Wong v Van Vlymen & Ors

I gave judgment in this matter on 2 July 2020 (see [2020] NSWSC 841). At paragraph [176], I invited the parties to relist the matter so orders could be made and questions of costs determined. The matter was relisted by the parties on 11 August 2020. For the first time, the first and second defendants (hereafter ‘the defendants’) referred me to Young CJ in Eq’s judgment in 260 Oxford Street Pty Ltd & Ors v Premetis & Anor [2006] NSWCA 96 at [136] (‘260 Oxford Street’), where his Honour said:

They asserted I had failed to deal with a number of matters concerning interest. Specifically, the Van Vlymen Entities’ application deals with Items 2, 4, 5 & 8 of the plaintiffs’ claim which are outlined at [23] of my previous judgment.

As I was concerned about the time between the date my decision was handed down and when these matters were raised, my view was that the most efficient way to deal with them was for the parties to provide written submissions and for one hour to be set aside for further argument if it was required.

The defendants’ filed a notice of motion during the afternoon of 11 August 2020 (after the listing) seeking that I recall my reasons and deliver amended reasons. The defendants provided written submissions on 19 August 2020. The plaintiffs provided written submissions on 25 August 2020.

Having read the parties’ submission, I determined that an oral hearing was not necessary, particularly given the time and expense the parties have devoted to this matter already. It was the defendants’ view at the directions hearing on 11 August 2020 that the matter ought to be dealt with on the papers. And the plaintiffs’ in their written submissions raised concerns about the costs that would be incurred if a further hearing was required “when there are already serious concerns about recoverability from the Defendants”.

The defendants submit that one of their arguments with respect to Items 2, 4, 5 & 8 was summarised at [58] of my judgment but not otherwise dealt with:

They say the argument was put in their written opening submissions of 27 May 2020 at [31]; their written closing submissions of 3 June 2020 at [31] (which the plaintiffs assert were not served or filed); their written summary of contentions of 9 June 2020 at [7], [10], [15] and [17]; and by Mr Leopold SC in oral submissions at T91 L31-37, T98 L50- T99 L36, T116 L31- L39, and T126 L1-L3.

The “significant benefits” which are said to have accrued to the Wong Entities are “a right to dividends flowing from the subject shares”. The defendants submitted that:

However, they also submitted that it should have fallen to the plaintiffs to inform me of any other benefits they received but they did not do so (T99 L15-16).

Further, the defendants submit that there is a factual misapprehension at [116] (sic) of my judgment where I state:

(This statement in fact appeared at paragraph [117].) The defendants say that on 6 March 2017 receivers were appointed for the entities that held the first defendant’s 50% share in the Solomon Islands joint venture and, accordingly, the defendants in fact (contrary to [116] (sic)) did not have possession since 6 March 2017. They refer to another of my previous judgments in this matter ([2018] NSWSC 312) where I found (at [33]):

The defendants submit that these matters fit within the purview of a recall application and are sufficiently important to justify further consideration, given that the quantum of the defendants’ indebtedness is directly affected by the resolution of the arguments put by the defendants. They rely upon the statement of Young CJ in Eq in 260 Oxford Street Pty Ltd & Ors v Premetis & Anor [2006] NSWCA 96 at [136] set out above and Ozecom v Hudson Investment Group [2007] NSWSC 1441 at [5] (‘Ozecom’), where McDougall J said:

The plaintiffs dispute the defendants’ allegation that the Court has not dealt with the issues raised by the defendants. They submit that the defendants overlook paragraph [59] of my judgment where I summarised the plaintiffs’ response to the defendants’ argument regarding the benefits that allegedly accrued to the Wong Entities in respect of the shares they retained. They say the defendants also overlook paragraphs [114]-[116] and [166] and [168] where I accepted the plaintiffs’ argument. They submit those paragraphs give sufficient reasons for the rejection of the defendants’ argument to enable the issue to be fully considered on appeal, if sought by the defendants.

With respect to the alleged factual misapprehension, the plaintiffs point out that their argument (summarised at [59] of my judgment) was that the defendants had been “effectively in control of the companies to the exclusion of Mr Wong until around March 2017” (emphasis added). At trial, and apparently since then, there was and has been no dispute of that fact. The plaintiffs submit that is consistent with [116] (sic) of my judgment, which states the purchaser had been in possession “during the period of delay” (emphasis added), which does not mean the whole period.

The plaintiffs also submit that their argument (as summarised at [59]), accepted by me, was that the Wong Entities were, from March 2017, entitled to interest upon the “liquidated debts” created by the November 2016 Deed, independent of any benefit received, and that, in any event, the parties benefitted equally.

The plaintiffs also dispute the competency of the defendants’ application on the basis that the defendants are long out of time (14 days) to apply for a variation of the judgment under UCPR 36.16(3A), which power they say was created to regularise the exercise of the Court’s inherent jurisdiction, having regard to the entry of judgment under the UCPR upon “publication”. They submit that the authorities cited by the defendants are confined to applications for variation made promptly prior to entry of judgment and in any event this is not an exceptional case warranting the exercise of the Court’s discretion (Wentworth v Rogers [2002] NSWSC 921 from [7], cited in Ozecom at [9]). They also submit that UCPR rr 36.15, 36.16 (1), (2) & (3) and 36.17 do not apply in the present case.

The plaintiffs seek that the notice of motion be dismissed with indemnity costs.

The defendants called in aid the decision of Young CJ in Eq in 260 Oxford Street and the decision of McDougall J in Ozecom to justify the belated raising of my reasoning and findings. As I have noted, the plaintiffs submit that those authorities and others in line with them must be considered and applied in light of the UCPR and, in any event, have no application to the current situation because they concern applications for variation which were made prior to entry of judgment. They also submit that the application should not be entertained as this is not an “exceptional case”.

Given the time and undoubted expense devoted to this matter already, in the end, with the parties’ consent, I determined this matter on the papers. In these circumstances, I did not have the benefit of oral argument. However, on the materials that were before me, I am of the view that the defendants’ application is incompetent but for slightly different reasons to those proposed by the plaintiff.

Young CJ in Eq’s statement in 260 Oxford Street (at [136]) appears to me a clear reference to the inherent jurisdiction of the Court recall and amend its reasons, a procedure which his Honour thought ought to be followed “at least in an equity case such as the present”. Young CJ in Eq, as well as Tobias JA and Basten JA, referred to the decision of Jones J in Brew v Followmont Transport Pty Ltd (No 1) [2005] 2 Qd R 354, in which the defendant drew attention to an incorrect finding of fact by Jones J and sought correction of the reasons in accordance with the principles laid down in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300.

Since that decision was handed down, UCPR 36.16(3A) has been introduced. It provides:

UCPR 36.16(3C) then states, “[d]espite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B)”.

The rationale behind such a rule is obvious. The longer parties wait to approach the judge, the harder it is for the judge to recreate the atmosphere of the case in order properly to do justice to the parties.

UCPR 36.16(1) also provides, however, that “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” (my emphasis).

The plaintiffs raised the question of whether or not any inherent jurisdiction remains following the amendment to the UCPR, citing AT v Commissioner of Police (No 2) [2010] NSWCA 337 at [7]-[14]; Kable v NSW (No 2) [2012] NSWCA 361 at [2]‐[4], [9] and [15]‐[20]; affirmed most recently in Foundas v Arambatzis [2020] NSWCA 51 at [4]). Earlier, in Bennette v Cohen (No 2) [2009] NSWCA 162, the Court of Appeal was concerned with a case in which Campbell JA had made orders on 24 March 2009 (in [2009] NSWCA 60) but ordered that Order (d), concerning costs, be entered only if no notice of motion seeking to vary that order was filed within 14 days. The period expired at 12:00 midnight on 7 April 2009. The respondent entered the orders the following day, 8 April 2009. On 16 April 2009, consent orders were filed whereby it was ordered that the time in which to file any notice of motion on the issue of costs be extended to 22 April 2009. The appellant filed a notice of motion to that effect on 21 April 2009. Then, on 24 April 2009, the respondent filed a notice of motion seeking that Orders (c) and (d) of Campbell JA’s orders be set aside and other associated relief. Tobias JA (Campbell and Ipp JJA agreeing) said (at [6]-[10]):

It seems to me that the defendants’ application must be determined under the UCPR.

Although orders have not yet been entered, the instant judgment was published on NSW Caselaw on 2 July 2020. The question is whether the judgment was “entered” on that day. The plaintiffs state that it was.

Since 7 November 2008, UCPR 36.11(2) has provided that “[u]nless the court orders otherwise, a judgment or order is taken to be entered when it is recorded in the court’s computerised court record system.” In Tarrant v Statewide Secured Investments Ltd [2011] NSWCA 248 at [6], Basten JA (McColl JA agreeing) described the “system of computerised court records” as “JusticeLink”. The circumstances as set out at [8]-[10] were as follows:

At [13], Basten JA said:

It would seem that Adams J’s judgment was not “entered” on 14 May 2009 despite judgment having been handed down on that date.

Another case of relevance is Nominal Defendant v Livaja [2011] NSWCA 121 (‘Livaja’). The Court of Appeal was concerned with an amendment of judgment by Garling DCJ. Garling DCJ had delivered oral reasons and announced a “verdict” in a specified sum. The plaintiff immediately raised a perceived error in the calculation which Garling DCJ said he would consider over lunch. After lunch, he delivered further oral reasons correcting that error. The defendant appealed, arguing that judgment had been “entered” by the oral reasons and therefore any amendment had to be done under the strict UCPR 31.16(3A). Basten JA delivered the judgment of the Court. The defendant’s argument was rejected on the basis that there was no evidence that the judgment had been “entered” into the District Court’s “computerised record system, being part of the Justicelink computer system” prior to the luncheon adjournment (see [19]).

Brooker v Friend & Brooker Pty Limited (No 2) [2008] NSWCA 129 is somewhat analogous to the present case. There, the Court of Appeal had published reasons to the effect that a majority had decided to uphold the appeal but directed the parties to bring in short minutes of order reflecting the reasons. The short minutes that were brought in did not reflect the reasons and led to a notice of motion seeking that the Court recall its reasons for judgment. Although Mason P did not explicitly refer to UCPR 36.16(1), his Honour appeared (at [10]-[11]) to treat the situation as one in which reasons had been published but judgment or orders not entered:

As the plaintiffs point out, Ozecom is another case in which reasons had been published but orders not entered.

It seems to me at least arguable that judgment has not been “entered” in this case. No judgment or order was entered in JusticeLink after my decision was handed down on 2 July 2020. Therefore, whilst it is regrettable that the defendants took so long to raise the matter with me, it does not seem that they ought to be constrained by the 14 day time limit in UCPR 36.16(3A). Rather, it seems UCPR 36.16(1), which is not strictly time limited, applies.

However, my power to recall and amend my reasons under that rule is not unlimited. The plaintiffs relied on Wentworth v Rogers [2002] NSWSC 921 from [7] (cited in Ozecom at [9]), where Barrett J:

Further, as Basten JA stated on behalf of the Court of Appeal in Livaja (at [21]-[25]):

Despite the fact no entry was to be made on JusticeLink that day, I intended to deliver final judgment on the question of whether in principle the plaintiffs were entitled to interest on the various amounts to which Items 2, 4, 5 and 8 relate when I published my reasons on 2 July 2020; what I left to the parties was the calculation of interest on the relevant amounts and the formulation of orders reflecting those reasons. The defendants did not raise their concerns regarding my reasons promptly. As I have stated, the matter was first brought to my attention on 11 August 2020, more than five weeks after publication.

However, in any event, the defendants’ argument was not overlooked. As the plaintiffs point out, their response to the defendants’ argument was summarised immediately following my summary of the defendants’ at paragraph [59]:

The plaintiffs’ submissions on this point were further picked up and accepted at paragraphs [115]-[117] of my judgment:

Finally, at paragraphs [166]-[167] I held that:

Judges are obliged to give adequate reasons. However, the question of adequacy is a relative concept (see Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430, 442-443; Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378, 381). Further, “[j]udges should ordinarily determine all issues before them to assist the appeal process and obviate recourse to a new trial” (Peter Sleiman Investments Pty Ltd as trustee for the Sleiman Family Trust v Deputy Commissioner [2017] NSWCA 81 at [70] (Leeming JA, Beazley P agreeing and Emmett AJA agreeing “generally”)). However, as Young CJ in Eq said in 260 Oxford Street (at [135]):

In my view, when paragraphs [58]-[59], [115]-[117] and [166]-[166] are read together, as they should be, those paragraphs would allow the Court of Appeal to see why I decided the case as I did.

Further, when paragraph [117] is read alongside paragraph [59], it is clear there was no factual misapprehension. I agree with the plaintiffs’ submission as summarised at [14].

The plaintiffs have sought costs on an indemnity basis. Although in my view the defendants inordinately delayed, I am of the view that the defendants should pay the costs of this application but on the ordinary basis only. However, if it was sought, I would determine those costs on a lump sum basis and order they be paid forthwith.

I would now invite the parties to bring in short minutes reflecting my reasons.