Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd (No 2)

1. [1]

   THE COURT: On 7 March 2016, the Court gave judgment in this matter in which it declared that:

2. [2]

   The effect of the Court’s declaration was that the respondent, as cross-appellant, succeeded on the cross-appeal. Costs orders were made in favour of the respondent both on the appeal and as cross-appellant on the cross-appeal.

3. [3]

   By notice of motion filed 7 April 2016, the respondent sought the following orders under the Uniform Civil Procedure Rules 2005 (NSW) (UCPR):

4. [4]

   The notice of motion was supported by an affidavit of Richard Asfour, the solicitor on the record for the respondent on the appeal and for the cross-appellant on the cross-appeal.

5. [5]

   The monies in question were paid on settlement in circumstances in which, by virtue of the orders made by the court below, the cross-respondent was entitled to interest on the purchase price. The interest claimed by the cross-respondent and paid by the cross-appellant on settlement was $30,758.13. The cross-appellants have limited their claim on this notice of motion to $24,302.72. The difference reflects the fact that there was no dispute the cross-appellant had failed to comply with the original settlement date of 31 January 2015. The difference between this Court and the primary judge concerned the position from 16 February 2015 onwards.

The conduct of the appeal

1. [6]

   During the course of the appeal, a proposed further amended notice of cross-appeal had been prepared seeking orders by way of restitution of the sum of $24,302.72 paid by the cross-appellant to the cross-respondent on settlement of the contract, together with interest on that sum.

2. [7]

   The proposed further amended notice of appeal had been provided to the cross-respondent’s solicitor the day before the hearing of the appeal and to counsel on the morning of the hearing. In the circumstances, the Court gave counsel time to obtain instructions as to the cross-respondent’s position in relation to the proposed further amended notice of cross-appeal. The manner in which this occurred was as follows:

3. [8]

   The Court did not receive any note from the cross-respondent as to its position in respect of the proposed further amended ground of appeal. The Court did not advert to that question in its reasons or orders.

The cross-appellant’s notice of motion

1. [9]

   The cross-respondent submitted, in response to the notice of motion, that the Court did not grant leave to file the further amended notice of cross-appeal and that the Court’s failure to deal with the cross-appellant’s application was due to the cross-appellant’s failure to raise the issue until late in the afternoon of the hearing.

2. [10]

   Whatever criticism may rightly be levelled at the cross-appellant for raising the matter late in the proceedings, we do not consider that the cross-respondent’s submission accurately captures what occurred at the hearing. As the passage of the transcript set out above makes clear, the Court was expecting to be advised by the cross-respondent as to whether or not it consented to leave being granted for the cross-appellant to file the further amended notice of cross-appeal. That advice was not forthcoming.

3. [11]

   Nonetheless, the application for leave to file the further amended notice of cross-appeal having been made, it was incumbent upon the Court to deal with it. As the transcript reveals, it was anticipated that the Court would do so as part of its determination of the appeal and cross-appeal. It was an oversight on the part of the Court not to do so.

Entitlement to relief

1. [12]

   The notice of motion sought relief pursuant to UCPR, r 36.17, which provides:

2. [13]

   Before dealing with the question whether UCPR, r 36.17 applies to the circumstances at hand, it is to be observed that there are other provisions under which a judgment or order may be set aside or varied. Relevantly, they include:

3. [14]

   Accordingly, the cross-appellant will only be entitled to have its application dealt with if it falls within the purview of the Court’s power under r 36.17.

4. [15]

   The Court’s power to order restitution is to be found in the Supreme Court Act 1970 (NSW), s 75A and UCPR, rr 51.19 and 51.54: see Ambulance Service of NSW v Worley (No 2) [2006] NSWCA 236; 67 NSWLR 791 at [29]-[30]; Cai v Zhang (No 2) [2009] NSWCA 317 at [26]. In TCN Channel 9 v Antoniadis (No 2) [1999] NSWCA 104; 48 NSWLR 381 at [8], this Court held that the equivalent provisions under the Supreme Court Rules “should be construed as conferring a power to order restitution and not a discretion to refuse it”.

5. [16]

   The position that the Court takes in this matter is that it omitted to deal with the application to file the further amended notice of cross-appeal. Had it done so, the Court would have granted leave to the cross-appellant to file the further amended notice of cross-appeal. As was stated in Production Spray Painting and Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659, “an order for restitution follows as of course from the quashing of the orders [below]”. See also Cai v Zhang (No 2) at [24] per Basten JA; Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; 53 NSWLR 600 at [14]. That right is a right to restitution with interest: Heydon v NRMA Ltd (No 2) at [14].

6. [17]

   As the authorities make clear, the Court would have been required to make the order for restitution even had the formalities of including the claim in the further amended notice of cross-appeal not been observed.

7. [18]

   The omission of the Court to address the proposed further amended notice of cross-appeal, and thereby the issue of restitution of moneys paid by the cross-appellant, is a matter appropriate for correction under the power in r 36.17. The following remarks of McHugh JA in Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 at 452, concerning a provision of the District Court Rules 1973 (NSW), which were in much the same terms as r 36.17, are apt in this regard:

8. [19]

   The cross-respondent did not dispute the amount claimed by the cross-appellant by way of restitution. Rather, the cross-respondent’s objection to the orders being made related to the fact that the matter had been remitted to the Equity Division for the hearing of the cross-appellant’s claim for damages. The cross-respondent contended that the claim for restitution could be dealt with in the damages claim. The Court does not accept this contention. It is difficult to see that a claim for restitution such as is made here could properly be said to be part of the damages claim arising from the cross-respondent’s wrongful termination of the contract. Rather, the claim for restitution arises out of a court order, being the order made at first instance, that has been held to have been wrongly made.

9. [20]

   The Court accepts, however, that in circumstances where the cross-respondent has filed an application for special leave, it is appropriate to stay the enforcement of the order for restitution until the determination of the special leave application and, if granted, until the determination of the appeal.

Costs

1. [21]

   The parties adopted diverging positions in relation to the costs of this motion. The cross-respondent submitted that it should have an order for costs of the notice of motion, being “the usual order on such applications”. In this regard, the cross-respondent referred to Production Spray Painting and Panel Beating Pty Ltd v Newnham (No 2); TCN Channel 9 v Antoniadis (No 2) at [20]; Loose Fit Pty Limited v Marshbaum & Ors (No 2) [2012] NSWCA 23 at [18]; and Hume v Walker (No 2) [2005] NSWCA 458 at [24].

2. [22]

   A measure of caution is necessary whenever it is said that there is a “usual rule” as to costs. Pursuant to the Civil Procedure Act 2005 (NSW), s 98, costs are in the discretion of the court. UCPR, r 42.1 provides that:

3. [23]

   The courts may, and often do, develop “guides” or make statements as to what the appropriate order will usually be in particular categories or circumstances. However, the orders made depend upon the circumstances of each case. The question remains one of discretion, subject to UCPR, r 42.1.

4. [24]

   As this Court explained in His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 142 at [28]:

5. [25]

   In any event, contrary to the cross-respondent’s submission, the cases cited do not stand for authority that there is a “usual rule” as to the costs on a notice of motion of the kind here in question.

6. [26]

   In the present case, the cross-appellant made a claim for restitution, but did so late in the proceedings. The cross-respondent was given time to respond to that application, but did not do so. Having regard to the principles to which we have referred, the Court would have been required to reject any opposition to the making of the order. In the circumstances, we consider that the appropriate order is that each party pay its own costs of the motion.

Orders

1. [27]

   The Court orders: