FEDERAL COURT OF AUSTRALIA

Pantzer v Wenkart [2007] FCAFC 27

 APPEALS – application to re-open appeals after final orders have been entered

Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 referred to

DJL v The Central Authority (2000) 201 CLR 226 applied

Bailey v Marinoff (1971) 125 CLR 529 referred to

Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 referred to

Autodesk Inc v Dyason [No 2] (1993) 176 CLR 300 referred to

WARREN PANTZER v THOMAS RICHARD WENKART, ANN SEXTON AND INSPECTOR GENERAL IN BANKRUPTCY

NSD 2457 OF 2005

WARREN PANTZER v THOMAS RICHARD WENKART, ANN SEXTON AND INSPECTOR GENERAL IN BANKRUPTCY

NSD 2459 OF 2005

BLACK CJ, RYAN AND MOORE JJ

13 March 2007

SYDNEY

THE COURT ORDERS THAT:

1.                  The motion on notice is refused.

2.                  The first respondent pay the appellant's costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

1. The motion on notice is refused.

REASONS FOR JUDGMENT

Black CJ

1                     On 28 September 2006, the Court gave judgment in two appeals in which there were challenges to orders made by a judge of this Court setting aside certificates of taxation of costs.  The Full Court allowed each appeal and published its reasons: see Pantzer v Wenkart [2006] FCAFC 140.

2                     Nearly two weeks later, after business hours on 11 October 2006, Dr Wenkart’s solicitors sent a letter to my associate by facsimile requesting that “the Full Court re-list both appeals for the purposes of varying the orders made in each appeal”.  My associate replied by facsimile the following day, noting that Dr Wenkart had not made any application to the Court since judgment had been delivered and suggesting that any such application “should be made in the proper form”.  At that time no application or notice of motion had been filed in the Registry but the solicitor’s letter drew attention to what he considered to be the imminent taking out of the orders.

3                     The orders were in fact entered in both appeals, but this did not occur until 17 October in one case and 19 October in the other, and no application for the stay of entry had been made in the meantime.  It was not until 24 October 2006, after the orders had been entered, that Dr Wenkart filed the present notices of motion seeking to vary them. 

4                     In his written submissions, Dr Wenkart has relied upon the decision of the Full Court in Yevad Products Pty Ltd v Brookfield & Anor (2005) 147 FCR 282 to support his contention that the Court may vary its orders notwithstanding that they have been entered. Yevad stands for no such proposition. It was concerned only with the power of the Court to vary its orders before entry.

5                     In DJL v The Central Authority (2000) 201 CLR 226the High Court held that the Full Court of the Family Court did not have power to re-open final orders after their entry.  The question turned on the terms and structure of the Family Law Act 1975 (Cth) and particularly Pt X.  Although Div 2 “Appellate and related Jurisdiction” of Pt III of the Federal Court of Australia Act 1976 (Cth) differs in some respects from its Family Law Act counterpart, the differences are irrelevant to the existence of a power to re-open.  It is hard to see therefore how, in the face of DJL v The Central Authority,there can be any foundation for the contention that the Full Court of the Federal Court has power to re-open final orders duly entered (see also Bailey v Marinoff (1971) 125 CLR 529).

6                      I should add that although O 35 r 7(2) of the Federal Court Rules makes provision, in limited and specified circumstances, for the variation or setting aside of a judgment or order after it has been entered, the rule is in terms confined to instances in which the Court is not exercising its appellate or related jurisdiction under Div 2 of Pt III of the Federal Court of Australia Act.  I should also note that this is not a case in which the slip rule is applicable: see O 35 r 7(3).

7                     Even if there were power to re-open the orders then it is clear that such a power should only be exercised in exceptional circumstances.  The public interest in finality requires as much: see, albeit in a different context, Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684 (Mason ACJ, Wilson and Brennan JJ); Autodesk Inc v Dyason [No.2] (1993) 176 CLR 300 at 302 (Mason CJ) and 317 (Dawson J).  As the reasons of Ryan and Moore JJ show, no exceptional circumstances are present.

8                     The motions on notice must be refused, with costs.

Associate:

Dated:         13 March 2007

REASONS FOR JUDGMENT

RYAN AND MOORE JJ

9                     On 28 September 2006, we pronounced orders and published reasons in these matters: see Pantzer v Wenkart [2006] FCAFC 140.  Mr Pantzer had sought the following orders in NSD 2457 of 2005:

1.      Appeal allowed.

2.      The judgment of Justice Branson, to the extent that it determined that certificate of taxation dated 13 December 2004 be set aside, be set aside.

3.      The appeal against the decision of the taxing officer in proceeding No. NSD 1973 of 2004 be dismissed.

4.      That the costs order made 6 December 2005 be set aside.

5.      That the First Respondent pay the costs of the proceeding number NSD 1973 of 2004 and of this appeal.

6.      Such further or other order(s) as to the court seems fit.

The orders sought in NSD 2459 of 2005 differed only in the date of the certificate of taxation and the relevant matter number in the Court below.

10                  The orders this Court made on 28 September 2006 in NSD 2457 were:

1. The appeal be allowed.

2. The orders made by the primary judge on 6 December 2005 be set aside and in lieu thereof the appeal against the decision of the taxing officer in proceeding No NSD 1973 of 2004 be dismissed.

3. The first respondent pay the appellant’s costs of the appeal against the decision of the taxing officer in proceeding No NSD 1973 of 2004 and of the appeal to this Full Court, such costs to be taxed in default of agreement.

11                  The orders of this Full Court in NSD 2459 of 2005 also made on 28 September 2006 differed from those set out at [2] above only by referring to the proceeding below numbered NSD 181 of 2005.  The orders made by the primary judge in NSD 1973 of 2004 were:

1.      The Certificate of Taxation dated 13 December 2004 issued by Ann Sexton is set aside.

2.      The bill of costs, the subject of the Certificate of Taxation be remitted to Ann Sexton, the Second Respondent, for taxation in accordance with the reasons for judgment published in these proceedings on 8 November 2005.

3.      The First Respondent to pay 80% of the Applicant's costs.

4.      If within 21 days the First Respondent files an Appeal from this decision, order 2 be stayed until the hearing and determination or other resolution of that appeal.

The orders made by her Honour in NSD 181 of 2005 were in identical terms except for the date of the certificate of taxation in order 1, which was 12 January 2005.

12                  On 11 October 2006 Dr Wenkart wrote to the associate to the presiding judge requesting the re-listing of the appeals for the purpose of varying the orders made in each appeal because they did not take into account either the remaining issues in the proceedings which were still to be resolved by Branson J was reserved or the notices of contention filed by Dr Wenkart in the appeals.  Those notices of contention had been filed on 23 January 2006.  On 12 October 2006 the Court indicated any application should be made in accordance with the Federal Court Rules.  On 19 and 17 October 2006 respectively the orders of this Full Court were entered.

13                  On 24 October 2006 Dr Wenkart filed a notice of motion in each of the appeals by which he sought leave to re-open the appeals.  The notices of motion were in identical terms and raised three issues.  First, Dr Wenkart moved the Court to give reasons in relation to the notices of contention filed on 23 January 2006.  Secondly, Dr Wenkart moved the Court that the orders be varied, leaving Branson J to decide the appeals against the taxation of costs in accordance with the reasons of the Full Court.  Thirdly, Dr Wenkart sought that the costs orders be varied.  In his submissions on the notices of motion, Dr Wenkart contended that the Court should vacate the costs orders and substitute in respect of each appeal an order for payment of 80% of the appellant's costs which, it was said, would reflect the Court's observation during the hearing of the appeals that the costs of Mr Pantzer abandoning his challenge to jurisdiction had been reserved and would be dealt with by the Court at a later time. 

14                  By the notices of motion, Dr Wenkart sought that the orders be varied in the following terms (text which has been struck through represents proposed deletions and underlined text his proposed additions):

(a) Order 2 – the Orders made by the Primary Judge on 6 December 2005 be set aside and in lieu thereof the appeal against the decision of the taxing officer in proceedings NSD181 of 2005 be dismissed and the matter otherwise be remitted to the Trial Judge for further consideration in accordance with these reasons.

(b) Order 3 – the First Respondent pay the Appellant's costs of the appeal against the decision of the taxing officer in proceeding number NSD181 of 2005 and of the Appeal to this Full Court, such costs to be taxed in default of agreement.

(c) Order 4 – The Appellants costs of the Appeal against the decision of the Taxing Officer in Proceeding number NSD1973 of 2004 be in the discretion of the Trial Judge.

15                  The notice of contention in NSD 2459 of 2005 contained the following grounds:

1.      The trial judge ought to have held that there was no evidence before the Court which established that the work for which the taxation was performed was work performed in relation to the administration of the estate as an additional basis to reject the Appellant's claim.

2.      The trial judge ought to have held that the legal firm, Sally Nash & Co, was never retained by the Appellant in his capacity as Trustee of the Bankrupt Estate of the First Respondent as an additional basis to reject in its entirely the Appellant's claim in relation to costs and disbursements.

3.      The trial judge ought to have held that upon the true construction of subsection 167(7) of the Bankruptcy Act, that section operates to preclude any bill of costs submitted after 21 November 2003 as an additional basis to reject the Appellant's claim.

4.      The trial judge ought to have held that the operation of sub-section 167(1) of the Bankruptcy Act 1966, in the circumstances, limits a bill of costs to a bill of costs which was provided by a person in relation to the administration of the Estate was an additional basis to reject the Appellant's claim.

5.      The trial judge erred in finding that the bill of costs submitted by the Appellant complied with sub-regulation 8.10(1) of the Bankruptcy Regulations 1996.

16                  The grounds in each notice of contention were the same, except that the notice of contention in NSD 2457 of 2005 contained this additional ground:

The trial judge erred in finding that the claims made by the Appellant extended to the performance by another person of the ordinary duties required of the Appellant (for example Mr Piscopo) notwithstanding subsection 162(6) of the Bankruptcy Act 1996 precluding such a claim.

17                  Dr Wenkart submitted that it is permissible for a party to request the delivery of undelivered reasons from an intermediate appellate court without seeking from the High Court leave to appeal: Yevad Products Pty Ltd v Brookfield (2005) 147 FCR 282 and that this can be done even after the orders of the Court have been entered. 

18                  Mr Pantzer submitted that this Court's orders of 28 September 2006 constituted a full and complete determination of the issues canvassed in the appeals.  The appellant noted that the orders have been entered, that there has been no application for a stay of the orders and that neither the second nor third respondents have applied to re-open the appeals.  He noted that there had been no cross appeal by Dr Wenkart and that Dr Wenkart has filed an application for special leave to appeal to the High Court from the orders of this Full Court.  At the time the submission was made, that application for leave had not been determined.  Noting that no summary of argument had yet been filed or served in the High Court, Mr Pantzer submitted that, in those circumstances, any reconsideration of the issues like that sought by Dr Wenkart in the application to reopen could be dealt with by the High Court on the, then, pending application for special leave.

19                  Mr Pantzer submitted that the orders sought by Dr Wenkart would fail to reflect that the proceedings before this Court had been appeals from final determinations of "appeals" from determinations of the taxing officer and that each appeal had dealt only with the primary judge's reasoning on questions of law raised by the matters before her.  He submitted that the proceedings which are part heard before Branson J (No 7051 of 2002) were not the subject of any part of either appeal.  He contended it would be futile to remit the proceedings to the primary judge for final determination as her Honour had already made final determinations of the issues raised by the appeals.  Mr Pantzer submitted that any ancillary matters incidental to proceedings No 7051 of 2002 had been expressly reserved by her Honour for future consideration in those proceedings and were not dealt with or affected by the orders of this Full Court.  Mr Pantzer also noted that the certificates of taxation had arisen from consent orders made by Lindgren J on 21 October 2003 which had never been stayed or varied.

20                  The ground set out at [16] above was abandoned during the hearing of the appeal because it was not an argument in support of the primary judgment and therefore not a contention.  Grounds 3 and 5 in NSD2459 of 2005 (grounds 3 and 6 in NSD2457 of 2005) did not support the primary judgment and were not contentions.  In substance they challenged paragraph 2 of the orders of the primary judge remitting the bill of costs to the taxing officer to be taxed again in light of her Honour's reasons.  If Dr Wenkart had wished to challenge order 2 he should have cross-appealed.  He did not.  The remaining grounds raised in the notices of contention, although not expressly addressed, must be taken to have been rejected.  That necessary implication arises from the following matters:

            (i) No evidence ground

21                  Dr Wenkart contended the primary judge ought to have held, as an additional basis for rejecting the appellant's claim that there was no evidence before the Court which established that the work to which the taxation related had been performed in relation to the administration of the bankrupt estate.  The Full Court rejected this ground because it found (at [44]) that the remuneration, costs, charges and expenses incurred after the annulment of the bankruptcy had been incurred in the administration of the estate.

            (ii) Retention of Sally Nash & Co not in capacity as Trustee

22                  As an additional basis for rejecting in its entirety the appellant's claim in relation to costs and disbursements, Dr Wenkart contended the primary judge ought to have held that Sally Nash & Co had never been retained by Mr Pantzer in his capacity as trustee.  This ground was also rejected because the Court (at [48]) allowed the appeals, restoring the full force of the certificates of taxation  which allowed Mr Pantzer as the former trustee, to claim for bills of costs rendered by Sally Nash & Co for work done on his behalf in relation to court proceedings.

            (iii) Section 167(1) ground

23                  Dr Wenkart contended the primary judge ought to have held that, as an additional basis for rejecting the appellant's claim, in the circumstances of this case, s 167(1) of the Bankruptcy Act 1966 (Cth), confined the bill of costs which a trustee may require to one provided by a person in relation to the administration of the estate.  This was not specifically addressed in written or oral submissions by Dr Wenkart in the appeals.

24                  Insofar as Dr Wenkart can be taken to contend that Mr Pantzer had been precluded from requiring the taxation because the bill of costs had not been in relation to the administration of the estate, this was inconsistent with the Full Court's finding that the remuneration, costs, charges and expenses incurred after the annulment of the bankruptcy had been incurred in the administration of the estate.  Furthermore, the construction for which Dr Wenkart arguedwould entail that the taxing officer had no authority to tax the bills.  That in turn would have required her Honour's order remitting the bill of costs to the taxing officer to be set aside and therefore to that extent, this ground could not be raised by way of contention.

25                  Dr Wenkart has invited us to vary the orders of 28 September 2006, submitting that unless orders 2, 3 and 4 are varied in the form proposed, "there [will exist] an ambiguity in relation to the entitlement of Mr Pantzer to these amounts against the context of the substantive controversy before the learned Trial Judge in proceedings N 7051 of 2002".  Dr Wenkart contended that the essence of the case remaining unresolved by the primary judge is whether Mr Pantzer is entitled to any relief at all having regard to the amount which Dr Wenkart submitted was due to Dr Wenkart at the time Mr Pantzer commenced proceedings. 

26                  Dr Wenkart submitted that if it is Mr Pantzer who owes Dr Wenkart money, a matter which the primary judge has yet to resolve, then the present appeals and the applications for taxation which led to the appeals were unnecessary.  Dr Wenkart submitted that, in these circumstances, the present appeals should never have been brought by Mr Pantzer and they involved Dr Wenkart in unnecessary and significant legal expenses.  He further submitted that these are issues to be dealt with by the trial judge in No 7051 of 2002 and that the facts pertinent to that matter were not before this Court.  The submissions (now advanced by Dr Wenkart) that if Mr Pantzer succeeded in the appeal then the orders should be in the terms now proposed by Dr Wenkart were not made in the course of the hearing of the appeals or in connection with them.  The orders we made, reflect our adjudication of the issues raised in the appeals and the success of the appellant in persuading us that the orders of the primary judge should not stand. 

27                  We do not consider that an intermediate appellate court, like this Full Court, is under the same obligation in formulating its reasons as a trial judge.  The latter is obliged to identify, so as to facilitate an assessment of prospects of an appeal, each finding of fact and each legal ground which has led to his or her conclusion; see eg, Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, esp at 259 and 278-279.

28                  By contrast, an intermediate appellate court is required only to treat expressly those arguments, the acceptance or rejection of which has been essential to its affirming or departing from the decision below.  If a point overlooked or impliedly rejected should have been determinative of the appeal, that can be corrected by a higher or ultimate appellate court.

29                  Lastly, we deal with the question of costs.  Dr Wenkart proposes that the costs orders of 28 September 2006 be adjusted to reflect the abandonment by Mr Pantzer of the jurisdictional argument. Mr Pantzer submitted that, while he accepted he had abandoned the jurisdictional argument at the hearing, it was "taken up or attempted to be taken up" by the Inspector-General in Bankruptcy.  He noted that the Full Court had chosen not to deal with that argument and submitted that, in any event, the jurisdictional argument was "a minimal part of the overall appeal in the way in which it was conducted" and that the costs order should stand.

30                  Mr Pantzer also submitted that the question of jurisdiction raised by the appellant had been withdrawn and was not the subject of the final submissions before the Full Court.  Mr Pantzer submitted that Dr Wenkart had commenced the proceedings at first instance before Branson J and thereby accepted the jurisdiction of the Court to hear and determine the matter. 

31                  We uphold Mr Pantzer's contentions on this aspect.  An unsuccessful party can be ordered to pay the costs of the successful party even if the successful party has lost on one or several issues, or abandoned one or several issues during the litigation.  That is what occurred in these appeals.

32                  The motions on notice are refused with costs.

Associate:

Dated:         13 March 2007