretion it is necessary to have regard to the public interest in the finality of controversies: Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133; (2008) 75 NSWLR 462 at 466 [15] per Basten JA with whom Giles and Ipp JJ agreed. In De L v Director-General, Department of Community Services (NSW) (No 2) [1997] HCA 14; (1997) 190 CLR 207 Toohey, Gaudron, McHugh, Gummow and Kirby JJ said at 223:

61. [61]

    The applicants submitted that the respondent’s success in the 2010 Appeal did not determine liability for the defamatory publication. Rather it was subject to the applicants’ contention of malice and the re-trial. The applicants submitted that they won decisively at the re-trial on the respondent’s evidence that was before this Court in the 2010 Appeal. The applicants submitted that the re-trial judgment showed that the applicants’ contention that the trial judge’s judgment should have been affirmed on the grounds of malice was correct.

62. [62]

    The applicants also submitted that the respondent’s conduct of the trial, the appeal and the re-trial all occurred in circumstances where the applicants had in 2007 offered to settle the proceedings with the respondent for payment of $1 and their party/party costs. It was also submitted that the effect on the costs discretion of prior settlement offers being unreasonably rejected could not be determined until after the re-trial.

63. [63]

    In all of those circumstances the applicants submitted that it is appropriate for each party to pay their own costs of the 2010 Appeal. This would be the effect of prohibiting the respondent from enforcing the 2010 Costs Orders. This is quite a different outcome to the order sought and refused in the High Court that the respondent pay the applicants’ costs of the 2010 Appeal.

64. [64]

    The respondent did not address the order sought by the applicants in the High Court that she pay their costs of the 2010 Appeal. Rather it was submitted that when the applicants sought an order that the orders made by the Court of Appeal “be set aside” this included the 2010 Costs Orders. It was submitted that because the applicants’ appeals were “dismissed with costs” the High Court was therefore the last appellate court to consider the 2010 Costs Orders and its decision supplants the orders of the Court of Appeal.

65. [65]

    The respondent submitted that the applicants have by the filing of the Motions in this Court attempted to subvert the appellate process that relevantly includes the principles of functus officio, res judicata and/or issue estoppel: Shedden v Patrick (1854) 1 Macq 535, HL, 590 at 599; Wishart v Fraser [1941] HCA 8; (1941) 64 CLR 470; R v Marks; Ex parte Australian Building Construction Employees' and Builders Labourers’ Federation [1981] HCA 33; (1981) 147 CLR 471 at 476.

66. [66]

    The respondent submitted that the judgment and orders of the High Court gave effect to that Court’s manifest intention relating to the application to set aside the 2010 Costs Orders. It was submitted that incidental matters in relation to the enforceability of the 2010 Costs Orders should therefore be directed to the High Court: Re Inchcape (Earl of); Craigmyle v Inchcape [1942] Ch 394; Sakr v Mercantile Mutual Insurance (Australia) Limited [2000] NSWCA 266; K R Handley, Spencer Bower and Handley Res Judicata (4th ed 2009, LexisNexis) at [5.03].

67. [67]

    The respondent also relies upon the following grounds in support of her contention that this Court should not exercise its discretion in the applicants’ favour: (1) the applicants are seeking to re-argue the 2010 Costs Order through a back door which is inconsistent with the jurisdiction conferred on the Court pursuant to s 135 of the CPA; (2) the 2010 Costs Orders were regularly entered and are an indemnity; (3) there has been substantial delay and a fundamental change in the applicants’ approach; (4) the respondent is prejudiced; and (5) the Notices of Motion are an abuse of process.

68. [68]

    Although the respondent did not deal with them in any detail in oral submissions, two inter-related preliminary issues dealt with in her written submissions are: (1) that the applicants are in the wrong court; and (2) the applicants have attempted to subvert the appellate process by bringing these applications in this Court.

69. [69]

    In the first case relied upon by the respondent in respect of these issues, Re Inchcape (Earl of); Craigmyle v Inchcape, the Chancery Division Judge was dealing with an accidental omission by counsel to seek an order for costs. Morton J held that, notwithstanding that the orders had been entered, he had power to revisit the matter under the relevant slip rule and deal with the question of costs (at 399). There is no suggestion in the present case that there was any accidental omission in anything that the applicants did in respect of the 2010 Costs Orders.

70. [70]

    In the second case relied upon by the respondent, Sakr v Mercantile Mutual Insurance (Australia) Limited, the Court of Appeal was dealing with the application of the slip rule in respect of an amendment to a District Court Order.

71. [71]

    In her written submissions the respondent also relied upon Shedden v Patrick (1854) 1 Macq 535, HL, 590 at 599 where Lord Brougham said that the “judgment of this House affirming that below, makes the judgment below a judgment of this House”. Reference was made in that case to the principle that a judgment in a Superior Court shall not be impeached in a lower one (at 601).

72. [72]

    The respondent also relied upon Wishart v Fraser [1941] HCA 8; (1941) 64 CLR 470 in support of the proposition that the applicants are barred from bringing the present applications by reason of the High Court’s dismissal of their appeals. Wishart v Fraser was a case in which a solicitor had been convicted in the Court of Petty Sessions of an offence under the National Security Act 1939-1940 and the associated Regulation of endeavouring to cause disaffection among members of the Second Australian Imperial Forces. The solicitor appealed to the Court of Quarter Sessions. The Chairman of Quarter Sessions dismissed the appeal and confirmed the conviction and sentence of imprisonment with hard labour for a term of six months. The Chairman of Quarter Sessions also refused to exercise his discretion under s 5B of the Criminal Appeal Act 1912 to submit a question or questions of law to the Court of Criminal Appeal for determination. The solicitor then obtained a rule nisi for a writ of prohibition before a single judge of the High Court which was made returnable before the Full Court. The High Court discharged the rule nisi.

73. [73]

    The procedural intricacies of the existence of the order in the Court of Quarter Sessions were analysed by Dixon J (at 480-482) and resolved by the solicitor making application for special leave to appeal from the decision of the Court of Quarter Sessions exercising Federal jurisdiction (at 483). Special leave was refused. In discussing the status of the decision of the Court of Quarter Sessions Rich ACJ said at 477:

74. [74]

    Dixon J said at 482:

75. [75]

    In Thiess Pty Ltd and Hochtief AG v Industrial Court of New South Wales [2010] NSWCA 252; (2010) 78 NSWLR 94 Basten JA observed, at 110 [83], that Wishart v Fraser “dealt with the old quarter sessions appeals from convictions in petty sessions, being hearings, de novo” with the consequence that the District Court decision left no decision of the Court of Petty Sessions to be reviewed.

76. [76]

    The respondent also relied upon R v Marks; Ex parte Australian Building Construction Employees and Builders Labourers’ Federation [1981] HCA 33; (1981) 147 CLR 471. In that case the applicant had failed to join as respondents to his application members of the Full Bench of the Australian Conciliation and Arbitration Commission that had dismissed the appeal from the relevant decision of the Deputy President, Marks J. Mason J said at 476 (footnotes omitted):

77. [77]

    Although not referred to by any of the parties, this Court addressed this issue in Forge & Ors v Australian Securities & Investments Commission [No 2] [2007] NSWCA 42; (2007) 69 NSWLR 575 where the Court (Santow and McColl JJA and Handley AJA) said at 576 [3]:

78. [78]

    There is nothing in the applicants’ contentions in their written submissions in the High Court relating to the 2010 Costs Orders. However under the heading “Orders sought” at the end of the submissions there is the order that the respondent pay the applicants’ costs of the 2010 Appeal. The transcript of the argument before the High Court is not in evidence and it is not known whether this was a consequential order on the basis of a successful challenge to this Court’s judgment or whether there was some argument on the particular orders.

79. [79]

    In any event once the applicants sought that different order in the High Court they put in issue the 2010 Costs Orders of this Court. The High Court dismissed the applicants’ appeals with costs. Thus the High Court affirmed this Court’s judgment including the 2010 Costs Orders. Although it was not the subject of evidence it appears that the orders entered by the High Court did not expressly include the 2010 Costs Orders as the orders of the High Court. If in place of this Court’s judgment in the 2010 Appeal including the 2010 Costs Orders the operative decision is now a judgment of the High Court, these applications must be dismissed.

80. [80]

    As this is the outcome that I propose in any event, it is not necessary to consider these issues further. An additional reason not to consider the matter further is that these issues were not fully argued on the applications. I will consider the balance of the applicants’ contentions on the assumption that they are entitled to bring these applications in this Court.

81. [81]

    The applicants submitted that notwithstanding the fact that it is now close to five years since the 2010 Costs Orders were made, the justice of the case requires the exercise of this Court’s discretion to prohibit the respondent from enforcing the Orders. The applicants emphasised the respondent’s failure to give evidence at the re-trial and contended that the outcome of the re-trial was consistent with their Notices of Contention in the 2010 Appeal.

82. [82]

    It is not correct to align the result in the re-trial with the matters in the applicants’ Notices of Contention. The basis upon which the re-trial judge concluded that there was malice included the new particulars of malice that were not pleaded in the Further Amended Replies until two years after the 2010 Costs Orders were made.

83. [83]

    When the re-trial judge delivered his judgment in the applicants’ favour on 19 April 2013 in which malice was found to have defeated the defence of qualified privilege, they knew that they had been successful. They did not take any steps to communicate with the respondent their desire to either vary or set aside the 2010 Costs Orders. That did not occur until approximately one year and five months later when the applicants’ solicitor wrote to the respondent’s solicitor by letter of 1 September 2014 giving notice that they had been instructed to make the application. In the meantime the following had occurred:

84. [84]

    The applicants submitted that although their failure to make an application under UCPR 36.16 to vary the 2010 Costs Orders is a factor for consideration in the exercise of this Court’s discretion on the applications, it is not a powerful one.

85. [85]

    The applicants submitted that in 2010 they could not have supported any application for the variation of the 2010 Costs Orders until the result of the re-trial was known. However, the very fact that they could not seek a variation of the order on that basis could itself have supported a submission that it would be reasonable to make an application for an order that costs be reserved and/or abide the outcome of the re-trial.

86. [86]

    I agree with the applicants’ submissions that notwithstanding the failure to make such an application, the Court may still make an order under s 135 of the CPA. However much will depend upon the particular circumstances of the case. In this instance the delay in bringing this application is quite extraordinary. Even assuming that the applicants might be excused for not bringing the application until the outcome of the re-trial was known, there is no proper explanation for the delay between April 2013 and 1 September 2014 for communicating to the respondent the intention to bring the application.

87. [87]

    The applicants relied upon the delay in the provision of the re-trial judge’s costs judgment as part of their explanation for their delay in bringing the application. This is a difficult submission for the applicants having regard to the reminder given to them on 30 October 2012 by former President Allsop in his judgment (with the agreement of McColl JA) dismissing the respondent’s application for leave to appeal from the re-trial judge’s judgment allowing the further amendment to the applicants’ Replies. The President referred to his previous statement in Kounnas v Citywide Civil Engineering Pty Ltd [2012] NSWCA 287 at [14]-[16] as follows ([2012] NSWCA 364 at [5]):

88. [88]

    The President’s remarks are apt. There is no suggestion there was any delay in the provision of the re-trial judgment in which liability was established. That was delivered on 19 April 2013. There is no justifiable basis for the applicants waiting another year and five months after that judgment or another year after the costs judgment was delivered before advising the respondent of the intention to bring the present application.

89. [89]

    The respondent claims that she is prejudiced by the delay. The applicants accepted that there is presumptive prejudice but submitted that there is no evidence of material prejudice (tr 12). Although the respondent’s solicitor gave affidavit evidence annexing the various documents to which reference has already been made, there is no evidence given by him of any decision that had been made in reliance upon the existence and/or enforceability of the 2010 Costs Orders.

90. [90]

    Counsel for the respondent, Mr Lewis, provided written submissions in which the following was said (at [4.18] – [4.19]):

91. [91]

    There is no evidence to support the propositions in these written submissions. However common sense suggests that the overall costs position would be crucial to decision making in respect of the finalisation of this litigation. However what the respondent may or may not have done if the applicants had communicated the intention to make the application earlier is not the subject of any evidence.

92. [92]

    The applicants could have brought the application on a number of specific occasions. They could have done so pursuant to UCPR 36.16 within fourteen days of the entry of the orders in August 2010. They could have done so explicitly in the High Court in 2011 by seeking an order that the costs of the 2010 Appeal be reserved or abide the outcome of the re-trial rather than, or alternatively to, the order that the respondent pay their costs of the 2010 Appeal. They certainly could have sought some agreement from the respondent at any stage of the litigation prior to the re-trial judge giving his costs judgment in September 2013. They could have done so in April 2013 after the re-trial judgment on liability was delivered. They could have done so at any time in the year from September 2013 after the costs judgment was given.

93. [93]

    The respondent submitted that the applicants were waiting for time to expire on her Notice of Intention to Appeal before they notified her of the intention to bring the application. It was submitted that this was inexcusable delay and contrary to the duty to assist the Court to further the overriding purpose of the CPA. It was submitted that the applicants had a duty to act earlier and to communicate their intentions to the respondent promptly: Kelly v Mina [2014] NSWCA 9 per Barrett JA at [48].

94. [94]

    The respondent also submitted that the application cannot be seen as anything other than an ambush or a surprise. There is no doubt that the modern way of litigating matters in all Courts is inconsistent with such a concept: Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 per Allsop P at [160]-[161].

95. [95]

    It was submitted that the applicants’ explanations for the delay in communicating their intention to make the application and indeed filing it promptly were grossly inadequate. I agree.

96. [96]

    There is no proper explanation for the applicants’ delay of five years in bringing this application. I do not accept that the uncertainty as to the outcome of the re-trial was an impediment to them seeking to bring an application under either UCPR 36.16 or s 135 of the CPA.

97. [97]

    I am satisfied that justice dictates that these applications should be dismissed.

Orders

1. [98]

   Having regard to the costs that have been incurred by the parties in this litigation, I do not regard it as appropriate to require the imposition of further expense by the requirement to file a Summons seeking the relief that is sought in the Notices of Motion.

2. [99]

   The orders that I propose are:

   1. (1)

      In matter 2009/298338 the Notice of Motion is dismissed, with costs;

   2. (2)

      In matter 2009/298211 the Amended Notice of Motion is dismissed, with costs.