Riva NSW Pty Ltd v Key Nominees Pty Ltd

HIS HONOUR: This judgment addresses a practical issue regarding the Court’s power to enforce its orders arising in exceptional circumstances in which 13 costs orders have been made by NSW courts, including 10 by this Court, all of which have been assessed and the resulting certificates of determination of costs registered as 13 separate judgments in the Local Court. Separate judgments, as explained below, if enforced by a writ for the levy of property require the issue of a separate writ for each separate judgment.

The defendant, by failing to use an available statutory and administrative means to register a single judgment for the certificates instead of 13 separate judgments, created a cumbersome platform for enforcement of costs. If the judgments are to be enforced by conventional means this would give rise to an unwieldy or cumbersome execution.

In the above circumstances, the defendant has sought the assistance of the Court to facilitate execution in the exceptional circumstances. Ultimately, the defendant confined its claim for enforcement by means of the appointment of a receiver to 10 of the 13 orders, the 10 being orders of this Court (the balance being 2 orders of the District Court and 1 order of the Local Court): T 65.41-48.

For reasons which I will explain below, I have determined that, subject to allowing the plaintiffs a brief period to pay the net debt (see below), in the exceptional circumstances of the proceedings, a receiver ought to be appointed. However, the terms of the appointment are not quite as sought as by the defendant. The terms of the appointment are purpose-based to meet the exigencies of the atypical circumstances of the case. The terms will require the defendant in the first instance to fund the costs of the appointment of the receiver.

The first plaintiff (Riva) is or was the trustee of the Cavallino Unit Trust (the Trust). The second plaintiff (Angelo) and the third plaintiff (Gustavo), who has died since the commencement of the proceedings, (the Ferellas) are members of the Ferella Family. Gustavo married Nida Ferella and they were (and Nina still is) the parents of Angelo and Tiziana.

The defendant was the mortgagee of a property in Point Piper (property) which was subsequently sold.

These proceedings arise out of disputes between the parties dating back to events in 2004 and 2005. The events in those years have been the catalyst for considerable ligation in this Court and in other courts.

Details regarding what happened may be gleaned from the Court Book, documents tendered and published cases on NSW Caselaw regarding the parties and other satellite litigation.

On 9 June 2023, two notices of motion were listed before me for hearing.

Mr Wathukarage of counsel appeared for the plaintiffs and Mr Parsons of counsel appeared for the defendant.

On 22 February 2023, Zali Burrows (Ms Burrows), the long-time solicitor on record for the plaintiffs, served on them notices of intention of ceasing to act. On 16 March 2023, Ms Burrows filed a notice of ceasing to act in respect of the plaintiffs. Mr Parsons informed me that the notice of ceasing to act had not been served on the defendant’s solicitor Stuart Graeme McDougall (Mr McDougall). This gave rise to a question as to the entitlement of Riva to continue the proceedings without representation of a solicitor.

In light of Ms Burrows ceasing to act and Gustavo’s death (see below), there were some initial questions regarding the entitlement of Mr Wathukarage to appear on behalf of the plaintiffs. Further, in light of the history of the litigation between the parties (see below) there was a question as to whether these proceedings are a nullity.

Mr Wathukarage applied orally for an adjournment of the notices of motion. The applications heard by me were accordingly as follows:

Although I have listed those applications chronologically, for practical purposes I dealt with them in reverse chronological order as the adjournment application needed to be addressed prior to the other two applications and the effect of the setting aside application would impact upon whether the receiver motion would be heard.

The applications depend upon a number of considerations.

Although the parties have not identified specific issues, in order to address the matter, it is appropriate to identify a number of issues which will inform determination of the applications. They are:

I will address the Enforcement issue by considering a number of matters including addressing:

Considerable time was spent on the receiver application. I will address the receiver application by setting out the respective submissions of the parties, considering the objections to the appointment of a receiver and setting out my determination on the issue.

A notice of ceasing to act is required to be served on a party for whom the solicitor who served a notice currently acts: r 7.29(1) UCPR. In addition, on one view of the rules, it is also required to be served on the other parties in the proceedings: r 7.29(1) UCPR. A notice of ceasing to act has effect as regards the Court upon the filing of the notice: r 7.30(a) UCPR. However, it only has effect as regards any person on whom it is required to be served upon service of a copy of the notice on that person: r 7.30(b).

The effect of Ms Burrows ceasing to act for the plaintiffs gave rise to an issue as to whether Riva was able to be represented in the proceedings by Mr Wathukarage on the instructions of Angelo.

I enquired as to whether Angelo was a director of Riva. I permitted the matter to be briefly stood in the list whilst a company search was obtained. The company search revealed that Angelo is a director of Riva: Exhibit A1; T 6.

A director is entitled to conduct or defend proceedings on behalf of the company as of right, where the director is also the plaintiff in the proceedings, subject only to compliance with the procedural requirements in the rules: r 7.1(2)(a), (3) UCPR: May v Christodoulou (2011) 80 NSWLR 462; [2011] NSWCA 75 at [6] per Handley AJA, [95] per Sackville AJA (Macfarlan JA agreeing).

The procedural requirements require that in the case of a director of a defendant company that there be an affidavit as to his or her authority to act in that capacity together with a copy of the instrument evidencing that authority: r 7.2(1) UCPR. The content of the affidavit in the case of a director of a company within the meaning of the Corporations Act 2001 (Cth) (Corporations Act) is set out in r 7.2(2) UCPR.

Although there was no affidavit, Mr Parsons did not oppose Mr Wathukarage appearing on the adjournment application: T 6.40-49. In the circumstances of the matter where counsel appeared, I determined pursuant to s 14 Civil Procedure Act 2005 (NSW) (CPA) that it was appropriate for the purposes of dealing with the applications to dispense with the requirement for the filing of an affidavit of authority: T 8.13-17.

It appears there has been no issue of any formal grant of probate or administration in relation to Gustavo’s estate.

Where it appears that the deceased person’s estate has an interest in the proceedings, but is not represented in the proceedings, the Court may order that the proceedings continue in the absence of a representative of the deceased person’s estate or may appoint a representative of the deceased person’s estate for the purposes of the proceedings, but only with the consent of the person to be appointed: r 7.10(1)(a)-(2)(a) UCPR.

Consequent upon the death of Gustavo, any proceedings to which he was a party might or would need to be regularised by orders for the representation of his estate in such proceedings.

For the purposes of the applications, subject to any further order of the Court, I ordered pursuant to r 7.10(1)(a) and 2(a) UCPR that the proceedings continue in the absence of a representative of Gustavo’s estate: T 8.17-43.

In July 2004, the Ferellas were registered as proprietors of the property.

As at that time they were trustees of the Trust and seemingly had purchased the property in their capacity as trustees.

The Ferellas borrowed $4.3 million from the defendant and on 20 July 2004, executed a mortgage over the property in favour of the defendant to secure a loan.

The Ferellas claimed that by a deed dated 19 April 2005, Riva became trustee of the Trust replacing them as trustees. In 2008, Nicholas J held that Riva became the new trustee under that deed, but the trust assets have never been vested in it: Agusta Pty Ltd & Ors atf the Cavallino Unit Trust v The Official Trustee in Bankruptcy ato the bankrupt estates of Gustavo Ferella and Angelo Ferella [2008] NSWSC 685; (2008) 6 ABC (NS) 164 (Agusta Pty Ltd v Official Trustee in Bankruptcy) at [34] (a conclusion that did not appear to be ultimately disputed on appeal: Agusta Pty Ltd v Official Trustee in Bankruptcy as Trustee of Estates of Ferella [2009] NSWCA 129 at [49]-[50]).

On or about 14 October 2005, the Ferellas were each made bankrupt, and the Official Trustee became their trustee in bankruptcy (OTB).

On or about 27 October 2005, there was default in payments in respect of the mortgage.

On 31 January 2006, the defendant obtained an order for possession of the property.

By deed of 9 February 2006, Riva resigned as trustee of the Trust and Agusta Pty Ltd (Agusta) was purportedly appointed as trustee of the Trust. However, in the hearing before Nicholas J, the claim that Agusta was appointed as trustee of the Trust was not pressed in a context in which it was accepted that the bankruptcy of the Ferallas operated to vest the rights and powers attached to their units in the Trust in the OTB so that they became unable to vote for, or to otherwise approve, a change to Agusta under provisions of the trust deed: Agusta Pty Ltd v Official Trustee in Bankruptcy at [23].

Between about 13 to 15 March 2006, the defendant took possession and arranged an auction to sell the property.

On or about 11 April 2006, the defendant as mortgagee sold the property for $7.95 million. On or about 1 June 2006, the sale was completed and the proceeds in part dispersed.

On or about 3 December 2008, the Ferellas were discharged from bankruptcy.

On 17 December 2009, the Ferellas together with Agusta (which then claimed to be the trustee of the Trust) commenced proceedings against the defendant (2009 proceedings). Those proceedings were listed for a final hearing in May 2011, when Riva applied for an adjournment. The adjournment was refused by Windeyer AJ and the proceedings dismissed, in a context in which the plaintiff offered no evidence and had not appeared at the hearing after the adjournment was refused: CB 213. Whilst a notice of intention to appeal from the decision was filed, no actual notice of appeal was lodged.

In 2012, Riva (as first plaintiff), Angelo and Gustavo (as second plaintiff) and Agusta (as third plaintiff) commenced further proceedings against the defendant and Chris Stomo (Mr Stomo) (as second defendant) (2012 proceedings).

The defendant filed a notice of motion seeking that a statement of claim filed on 13 September 2013 be struck out. Mr Stomo was not a party to the notice of motion.

On 20 December 2013, Young AJ (as his Honour then was) ordered that the statement of claim be struck out, gave liberty to the plaintiffs to replead by 4 March 2014 and stood the matter over to that date: Riva NSW Pty Limited v Key Nominees Pty Limited [2013] NSWSC 1952.

On 4 March 2014, Young AJ made an order that the proceedings be dismissed with costs and that no fresh proceedings be commenced by the plaintiff on the same causes of action without the leave of the Court, such leave to be obtained prior to the commencement of any fresh proceedings. However, his Honour stayed those orders until 11 March 2014 and indicated that further submissions would be received as to why those orders should be entered or not be discharged: In the matter of Riva NSW Proprietary Limited [2016] NSWSC 1954 (Brereton J decision) at [4] per Brereton J (as his Honour then was); CB 213-214.

On 21 March 2014, in two separate decisions, Young AJA (as his Honour then was) made orders in relation to the plaintiffs' claims against the defendant and Mr Stomo (2014 orders): Riva NSW Pty Ltd ACN 113 881 815 v Key Nominees Pty Ltd [2014] NSWSC 301; Riva NSW Pty Ltd ACN 113 881 815 v Key Nominees Pty Ltd & Chris Stomo [2014] NSWSC 389.

In the Brereton J decision, Brereton J (as his Honour then was) noted that the 2014 orders provide that no fresh proceedings are to be commenced by the plaintiffs on the same causes of action without the leave of the Court and that that leave is to be obtained prior to commencement of any fresh proceedings: Brereton J decision at [4]; CB 214. Thus, the effect of the 2014 orders which was to preclude the plaintiffs from commencing proceedings concerning the 2006 mortgage sale other than by leave of the Court.

On 7 November 2014, an application for leave to appeal to the Court of Appeal by each of the plaintiffs was dismissed: Riva NSW Pty Ltd v Key Nominees Pty Ltd [2014] NSWCA 381.

The jurisdiction exercised by Young AJA to make such “no commencement without leave” orders is not expressly referred to in his Honour’s judgments.

From time to time a court may consider placing limitations upon a party seeking relief in proceedings.

There is a well-recognised inherent jurisdiction (at least in the High Court and Supreme Court) by which a court may restrain a litigant from making unwarranted and vexatious applications in pending proceedings: see GR v Secretary, Department of Communities and Justice [2020] NSWSC 892 at [16] per Lindsay J citing Commonwealth Trading Bank v Inglis (1974) 131 CLR 311; [1974] HCA 17 (Inglis) at 318-320 per Barwick CJ, McTiernan J (Walsh J died before judgment was delivered) (see also Jones v Skyring [1992] HCA 39; (1992) 109 ALR 303 at 311 per Toohey J; Martin v Attorney-General (NSW) [2014] NSWCA 189).

However, it has been said that there is no inherent jurisdiction to restrain a person from commencing new proceedings without leave of the Court: Inglis at 313-319.

For any such order to be made resort is generally had to statutory provisions. In New South Wales, under the provisions of s 84 Supreme Court Act 1970 (NSW) (SCA), the Court, until 2008, on an application made by the Attorney General, if satisfied that any person has habitually and persistently and without any reasonable ground instituted vexatious legal proceedings, order that the litigant should not, without leave of the Court, institute any legal proceedings in any court and that any legal proceedings instituted by him in any court before the making of the order shall not be continued by him without leave of the Court: s 84(1).

In 2008, consequent upon the passing and commencement of the Vexatious Proceedings Act 2008 (NSW), s 84 SCA was repealed.

The question regarding Young AJA’s power to make the order was averted to by Stevenson J in Riva NSW Pty Ltd v Key Nominees Pty Ltd [2016] NSWSC 1569 (Stevenson J decision). His Honour noted that there was no dispute before his Honour about Young AJA’s power to make the order, whether under s 86 or s 91 of the CPA or under the Court’s inherent jurisdiction: at [30].

Under the CPA the Court has statutory power to make orders on terms, which is taken to be a power to make orders on such terms and conditions as the Court thinks fit: ss 86(1)(b), 86(2). Such an order may be made by the Court of its own motion: s 86(3). Further, the Court may dismiss proceedings. Ordinarily, a dismissal does not, subject to the terms on which any order for dismissal was made, prevent a plaintiff from bringing fresh proceedings or claiming the same relief in fresh proceedings: s 91(1) CPA. The terms of s 91(1) CPA are apt to permit a dismissal on terms which prevent the plaintiff from bringing fresh proceedings. It is certainly not uncommon for courts dealing with applications for dismissals (without a hearing on the merits) or discontinuance of proceedings to craft terms which either preclude further proceedings being brought or provide that the discontinuance be a defence to subsequent proceedings for the same or substantially the same cause of action: e.g. Botany Municipal Council v Secretary, Department of Arts, Sport, Environment, Tourism and Territories (1992) 34 FCR 412 at 417 per Gummow J (as his Honour then was).

I will proceed on the basis that Young AJA’s power to make the order was supportable at least on a statutory basis pursuant to s 86 or s 91 of the CPA.

On 1 May 2015, the plaintiffs commenced yet further proceedings (2015 proceedings). Those proceedings were dismissed by Darke J on the basis that they had been instituted without leave. On 9 December 2015, the Court of Appeal (Leeming JA and Emmett AJA) dismissed an application for leave to appeal against Darke J’s decision.

On 6 October 2015, the defendant served on Riva a creditor’s statutory demand: Brereton J decision at [7].

On 23 October 2015, Riva applied pursuant to s 459G Corporations Act to set aside the creditor’s statutory demand: Brereton J decision at [8].

On 27 May 2016, Brereton J, prior to dealing with the application to set aside the creditor’s statutory demand, addressed a matter arising out of the issue of a subpoena by Riva to the solicitors for the defendant for production of documents which would evidence the application of the sum held upon the completion of the sale. The defendant sought to set aside the subpoena on the basis that it sought to elicit evidence in aid of establishing an off-setting claim which, it was said, was not maintainable by reason of the orders of Young AJ: Brereton J decision at [8]-[11].

Three grounds were advanced. The third ground being that there was an off-setting claim for $75,000 being a sum withheld from the proceeds of the mortgagee sale of the property together with interest thereon. Brereton J made a number of observations regarding the off-setting claims. His Honour noted that:

Importantly, Brereton J expressly observed that his Honour was (then) not determining whether the off-setting claim is viable or arguable or even genuine, but only with whether it is precluded – or whether its propounding in those proceedings is precluded by the orders made by Young AJ: Brereton J decision at [12]. Brereton J on that occasion (27 May 2016) adjourned the proceedings to 27 June 2016.

On 27 June 2016 orders were made by consent before Brereton J setting aside the creditor’s statutory demand and ordering the defendant to pay Riva’s costs: CB 220.

On 26 July 2016, orders were made in the Federal Circuit Court setting aside bankruptcy notices in separate proceedings issued to respectively Gustavo and Angelo: CB 221.

On 19 September 2016, the plaintiffs commenced further proceedings seeking leave to claim relief concerning the 2006 mortgage sale (2016 proceedings).

On 26 October 2016, the summons was heard before Stevenson J.

On 7 November 2016, his Honour delivered reasons for judgment determining that leave should be allowed to commence proceedings but only on terms that the plaintiffs pay all outstanding cost orders and provide security for the defendant’s costs of the proposed proceedings. The relevant litigation history in the matter is in part set out in the judgment of Stevenson J delivered on 7 November 2016: Stevenson J decision.

On 30 November 2016, Stevenson J delivered further brief reasons addressing costs of the application heard by him: Riva NSW Pty Ltd v Key Nominees Pty Ltd (No 2) (Supreme Court (NSW), Stevenson J, 30 November 2016, unrep); CB 23-26.

His Honour, in delivering reasons, in part noted that there was a question as to whether the plaintiffs should be entitled to set-off cost orders made in the defendant’s favour against cost orders made in the plaintiffs’ favour in proceedings other than those referred to in the Stevenson J decision. His Honour noted that he did not intend that consequence and did not propose to allow any such set-off: at [6]; CB 24. His Honour directed the plaintiffs to bring in short minutes of order to give effect to his Honour’s 7 and 30 November 2016 reasons.

Between 30 November 2016 and 11 December 2017, it is not entirely clear what occurred. It is unexplained on the evidence. It is curious because it is unusual that it should have taken the parties 13 months to agree on short minutes of order to give effect to reasons for judgment.

On 11 December 2017, Stevenson J made orders in chambers (2017 orders).

There was debate on the hearing regarding the character of the orders. Mr Parsons indicated that they were consent orders. He submitted that the orders had been made in chambers in accordance with short minutes of order – which is correct: CB 32. However, the orders made by Stevenson J are not actually described as consent orders although the short minutes of order which are referenced in the orders of the Court (CB 32) are described as orders “BY CONSENT” (CB 35), albeit that they are not signed by the plaintiffs or anyone on their behalf. I queried whether the orders were not consent orders per se but simply orders giving effect to reasons for judgment. Mr Parsons submitted that the fact that Stevenson J was as at 30 November 2016 not inclined to permit costs orders in favour of the plaintiffs to be set-off against costs orders made in favour of the defendants, and yet the final form of the orders did permit that, is evidence that the orders were made by consent: T 51.18-53.29.

I am minded to think that the fact that the annexed short minutes of order are described as being “BY CONSENT” and the fact that the 2017 orders do permit a set-off of costs orders is suggestive that the 2017 orders are in fact a combination of orders both giving effect to the reasons for judgment of Stevenson J and consent orders.

The orders bear some significance in the proceedings and, accordingly, I set them out in detail.

Relevantly, the orders in summary provided as follows:

It is appropriate at this stage to make some observations regarding the 10 cost orders. Of the costs orders:

Although 6 of the costs orders were specified as being assessed in a specific amount, it appears from other evidence that those assessed costs were not at that stage registered as a judgment in either the Supreme Court or Local Court. One minor anomaly in the matter is that of the 6 costs orders specified as being assessed in a specific amount, whilst 4 of the amounts specified in the 2017 orders corresponded with the amounts registered in the Local Court as judgments, there is in the other 2 amounts which were specified a discrepancy between the specified figures and the amounts ultimately registered as judgments in the Local Court. Those two discrepancies related to orders of the District Court and in the circumstances, it is not necessary for me to explore the reason for or the relevance of those discrepancies as those two orders are not sought to be enforced by means of the appointment of a receiver.

On 2 March 2018, yet again the plaintiffs commenced further proceedings with the filing of a statement of claim in these proceedings.

On 5 June 2018, the defendant filed a notice of motion seeking to have the statement of claim struck out pursuant to r 14.28(1)(c) UCPR (strike out motion).

On 19 June 2018, the proceedings were listed before Parker J to address the strike out motion. Parker J listed the strike out motion for hearing before the Applications List Judge on 3 August 2018.

On or about 27 July 2018, the defendant filed a further notice of motion seeking an order reviewing the decision of Registrar Bellach as Manager, Costs Assessment made on 4 July 2018 and seeking to have orders made by the Registrar set aside (review motion).

On 2 August 2018, the plaintiffs filed a notice of motion seeking a variation of order 4 of the orders made by Stevenson J on 11 December 2017 to permit the plaintiffs a further period of 30 days to pay costs found to be due to the defendant with that further period to expire within 30 days of the issue of a determination of costs by the costs review panel and confirmation of that determination by the Manager, Costs Assessment in respect of the 2009 proceedings costs (variation motion).

The variation motion was, according to its terms, purportedly filed in the 2016 proceedings.

On 3 August 2018, the proceedings came before Slattery J. It appears by that stage that all of the costs orders the subject of the 10 particular costs orders had been assessed (or, in the case of the Local Court proceedings costs, otherwise quantified).

On that hearing, there was some debate about whether a determination had been made in respect of the 2009 proceedings costs. It seems the plaintiffs asserted that they had not received a certificate. The defendant asserted that on 18 December 2017, a costs assessment was issued by a costs assessor and sent to the Manager, Costs Assessment. The certificate was then sent by the Manager to the parties on 7 February 2018.

The transcript reveals that his Honour accepted that the certificates had been sent to the parties, rejecting a contention that the 2009 proceedings costs assessment had not been received by the plaintiffs: T 3-8.

Slattery J construed the 2017 orders as requiring the plaintiffs to comply with orders 2A(i)-(x) in order to proceed but the proceedings being permanently stayed if the plaintiff did not comply with order 2A(x): T 19-31. Specifically, his Honour construed order 4 as being operative irrespective of the set-off in the later orders: T 19-22.

Mr Newton made some assertion regarding the plaintiffs being wrongfooted because of an administrative error by the assessor and the “office of the costs assessment”. Slattery J indicated that that had not been proved: T 9-10.

Slattery J observed that there “has to be an end to these things” and noted that the orders were very serious orders and in the absence of showing any defects in the service of the 2009 proceedings certificate considered that the 2016 proceedings were permanently stayed.

In the above context, Mr Parsons for the defendant moved on the strike out motion. He made it clear that the basis for the strike out was that the proceedings were an abuse of process in light of the permanent stay imposed on the 2016 proceedings: T 11.

Notwithstanding that the variation motion had purportedly been filed in the 2016 proceedings, Slattery J permitted Mr Newton to proceed on the variation motion. His Honour read the evidence in respect of both the strike out motion and the variation motion.

His Honour dismissed the variation motion. His Honour made orders on the strike out motion striking out the statement of claim.

The formal orders made were:

It is unclear what, if anything, happened to the review motion.

On 2 November 2018, the plaintiffs filed a notice of appeal and on 16 January 2019, the plaintiffs filed a summons for leave to appeal (appeals).

On 12 April 2019, the appeals were heard by the Court of Appeal constituted by Leeming and Payne JJA.

Their Honours noted, allowing for the setting-off under the 2017 orders, that approximately $80,000 was required to be paid under the regime of orders made by Stevenson J on 11 December 2017. At that stage, it was common ground that the plaintiffs had taken no steps to pay any amount to the defendant.

The Court dismissed the summons for leave to appeal and the notice of appeal each with costs.

What has happened in the proceedings between 12 April 2019 and 14 February 2023 is not immediately evident from the Court file. However, broadly speaking, the languishing of the proceedings over that period appears to be explained by four matters.

First, by the time of the dismissal on 12 April 2019 of the application for leave to appeal in these proceedings, a total of 13 costs orders had been ordered in favour of the defendant against the plaintiffs. Mr McDougall provided a schedule with a number of columns referring to each of the costs orders, the proceedings in which each was made, the date of commencement of the proceedings, the date of the costs order, the costs certificate registration date and the amount of the costs judgment (Certificate schedule): CB 56. The Certificate schedule is annexed to these reasons for judgment as Annexure A. Leaving aside the Local Court costs order, in relation to the remaining 12 cost orders (9 of which were referred to in the 2017 orders and the remaining 3 arising out of these proceedings) cost certificates were registered in the Local Court on 20 November 2019. I infer that some period of time approaching six months was taken in the process of attempting to quantify any costs that had not been assessed by that stage and to register the certificates in respect of the assessed costs.

Secondly, on 26 January 2020, Gustavo died. Gustavo was the former registered proprietor of various properties at Blacktown, Box Hill and The Entrance North. Nida, by reason of the lodging of a notice of death, has become the sole registered proprietor of those properties. It appears that the defendant has applied for administration of Gustavo’s estate and proposes to serve the application on Nida in due course.

Thirdly, there was proliferation of litigation as between Riva and Fraser Clancy Lawyers (FCL) on the one hand and Riva and the OTB on the other hand. FCL have been in contention with Riva for 10 years over unpaid legal fees.

On 24 July 2019, Wilson SC DCJ made orders requiring Riva, Angelo and Tiziana (described as a director of Riva) to pay costs of solicitors trading as FCL and in addition made certain other directions which were seemingly directed to alleged conduct of Angelo, Tiziana and certain legal practitioners (conduct directions).

Riva appealed that decision, and, on 7 September 2020, the Court of Appeal set aside the conduct directions made by Wilson SC DCJ but otherwise dismissed a summons for judicial review: Riva NSW Pty Ltd v Mark A Fraser & Christopher P Clancy t/as Fraser Clancy Lawyers [2020] NSWCA 210.

Between September 2019 and November 2022, there have been other proceedings in this Court between Riva and FCL – which have resulted in at least four judgments of Slattery J (Riva NSW Pty Ltd v Mark A Fraser; Fraser v Riva (NSW) [2019] NSWSC 1310, Riva NSW Pty Limited v Mark A Fraser; Fraser v Riva (NSW) (No 2) [2020] NSWSC 1162, Riva NSW Pty Ltd v Fraser; Fraser v Riva (NSW) (No 3) [2020] NSWSC 1472 and Riva NSW Pty Ltd v MA Fraser; Fraser v Riva (NSW) (No 4) [2022] NSWSC 1624).

Fourthly, in 2020, Riva commenced proceedings against the OTB and, in 2021, the OTB commenced proceedings against Angelo (OTB proceedings).

On 31 January 2022, the OTB proceedings were heard by Kunc J.

On 22 February 2022, his Honour delivered reasons for judgment making various orders including staying certain proceedings and making prohibition orders: Riva NSW Pty Limited v The Official Trustee in Bankruptcy; The Official Trustee in Bankruptcy v Ferella [2022] NSWSC 153.

The receiver motion is supported by the following material:

Mr McDougall deposes that since the judgment of the Court of Appeal on 12 April 2019, the plaintiffs have not paid any monies referable to the costs assessed as at the time of 2017 orders nor in respect of the subsequent certificates of determination of costs issued after that date.

On 20 March 2023, the receiver motion was listed before Senior Deputy Registrar Hedge.

On the morning prior to that listing, Angelo sent an email to the Equity Registrar’s shared mailbox copied to the solicitors for the defendant noting that counsel for the plaintiffs, Adrian Maroya (Mr Maroya), was on leave. Other matters were asserted in the email and ultimately the email concluded requesting a 4-week adjournment so that on counsel’s return he could consider materials and advise regarding steps including the plaintiffs filing “its [sic] own Motion in reply”: CB 136-137.

There was no appearance for the plaintiffs in Court on the listing.

The Registrar noted that the defendant as applicant had filed and served all its evidence in respect of the matter and made orders:

Later, on 20 March 2023, Senior Deputy Registrar Hedge responded to Angelo’s email noting that there had been contact between the respective counsel and outlining the orders made.

On 20 April 2023, the matter was listed before Registrar Walton. Mr Parsons appeared for the defendant. There was no appearance for the plaintiffs. The Registrar listed the notice of motion for hearing before the Applications List Judge on 9 June 2023 at 10 AM with an estimate of two hours and indicated that the defendant and the Court were to notify the plaintiffs of the orders.

Mr Wathukarage also moved on the setting aside motion: T 7. Mr Parsons did not oppose him doing that: T 8.8-.11. My dispensation order also applied in relation to Mr Wathukarage appearing in relation to the setting aside motion: T 8.13-.17.

Angelo also caused to be filed with the setting aside motion an affidavit of himself. In substance, the affidavit deposes to communications with Mr Maroya with regard to directions to appear on 20 April 2023. The affidavit is suggestive that Mr Maroya forgot to attend the listing: CB 191-196. The asserted reasons for wishing to set aside the orders, in particular, the hearing of the receiver motion, is said to be (at CB 192[9]):

On 22 May 2023, Mr McDougall affirmed an affidavit addressing notification to the plaintiffs in respect of the orders made on 20 March 2023 and 20 April 2023 (which last mentioned order was notified to the plaintiffs on 24 April 2023).

The affidavit additionally updated calculations of amounts said to be due asserting that there was a net sum due from the plaintiffs to the defendant of $283,745.15. The schedule lists 13 cost orders including the 10 costs orders the subject of the 2017 orders and 3 additional cost orders being the costs order by Slattery J on 3 August 2018 of the two notices of motion referable to these proceedings and the 2016 proceedings and the costs of the 2019 Court of Appeal proceedings. Those costs collectively, including interest, total $429,436.91. The schedule then deducts set-off in respect of the three set-off amounts the subject of the 2017 orders totalling $145,691.76. The difference between those two figures is the claimed net sum due of $283,745.15.

On 28 May 2023, Angelo swore an affidavit effectively responding to the receiver motion. The affidavit:

The alleged off-setting cost orders are said to be:

The Brereton J decision does not deal with dismissal of the purported statutory demand proceedings but in fact deals with the defendant’s notice of motion which sought to set aside a subpoena for production of documents (see [11] of the Brereton J decision). Nonetheless, the judgment delivered on 27 May 2016 relevantly adjourned the proceedings to 27 June 2016. In his affidavit, Angelo annexes an email from Mr Newton to Ms Burrows stating that Mr Newton had appeared before Brereton J on 27 June 2016 and Mr Parsons had appeared for the defendant and that the statutory demand was ordered to be set aside with the defendant ordered to pay Riva’s costs.

Those two costs orders are in fact two of the three set-off amounts referable to the 2017 orders.

The alleged other matter which Angelo submits the Court ought to take into account is what is described as being the allegedly fraudulent drawing down of the sum of $100,000 retained in trust on 1 June 2006 until depleted, without notice or consent of Court or the consent of the plaintiffs (who are alleged to be the beneficiaries of those funds).

However, there is evidence that that sum of $100,000 is in fact incorporated in the third set-off sum of $116,217.59 referred to in the 2017 orders.

Mr McDougall affirmed an affidavit on 2 June 2023. The affidavit responds to Angelo’s affidavit of 28 May 2023 in substance by indicating that the three set-off amounts identified by Angelo (being the costs referable to the Corporations List proceedings, the Federal Circuit Court proceedings and the security amount (of $100,000)) each with interest accrued up to and including 9 June 2023 total a sum of $190,285.89 leaving a balance due from the plaintiffs to the defendant of $239,151.02.

Mr Wathukarage applied for an adjournment: T 1, 7. He had been given material the prior day. He also understood that if the Court refused an adjournment he may have to deal with the substantive motion and he was ready to do that: T 4.

Mr Wathukarage read evidence on the motion, and I dealt with objections: T 8.45-13.6.

Mr Wathukarage indicated that the purpose of the adjournment which was sought was to enable the filing of a cross-summons to establish that there was a “genuine set-off” in relation to the “underlying debt”: T 13. In this regard Mr Wathukarage directed my attention to the Brereton J decision: CB 217-218. When I asked the nature of the set-off, Mr Wathukarage indicated that it arose out of the claim in respect of the security deposit held by the defendant since 2006: T 13. He initially indicated that the plaintiffs sought to put a counterclaim that the “underlying debt” was not owed: T 14.10-.13. When I explored with him what was the “underlying debt”, he accepted that for the purposes of the receiver motion the underlying debt arose from the costs judgments. When I indicated that the underlying basis of the costs judgment was the power of the Court to make cost orders, Mr Wathukarage agreed with that: T 14.

Mr Wathukarage directed my attention to the Security Amount set-off: CB 33. He indicated that his instructions were that that amount arose from a breach of contract and that there was dispute regarding the calculation of interest on it: T 15.10-.24. When I asked what the breach of contract was Mr Wathukarage indicated he did not have particulars of that. Mr Wathukarage accepted that the Security Amount set-off arose fairly and squarely within the same cause of action which the plaintiffs were precluded from pursuing without leave because it arose out of the mortgagee sale: T 15.26-16.50.

Mr Wathukarage also indicated that he was instructed (without being provided with particulars) that there is an equitable claim of lost opportunity arising from the alleged breach of contract. Leaving aside the question of the juristic basis of an equitable claim for lost opportunity (as to which I expressed doubt), it seemed to me that insofar as such a claim was also based on the alleged breach of contract it arose out of the same events as covered by the orders of Young AJA precluding any proceedings without leave: T 17.1-.19.

Mr Wathukarage also submitted that there was prejudice in Mr Maroya not being able to appear: T 17.26-18.1. However, it seemed to me that the plaintiff had sufficient time to prepare for dealing with the receiver motion. The receiver motion was filed and served approximately four months prior to listing before me. Further, the email correspondence between Angelo and Mr Maroya on 17 April 2023 indicated Angelo was seeking an adjournment of 6 weeks in order to put on any cross-claim evidentiary material. By dint of the timing of the listing of the matter before me, Angelo had a period of 6 weeks in order to put materials together prior to the listing before me. He in fact prepared several affidavits which were foreshadowed as being relied upon and which were ready for use on the listing of the receiver motion before me. However, examination of the affidavits revealed that the nature of the claims proposed to be the subject of any cross-summons, arose out of the 2006 mortgagee sale. Such claims would not be permitted without leave and were, in part also the subject of set-offs under the 2017 orders (which I address below): T 18.4-19.7. Mr Wathukarage also frankly accepted that there is nothing else that could have been argued on the plaintiffs’ behalf: T 19.9-.27.

For the above reasons, I dismissed the application for adjournment: T 19.39-40.

Relevantly, the Registrar is an officer of the Court for the purposes of s 121 SCA: s 121(1).

An order made or direction given by the Registrar may be set aside or varied by the Court: s 121(3).

A direction or order or decision of the Registrar, subject to certain exceptions that do not apply in this case, may, on the application of any party, be reviewed by the Court and the Court is able to make such order by way of confirmation, variation discharge or otherwise as the Court thinks fit: r 49.19(1) UCPR.

The power is discretionary: see e.g. Z v Mental Health Review Tribunal (No 2) [2022] NSWCA 131 at [51]-[52] per Kirk JA.

It is not necessary for the applicant to demonstrate that there has been a material error in the Registrar’s order under review: e.g. Tomko v Palasty (No 2) (2008) 71 NSWLR 61; [2007] NSWCA 369.

There is an explanation given for why there was no attendance, being the fact that counsel briefed (Mr Maroya) forgot to attend: CB 191-192[3]-[8], 193-196.

Had the only consideration been the failure of counsel to attend on the 20 April 2023 listing, I may have been minded to grant an adjournment.

However, as I have explained in relation to the adjournment application, there are a few compelling considerations against setting aside the orders.

First, the plaintiffs had sufficient time to prepare for the receiver motion being 4 months since it was filed and 6 weeks since the motion was listed for hearing. They in fact prepared affidavits which were relied upon in respect of the adjournment, the setting aside motion and also the receiver motion.

Secondly, the nature of the cross-summons was explained by Mr Wathukarage and raises matters which are subject to the requirements for leave to commence proceedings. However, separately and in any event, the matters claimed to be the subject of the cross-summons are the set-off amounts under paragraphs 5-7 of the 2017 orders.

Thirdly, the plaintiff appeared on the application by counsel who, while he only had limited time to prepare, presented the application capably.

I was not satisfied that there is utility in setting aside the order and I declined to do so. I dismissed the setting aside motion. Mr Wathukarage accepted that there was no reason why the costs of the motion should not simply follow the event and so I ordered that the plaintiffs pay the defendant’s costs of the setting aside motion: T 20.21-.41.

I raised with counsel the question of the status of these proceedings, in light of the orders of Slattery J and the decision of the Court of Appeal.

In particular, I asked Mr Parsons whether it was an abuse of process to file a notice of motion, seeking to enforce costs orders referable to either proceedings and seeking the appointment of a receiver, in proceedings for which no leave had been given to commence, and in which the defendant (by Mr Parsons) had contended before Slattery J that such proceedings were an abuse of process: T 29.35-30.15.

Mr Parsons, whilst accepting that the proceedings were liable to being dismissed, did not accept that they were an abuse of process: T 29.23-30.12.

There is a question as to whether these proceedings are a nullity or merely liable to be dismissed or stayed. I formed the view that these proceedings are not a nullity but are liable to being dismissed for failure to obtain leave.

Order 2 of the 2017 orders provided that the 2016 proceedings were stayed pending the plaintiffs satisfying two conditions, namely:

There was no time frame specified for the giving of security of costs.

In absence of an order under r 36.5 UCPR, there is no requirement per se for the plaintiffs to give security for costs within a specified time.

An order which requires a person to do an act but does not specify a time is not ineffectual, but until the time is fixed by a subsequent order is unenforceable (at least by committal or sequestration): Wyszynski v Bill [2005] NSWSC 110 at [45] per White J (as his Honour then was); Kayserian Nominees (No 1) Pty Ltd v JR Garner Pty Ltd [2008] NSWSC 1011 at [4] per Brereton J (as his Honour then was); Qu v Kuang [2008] NSWSC 991 at [9] per Brereton J (as his Honour then was).

Notwithstanding the absence of a specified time, non-compliance with the orders will mean that the proceedings continued to be stayed (until and unless the conditions are satisfied).

There is a further aspect to the orders made by Stevenson J that must be addressed.

Order 4 was in the following terms (emphasis added):

According to Exhibit SGM-16 (page 89), when understood in tandem with the schedule on page 42, that certificate was registered and issued on 20 November 2019.

Accordingly, as a matter of construction of the 2017 orders, if the plaintiffs had not paid the costs orders and provided security for costs within 30 days of 20 November 2019, the proceedings were permanently stayed after the last day for compliance with that order.

Given that the costs orders have not yet been paid, I am of the view that the 2016 proceedings have been permanently stayed by operation of order 4 of the orders made by Stevenson J on 11 December 2017.

A stay of proceedings stops the further conduct of the proceedings in a court at the stage that they have then reached, so that the parties are precluded after the stay from taking any further steps in the proceedings: Court Forms Precedents & Pleadings NSW (LexisNexis) (Court Forms Precedents & Pleadings) at [4418] – “Effect of a stay of proceedings — Stay of Proceedings”.

The effect of a stay is distinguishable from the effect of a dismissal of proceedings. Specifically:

A stay does not prevent the Court hearing a third party’s application to be joined as a defendant. In contrast to the situation where proceedings are dismissed (s 91(1) CPA), where proceedings are stayed the plaintiff may not bring fresh proceedings. A cross-claim may proceed even though the originating process has been stayed and vice-versa: Court Forms Precedents & Pleadings NSW at [4418] (omitting footnotes).

Whilst the effect of the 2017 orders is to stop the parties taking steps in those proceedings, the stay, does not prevent the Court from regulating its own processes.

Neither party has contended that the proceedings are a nullity. Mr Parsons, when I raised the issue with him, accepted that the proceedings were susceptible to being dismissed or stayed (T 29.23-29; 32.17-25) or that they may even be a nullity: T 32.27-30. However, he submitted that whatever the status of the proceedings might be, the costs orders made in these proceedings by Slattery J were not a nullity: T 33.29-46.

The order made by Young AJA (as his Honour then was) mandated that “No fresh proceedings are to be commenced by the plaintiff on the same causes of action without the leave of the Court. That leave to be obtained prior to commencement of any fresh proceedings.”

I am of the view that the statement of claim in these proceedings seeks relief and pleads matters concerning the 2006 mortgage sale. Thus, the 2014 orders preclude the commencement of such proceedings without leave of the Court.

In the statutory context, as a general proposition, whether or not the failure to obtain leave prior to the commencement of proceedings is a matter going to jurisdiction (and therefore is a matter rendering the proceedings a nullity) or whether it is an irregularity or defect capable of being corrected by the Court making an order granting leave nunc pro tunc depends on construction of the relevant statutory prohibition in question: see e.g. Spautz v Kirby (1989) 21 NSWLR 27 at 30 per Hunt J (as his Honour then was); Emanuele v Australian Securities Commission (1997) 188 CLR 114; [1997] HCA 20 (Emanuele) at 148 per Kirby J; Turagadamudamu v PMP Ltd (2009) 75 NSWLR 397; [2009] NSWCA 120 (Turagadamudamu v PMP Ltd) at [47] per Beazley JA (as her Excellency then was) (Ipp JA agreeing); Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32 (Berowra) at [19] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ.

It is possible to find cases where an action commenced without leave was held to be a nullity: National Mutual Fire Insurance Co Ltd v Commonwealth [1981] 1 NSWLR 400 (National Mutual Fire Insurance); Carey v Australian Broadcasting Corp (2012) 84 NSWLR 9; [2012] NSWCA 176 (Carey v Australian Broadcasting Corp) at [45], [48] per Beazley JA (as her Excellency then was) (dissenting on this point); TPFL Ltd (in liq) v SB Group Property Valuers and Consultants Pty Ltd (in liq) [2012] NSWSC 853 at [52] per Bellew J.

However, principally, those cases deal with the requirements for leave pursuant to a statutory provision.

Different considerations may arise in the case of a failure of a litigant to obtain leave prior to commencing proceedings where the requirement to seek leave stems from a prior order of this Court and not a statutory provision. The purpose of the jurisdiction being exercised and, where applicable, the provisions attaching to the exercise of a statutory power or the provisions attaching to the relevant Court order in question will be important in assessing the consequences of any breach or failure to obtain leave.

There are many cases in which litigants commence proceedings or actions within proceedings without leave and the Court has not regarded the proceedings as being a nullity.

There may be good arguments in these proceedings (given the emphatic phrasing of especially the last sentence of the order: “prior to the commencement of”) to the effect that as leave was not sought prior to the filing of the originating process, the proceedings are a nullity.

However, I find that the better view is that the failure of the plaintiffs to obtain leave in accordance with the order made by Young AJA (as his Honour then was) on 21 March 2014 does not render these proceedings a nullity, but, rather, constitutes an irregularity or defect that could be potentially cured by the making of an order granting leave nunc pro nunc (if, in the words of Stevenson J in the Stevenson J decision at [42], “a proper pleading was to hand”).

The notion that the non-compliance with the requirement for seeking leave prior to the commencement of proceedings would constitute a procedural irregularity rather than rendering the proceedings a nullity also better accords with the tenor of comments in cases such Emaneule (Kirby J at 152) favouring substance over technicality and, by analogy, those concerning statutory bars which operate procedurally rather than to deny a Court’s jurisdiction to determine a matter: Berowra at [20] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ.

The procedures of the Court distinguish between different types of judgment. In particular, the procedures distinguish between a judgment for the payment of money and a judgment which requires a person to do an act within a specified time.

Generally speaking, an order for the payment of costs is an order for the payment of money: Lysaght Bros & Co Ltd v Falk (1905) 2 CLR 443; [1905] HCA 7 at 446 per Griffith CJ for the Court; Thomas v Bunn [1991] 1 AC 362 at 380 per Lord Ackner (Lord Keith of Kinkel, Lord Brandon of Oakbrook, Lord Brightman and Lord Templeman agreeing); Ingles v Gould [1993] 2 Qd R 250; [1992] QCA 068 at 260 per Shepherdson J; Minister Administering Environmental Planning and Assessment Act 1979 (NSW) v Carson (1994) 35 NSWLR 342 at 356 per Young AJA (as his Honour then was); Green v Schneller [2003] NSWSC 202 at [15] per Simpson J (as her Honour then was); Grace v Grace (No 9) [2014] NSWSC 1239 at [9] per Brereton J (as his Honour then was).

A costs order is a binding determination of rights from the time it is made, even though it cannot result in a judgment for a specific sum of money, nor be enforced, until the costs assessment is complete: Lahoud v Lahoud [2011] NSWSC 994 (Lahoud) at [39] per Campbell JA; Zepinic v Chateau Constructions (Australia) Ltd (No 2) [2013] NSWCA 227 at [84] (Zepinic) per McColl JA.

A judgment “takes effect”, within the meaning of r 36.4(2) UCPR, when the judgment becomes enforceable: Lahoud at [38].

If costs are not otherwise fixed by the Court, or agreed between the parties, they “remain indeterminate until the issue of the certificate [of a costs assessor], when the amount of costs becomes a certain sum”: GE Dal Pont, The Law of Costs (5th ed, 2021, LexisNexis) (Dal Pont, The Law of Costs) at 701 [18.28] (footnotes omitted) citing Watkins Ltd v Ranger Uranium Mines Pty Ltd (1985) 35 NTR 27 at 42 per Nader J.

The costs assessment process is an administrative one. Applications for costs assessments are not “proceedings”: Benjamin & Khoury Pty Ltd v Rahme [2022] NSWSC 766 at [31] per Davies J. A costs assessor is not the Court nor an officer of the Court: Ballard v Carlisle Attorneys Pty Ltd [2010] NSWSC 769 at [17] per Pembroke J. Nonetheless, the process prescribed for costs assessments bears a resemblance to a court process in the sense that the process is commenced by an application in an approved form as explained in Wende v Horwath (NSW) Pty Limited (2014) 86 NSWLR 674; [2014] NSWCA 170 (Wende v Horwath (No 1)) per Beazley P (as her Excellency then was) at [8].

It is not possible to enforce an order for costs until the assessment of costs is complete: cf Lahoud at [38]. A judgment or order of the Court may not be enforced until it has been entered in accordance with the UCPR: s 133(1) CPA, r 36.11(1) UCPR. This includes adjudications giving rise to a certificate which may be filed or registered in the Court, under any other Act or law: s 133(2) CPA, r 36.11(3).

Thus, in the absence of an order to the contrary, a costs order takes effect when the costs assessor’s certificate is filed: r 36.4(2) UCPR.

A costs assessor’s certificate of determination is (subject to the nuances of the statutory procedures for enforcement of costs), not an order for payment of a sum of money, but, rather, “liability generally depends on an existing costs order by a court or tribunal. The certificate, though rendered enforceable by the court order, is to this end an incident of that order, necessary to quantify the costs recoverable in terms of the order”: Dal Pont, The Law of Costs at 701 [18.28] (footnotes omitted) citing Wentworth v Wentworth (1999) 46 NSWLR 300; [1999] NSWSC 317 (Wentworth v Wentworth) at 316 per Santow J (as his Honour then was) (affirmed in Wentworth v Wentworth (2000) 52 NSWLR 602; [2000] NSWCA 350).

The procedure for assessment by costs assessors and reviews of such (first instance) assessments by review panels (a quasi-appeal of an administrative nature) is overseen by the Manager, Costs Assessment.

Depending on when the proceedings to which the assessment of costs relates were commenced, a different statutory scheme may apply. The Legal Profession Act 2004 (NSW) (LPA) was repealed and replaced by the Legal Profession Uniform Law (NSW) (LPUL) (applicable by force of s 4 of the Legal Profession Uniform Law Application Act 2014 (NSW) (LPULAA)): Fordyce v Leung [2021] NSWCA 262 at [6] per Gleeson JA citing Voicu v The Owners – Strata Plan No 1624 [2020] NSWCA 52 at [22] ff per Basten JA (as his Honour then was). However, the LPA continues to apply if the proceedings to which the assessment of costs relate commenced before 1 July 2015 by way of a transitional provision: reg 59 Legal Profession Uniform Law Application Regulation 2015 (NSW).

Identifying which statutory scheme is important as, in the words of Basten JA (as his Honour then was), “[t]he language of the Uniform Law is not wholly in conformity with the language found in the 2004 Act”: eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (2015) 90 NSWLR 451; [2015] NSWCA 284 (eInduct Systems v 3D Safety) at [30].

Certificates of determination of costs the subject of the current application in Riva NSW Pty Ltd v Key Nominees were filed in the Local Court with respect to proceedings commenced in 2009, 2012, 2015, 2016, 2018. Accordingly, the LPA applies to 5 of the costs assessments and the LPULAA applies to 5 of the costs assessments.

Under the LPA, there is a distinction between the determination of an assessment of costs pursuant to a costs order on the one hand and the determination of the costs of the costs assessment on the other: Wende v Horwath (No 2) (2015) 91 NSWLR 588; [2015] NSWCA 416 (Wende v Horwath (No 2)) at [118]-[119] per Basten JA (as his Honour then was).

Thus, under the LPA, a costs assessor may issue more than one certificate in relation to an application for costs assessment: s 368(2) LPA. However, any such certificate may not set out the costs of the costs assessment: s 368(3) LPA.

In the case of an amount of costs that has not been paid, the certificate is, on the filing of the certificate in the office or registry of a court having jurisdiction to order the payment of that amount of money, and with no further action, taken to be a judgment of that court for the amount of unpaid costs, and the rate of any interest payable in respect of that amount of costs is the rate of interest in the court in which the certificate is filed: s 368(5) LPA. Section 369(7) LPA is the equivalent provision as s 368(5) as regards a certificate of determination with respect to the costs of the costs assessment.

Strictly speaking, each order for costs gives rises to a separate liability: Hancock v Rinehart (Lump Sum Costs) [2015] NSWSC 1640 at [28] per Brereton J (as his Honour then was) citing Wende v Horwath (No 1) at [9] per Beazley P (as her Excellency then was), [38]-[48] per Basten JA (as his Honour then was), [195]-[197] per Barrett JA.

Notwithstanding that, an “omnibus” application (encompassing multiple costs orders) is permissible. That is, a party may make a single, global application for assessment of costs with respect to multiple costs orders: Wende v Horwath (No 1) at [6]-[9] per Beazley P (as her Excellency then was), [195] per Barrett JA. Critically, however, the costs assessor must determine the costs the subject of each costs order separately and issue a separate certificate with respect to each costs order (even though several orders may be included in one application): Wende v Horwath (No 1) at [10] per Beazley P (as her Excellency then was), [42]-[47] per Basten JA (as his Honour then was) at [197] per Barrett JA; eInduct Systems v 3D Safety at [42] per Basten JA (as his Honour then was) (although Justice Basten expressed some doubt on the matter see at [35]).

There are similarities between costs assessment under the LPA and the LPULAA. In particular, an “omnibus” single application or reference may be made in respect of costs payable under multiple costs orders, rules or awards made between the same parties in one or related proceedings: s 74(4) LPULAA.

However, as distinct from the regime applying under the LPA, a costs assessor under the LPULAA may issue one certificate in relation to a single application for an assessment of costs that are payable under multiple orders, rules or awards made between the same parties in one or related proceedings, so long as the certificate specifies the amount determined for each order, rule or award separately: s 70(3) LPULAA.

In the case of an amount of money specified in a certificate that has not been paid, the certificate is, on the filing of the certificate in the office or registry of a court having jurisdiction to order the payment of that amount of money, and with no further action, taken to be a judgment of that court for the amount of unpaid money. The rate of any interest payable in respect of that amount of money is the rate of interest in the court in which the certificate is filed: s 70(5) LPULAA.

A certificate of costs (with respect to the costs of the costs assessment) is, from the date of filing, taken to be a judgment of the court for the total amount of costs specified in the certificate or certificates (if the party applying to register the certificate has not received any payments towards those costs): s 71 LPULAA.

Mr Parsons, after the hearing provided submissions to the effect that a costs order made in the Supreme Court does not ‘merge’ in a judgment of another court upon registration in that other court of a certificate of assessment of such costs order citing Frumar v The Owners of Strata Plan 36957 [2010] NSWCA 172 (Frumar).

Mr Wathukarage in response submitted that Frumar is not relevant and does not assist the court. Specifically, he submitted that:

I reject the submission that the Supreme Court costs orders have merged in the Local Court judgments.

There are at least a few distinctive aspects of registered costs certificates.

First, judgments consequent upon registration of costs certificates in a court are not judgments of a court as such. Whilst reference is made to them as ‘judgments’, they take their force from the statute: Frumar at [8] per Giles JA citing Doyle v Hall Chadwick [2007] NSWCA 159 (Doyle v Hall Chadwick) at [47]-[54] per Hodgson JA (Campbell JA at [79] agreeing); Frumar at [40] per Handley AJA (Macfarlan JA at [20] agreeing). The entry of judgment on a filed certificate is a ministerial act. It makes the certificate enforceable as a judgment but otherwise does not alter its legal effect as an adjudication of a costs assessor: Frumar at [43] per Handley AJA (Macfarlan JA agreeing); Zepinic at [76] per McColl JA.

Secondly, this kind of statutory judgment arising from a costs certificate is liable to be set aside or varied if the certificate on which it is based is set aside or varied: Doyle v Hall Chadwick at [52] per Hodgson JA referring to Croker v Commissioner of Taxation (2005) 145 FCR 150; [2005] FCA 127 at [14] per Hely J.

Thirdly, a costs certificate is a statement of the fair and reasonable costs ordered to be paid by one party to another. It does not, of itself, determine the amount that one party presently owes to another pursuant to a costs order. It is only upon the entry of judgment, following the filing of the certificate and UCPR Form 45, that there can be said to be a merger of the amount of costs that was owing pursuant to this process in the deemed judgment of the Court: Wende v Horwath (No 2) at [40] per Beazley ACJ (as her Excellency then was) (Adamson J (as her Honour then was) relevantly agreeing at [141]); cf Doyle v Hall Chadwick at [48] per Hodgson JA.

Fourthly, a costs order made in the Supreme Court does not ‘merge’ in a judgment of another court upon registration in that other court of a certificate of assessment of such costs order. The initial Court costs order does not lose its character as such when a costs certificate issues nor even when the costs certificate is registered: Zepinic at [78] per McColl JA citing inter alia Doyle v Hall Chadwick, Frumar, Wilmot v Buckley (1984) 2 FCR 540 at 543, 544 per Beaumont J; Van Reesema v Australian Growth Resources Corporation Pty Ltd (1987) 75 ALR 311 at 318 per Morling, Spender and Gummow JJ.

Fifthly, the Supreme Court Registry (if that is the Court in which certificates are sought be filed) does not accept for filing costs assessors’ certificates in the Supreme Court proceedings to which they relate unless sufficient reasons are demonstrated. All costs assessors’ certificates are registered as fresh proceedings in the Common Law Division. ​​​Moreover, one cannot register the costs assessors’ certificates in the costs assessment file in the Supreme Court:

Crucially, irrespective of whether costs have been assessed under the LPA or the LPULAA regime, it is possible to register multiple costs certificates relating to the same or multiple proceedings (if involving the same parties) in a single judgment: see UCPR Form 45; Weber v Aquaqueen International Pty Ltd; Aquaqueen International Pty Ltd v Weber [2013] NSWSC 1181 (Weber) at [1], [38] per Garling J (In Weber, four costs certificates relating to two separate proceedings were registered in the one application resulting in a single judgment pursuant to the LPA); Calandra v Murden [2015] NSWCA 231 at [2] (The proceedings to which the assessment of costs related in Calandra v Murden were commenced on 24 October 2013. Accordingly, the LPA was the applicable statutory scheme); Mohareb v Palmer [2017] NSWSC 1491 at [14]. Thus, in the proceedings the subject of this application, all the certificates could have been registered as one judgment resulting in the amounts in the 10 certificates being totalled as a single judgment.

Does the Court have power to make orders for enforcement of costs orders in these proceedings referable to cost orders that have arisen from other proceedings in this Court? Mr Parsons submitted that it did, it being in part an inherent power and in part an incidental power: T 30.32-36, 31.4-24.

Ordinarily, the Court operates by reference to steps within an action that is characterised by a unique file number consequent upon the filing of an initiating process to commence proceedings in the Court: see e.g. Coshott v Barry [2015] NSWCA 257 at [31].

Curiously, the noun “proceedings” is not defined in any of the CPA, the UCPR, the SCA, the Supreme Court Rules 1970 (NSW) (SCR). Further, the Interpretation Act 1987 (NSW) (Interpretation Act) does not provide any relevant definition of “proceedings”.

The ordinary English definition of proceeding is “a particular action or course of action”: Macquarie Dictionary, online ed. The dictionary recognises a legal context to the noun “proceeding” as being “the instituting or carrying on of an action at law” or “a legal step or measure”.

The plural “proceedings” is also used to describe “the actions that are taken in a court of law”: The Cambridge Business English Dictionary, Cambridge University Press.

The word “proceeding” is capable of a variety of meanings. Its meaning depends upon the statutory context and the objects of the legislation in question: Australian Securities and Investments Commission v Sigalla (No 4) (2011) 80 NSWLR 113; [2011] NSWSC 62 at [24] per White J (as his Honour then was).

Lawyers tend to use the plural “proceedings” to describe both singular and plural actions. Thus, the plural “proceedings” is used colloquially to describe both the series of events encompassed within a legal action under the realm of a single Court file number and also several legal actions under the realm of a number of different Court file numbers.

A reference to a word or expression in the plural form includes a reference to the word or expression in the singular form (s 8(c) Interpretation Act) and vice versa (s 8(b) Interpretation Act) although only to the extent that the contrary intention does not appear from the relevant legislation in question: s 5(2) Interpretation Act.

The Court’s power to regulate its processes and to make orders in relation to proceedings is not limited to proceedings under one Court file number in which an application is made, which matter is assigned to a judicial officer for hearing on any given day.

The Court also has a power to make orders in respect of several proceedings. The Court’s power to do this can be understood as being part of its incidental jurisdiction. Even if it were not, it could not surely be doubted that it was part of this Court’s inherent jurisdiction.

In any event, it is evident that whilst the Court administratively operates by making orders in respect of discrete proceedings with unique file numbers, the Court can make orders on any given occasion which have the effect of directing that several proceedings be heard together and even orders that several proceedings be consolidated effectively into one proceeding: see e.g. r 28.5 UCPR.

Frequently, orders are made for proceedings involving common questions to be dealt with together and at the same time and for issues to be determined in that context. That applies for example even in estate law where there are different plaintiffs but the proceedings all relate to the one estate: e.g. Wild v Meduri; Meduri v Neal; Meduri v Meduri [2023] NSWSC 113 at [25]-[31] per Hallen J.

Thus, a single judgment may be given in relation to all of the successful party’s claims in the proceedings. If there are multiple proceedings which have been heard together it is technically necessary to enter separate judgments in each proceedings. However, if the proceedings are, or have been formally consolidated, a single judgment may be entered: Dimas v GIO (NSW) (1992) 15 MVR 213.

The Court has a statutory power of set-off: s 21 CPA.

Further, the Court’s power over its own procedures and judgments permits set-off between judgments and orders: State of New South Wales v Hamod [2011] NSWCA 376 at [36] per Giles JA (Beazley JA – as her Excellency then was – and Whealy JA agreeing) quoting Australian Beverage Distributors v Evans & Tate Premium Wines Pty Ltd [2006] NSWSC 560; (2006) 230 ALR 184 (Australian Beverage Distributors) at [68]-[70] per White J (as his Honour then was).

The extent of the power is summarised in Ritchie’s Uniform Civil Procedure NSW (LexisNexis Butterworths) (Ritchie’s) at [s 21.25]. Relevantly, the power extends to setting-off:

The fact that a costs amount has not been finally determined is no objection to allowing a set-off. In such a case the appropriate course is to order a stay of the judgment, pending quantification of the costs, and then to permit the set-off of the quantified amounts: Ritchie’s at [s 21.25] citing Corbett v Nguyen (No 2) [2012] NSWSC 673 at [12] per Windeyer AJ (in tandem with order 4 made in that case); Australian Beverage Distributors at [77]-[81] per White J (as his Honour then was): Lahoud v Lahoud [2012] NSWSC 284 at [82]-[93] per Ward J (as the President then was) (set-off is not dependent on previously determined quantification).

Ordinarily, orders of a Court are enforced through use of the inherent jurisdiction (if the Court has such jurisdiction), the incidental jurisdiction or the statutory provisions governing the constitution and procedures of the Court.

The Supreme Court is the superior court of record in New South Wales: s 22 SCA. It has all jurisdiction which may be necessary for the administration of justice in New South Wales: s 23 SCA.

As the Superior Court of Record in NSW, the Court has inherent jurisdiction in addition to its specific statutory jurisdiction: e.g. Keith Mason, “The Inherent Jurisdiction of the Court” (1983) 57 Australian Law Journal 449.

In addition to the Court’s inherent jurisdiction, the Court has an incidental jurisdiction being an implied power to control its own processes in proceedings and to do whatever is necessary to enable it to act effectively within its jurisdiction: e.g. Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13 at 16-17 per Kirby P (as his Honour then was), 27-28 per Sheller JA.

The Court has a statutory power, before or after a trial (or the final hearing of a matter), to give judgment or make such orders as the nature of the case requires: s 90(1) CPA.

Where there are claims by plaintiffs and a cross-claim by a defendant the Court may give judgment for the balance only of the sums of money awarded on the respective claims, or may give judgment in respect of each claim and may give judgment similarly where several claims arise between plaintiffs, defendants and other parties: s 90(2) CPA.

The procedure for enforcing a judgment or order of the Court is to be prescribed by the rules of Court subject to Pt 8 CPA: s 103 CPA.

A “judgment” for the purposes of the CPA includes any order for the payment of money, including any order for the payment of costs: s 3 CPA. This definition of “judgment” in the CPA also applies to the UCPR by force of s 11 of the Interpretation Act: see Estate of Guamani; Guamani v De Cruzado [2023] NSWSC 502 at [207]-[208].

The Court may, by order, give directions with respect to the enforcement of its judgments and orders: s 135 CPA.

Generally, once final orders have been made the proceedings cannot be reopened by the Court. However, the Court still has power to make additional orders for the enforcement of its own judgment: e.g, Hall v Foster [2012] NSWSC 974 (Hall v Foster) at [15] per Ball J.

In particular, after proceedings are concluded, if there are various sets of proceedings between the same parties, the Court’s power to regulate its orders and enforcement of the orders should not be seen as being necessarily limited to having to make discrete orders in each proceedings.

Generally speaking, the task of enforcing judgments is not carried out by staff of the Supreme Court. Where writs of execution are permitted to be issued, they are directed to the sheriff in the relevant local area. Historically, in the United Kingdom, an exception to this is that a tipstaff is said to conduct to prison anyone committed under an order of committal for contempt committed in the face of the Court: DB Casson and IH Dennis, Odgers’ Principles of Pleading and Practice in Civil Actions in the High Court of Justice (22nd ed, 1981, Stevens & Sons) at 354 fn 2.

Ordinary writs of execution including writs of possession (UCPR Form 60), writs of restitution (UCPR Form 62), writs of delivery (UCPR Form 64) and writs for levy of property (UCPR Form 66) are all directed to the sheriff and all sheriff’s officers to execute.

Unsurprisingly, the means for the enforcement of judgments in the Supreme Court depend upon the nature of the judgment.

Generally speaking, the structure of the Court’s jurisdiction to enforce judgments distinguishes between:

Whilst the nature of a judgment informs the type of enforcement, the dividing line is not necessarily reflective of whether the proceedings which have given rise to the judgment are proceedings which might be described as “Equity proceedings” or “Common Law proceedings”.

Whilst many judgments in Common Law proceedings will involve judgments for the possession of land, delivery up of goods or payment of money, those judgments may be made in Equity proceedings. Likewise, whilst many Equity proceedings may involve judgments in which there is a declaration and orders requiring a party to do an act or thing, such orders may be made in Common Law proceedings.

There are what might be described as ordinary or usual means of enforcing particular types of judgments. Thus, judgments for:

The procedures for enforcement of judgments by form of writs of execution generally are addressed by Pt 39 Div 1 UCPR.

However, whilst judgments for the payment of money may be enforced by means of a writ for the levy of property, a garnishee order or a charging order (s 106(1) CPA), those are not the only means of enforcement.

In particular, judgments for the payment of money may be enforced in a preliminary way by an order for examination of the judgment debtor: s 108 CPA.

In addition, a judgment for the payment of money may be enforced by the appointment of a receiver of the income of the property of the person bound by the judgment: r 40.2(1)(a) UCPR.

It may also be enforced by sequestration of the property of the person bound by the judgment (r 40.2(1)(b) UCPR) and the issue of a writ of sequestration: r 40.3 UCPR.

Whilst, at first blush, the structure of the CPA and UCPR gives the impression that the 3 particular means of enforcing monetary judgments identified in s 106 CPA might be said to be the usual or ordinary means of enforcing monetary judgments, as a matter of construction of the CPA and UCPR, I do not construe the statutory provisions as precluding the appointment of a receiver and the issue of a writ of sequestration as a means of enforcement unless and until the s 106 means have been exhausted.

In most cases in the Supreme Court, the procedures for enforcement of an order of the Supreme Court will be carried out by the filing in the Supreme Court of an application invoking one of the means of enforcement permitted under Pt 8 CPA.

Historically, in relation to cost orders, taxation of a costs order relating to the Supreme Court order was carried out by taxing officer of the Supreme Court. However, the statutory regime for costs assessment which replaced the system of taxation gave rise to the possibility that a costs order of the Supreme Court creating a binding determination as between two parties in the Supreme Court that party A is liable to pay party B’s costs, may, nonetheless, not result in an enforceable judgment for costs in the Supreme Court, but, rather, following an administrative process of costs assessment, result in certificate which is registered not in the Supreme Court but in another court, such as the Local Court.

Generally, it is undesirable for parties to a dispute to be involved in procedures across a number of different courts for determination of their disputes. That is certainly the case in relation to the substantive issues between the parties: e.g. Fencott v Muller (1983) 152 CLR 570; [1983] HCA 12 at 608 per Mason, Murphy, Brennan and Deane JJ; Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457; [1981] HCA 7 at 519 per Murphy J.

Thus, whilst it seems cumbersome that an order for costs made by the Supreme Court, other than a fixed sum costs order, creating a liability for costs, would require the party with the benefit of the costs order to, following the process of assessment, register the certificate of determination of costs in another court such as the Local Court, that is an outcome which is expressly envisaged and in fact mandated by the statutory regime for the assessment of costs: s 70 LPULAA. As explained above, there is no merger of the Supreme Court costs order into the judgment registered in the other court.

Indeed, in most (or at least many) cases, the statutory regime has the effect that two courts play a part in the ordering and enforcement of costs orders with an order for costs made by the Supreme Court being enforced in either the Local Court or the District Court.

Whilst in many cases the fragmentation arising from an order of the Supreme Court creating a liability for costs and a judgment of the Local Court recording the quantification of those costs does not give rise to any enforcement issues, it would be naïve to think that there would not be cases in which some enforcement issues may arise.

The fact that the Supreme Court makes an order creating a liability for costs, which is not immediately quantified, does not of itself deprive the Supreme Court of jurisdiction to facilitate enforcement of the costs order either before the point, at the point, or after the point at which the costs order becomes enforceable.

For example, the Supreme Court may, prior to making any order for costs, order that a party pay into Court an amount of money as security for costs. Thus, to give an example, the Court may in litigation between two parties A and B commenced in late 2021, make an order for security for costs in early-2022 resulting in party A paying into the Supreme Court in early-2022 an amount of money (say $40,000) which is held as security for costs. That money is held in the Supreme Court and retained under the Court’s supervision notwithstanding that at that stage there is no order for costs or declared liability as between A and B for costs. The Court may ultimately make an order for costs in late-2022 in favour of party B against party A which costs party B proceeds to have assessed. The certificate of determination of costs arising from the process of assessment may be in the sum of $70,000. Party B registers the certificate as a judgment in the Local Court. It would seem an odd outcome that, notwithstanding that the judgment has been registered in the Local Court, Party B would be deprived of going back to the Supreme Court and seeking release of funds held as security for costs to facilitate part payment and enforcement of the costs judgment registered in the Local Court.

One can imagine a similar scenario arising out of a freezing order made by the Supreme Court in relation to the property of one of the parties.

Thus, the fact that the Supreme Court makes a costs order as between parties which results in a judgment being registered in the Local Court does not necessarily deprive the Supreme Court of powers to facilitate the enforcement of the costs order which it has made.

Therefore, conceptually, I do not see a difficulty with the Supreme Court being requested to make orders to facilitate enforcement or payment of costs arising out of costs order of the Supreme Court which costs order is registered in the Local Court. I consider that I am able to make orders in respect of enforcement of the costs orders as sought by the defendant.

Receivers may be appointed, both in and out of court for various purposes. In commercial life there may be a power to appoint a receiver pursuant to documented arrangements between parties which powers not only identify the circumstances in which the receiver may be appointed but also specify the purpose of the receiver and the powers to be given to the receiver to effect that purpose.

The Court has power to appoint a receiver: s 67 SCA. Questions of security for the receiver, remuneration powers and accounts are dealt with in Pt 26 UCPR.

The Court may authorise a receiver to do any act or thing that the parties or any of them might do if of full age and capacity: r 26.7 UCPR.

Generally, where the Court appoints a receiver, apart from any statutory provisions which specify the extent of a receiver’s powers, the powers the Court may authorise a receiver to have are directed to the purposes to be achieved. Further, the Court has regard to the usual practice of the Court pertaining to the particular purpose of the appointment: Kraft v Kupferwasser (1991) 23 NSWLR 236 at 242E-244F per Powell J (as his Honour then was) (a case involving dissolution of a partnership).

However, in practice, execution of a judgment is often not used because of the popularity of proceeding against individual judgment debtors in bankruptcy and against corporate judgment debtors in insolvency: Court Forms Precedents & Pleadings at [2402] – “Relationship with bankruptcy and insolvency proceedings — Execution & Enforcement — Introduction”.

Further, the appointment of a receiver to facilitate execution is not ordinarily the first port of call for a judgment creditor. It is evident from the caselaw that the Court has expressed reluctance to appoint a receiver as a means of enforcing judgments.

In Hall v Foster, Ball J addressed equitable execution in the following terms at [16]-[19]:

His Honour in Hall v Foster declined to make an order appointing a receiver. One of the reasons given was because his Honour did not think that the legal remedies available to the plaintiff were inadequate: at [21].

There is commentary to the effect that the Court may appoint a receiver but only where it proves impossible to obtain the cooperation of a judgment debtor to pay a judgment debt, and the ordinary process of execution will not reach the property of the judgment creditor: Adrian Zuckerman et al, Zuckerman on Australian Civil Procedure (2018, LexisNexis) at 935 citing Corporate Affairs Commission v Smithson [1984] 3 NSWLR 547 (Smithson) at 552 per Waddell J (as his Honour then was).

The passage in Smithson does not suggest that impossibility to obtain execution by other means is a necessary criterion to enliven or favour the discretion for the appointment of receiver but does suggest that it is considered in circumstances to enable a judgment creditor to obtain payment out of property which cannot be reached by legal execution: at 552D-E.

There is also commentary to the effect that sequestration of property is a remedy of last resort: Court Forms Precedents & Pleadings at [2465] – “Sequestration, committal and appointment of a receiver — Generally — Execution & Enforcement — Sequestration, committal and the appointment of a receiver”.

Ordinarily, receivers are not given powers of liquidators and trustees in bankruptcy to compel production of documents and to require persons to attend before a court and be examined: Smithson at 552A-D.

The Court must seek to give effect to and best advance the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in any proceedings when it interprets and exercises any power given to it by the CPA and UCPR: ss 56(1), (2), 57(2) CPA.

Thus, where the Court is requested to consider making available a form of execution of a judgment there are various matters to consider. At least one important consideration is whether the proposed method will be a just, quick and cheap method of giving effect to implementation of the order of the Court.

Costs associated with execution are an important consideration. In particular, in any proceedings, the practice and procedure of the Court should be implemented with the object of resolving the issues between the parties in a way that the cost to the parties is proportionate to the importance and complexity of the subject matter in dispute: s 60 CPA.

The fees payable in relation to functions exercised by the sheriff in executing a writ of possession are prescribed pursuant to the Civil Procedure Regulation 2017 (NSW) (Civil Procedure Regulation) reg 5, sch 2, item 3. The fee prescribed for execution or attempted execution of a writ of possession under the CPA is $367.

The Court may decline to appoint a receiver where the costs of appointment of a receiver outweigh the benefits of the appointment: Chen v Lym International; Chen v Marcolongo (No 2) [2009] NSWCA 158 (Chen v Lym International) at [8]-[9] per Beazley JA (as her Excellency then was).

Specifically, the costs of the appointment of the receiver and the mechanism for recovery of costs are relevant to exercise of the discretion to appoint a receiver: Lees v O’Dea (No 2) [2014] FCA 1082; (2014) 320 ALR 792 at [27]-[28] per Gordon J (as her Honour then was).

The noun “sequestration” has the ordinary English meaning of removal or separation of someone or something from a group: Macquarie Dictionary, online ed.

In legal parlance sequestration involves the removal of property from its owner by judicial authority. The most common example is a sequestration order in bankruptcy proceedings.

The provisions of the UCPR permit the Court to give leave for the issue of a writ of sequestration: r 40.3 UCPR.

In distinction to an application for the issue of a writ of execution, which needs not be served on the judgment debtor, an applicant for a writ of sequestration must serve the notice of motion, and any affidavit in support of the motion, personally on the person whose property is sought to be sequestrated (r 40.3(2) UCPR), although the Court has the power to dispense with that requirement: r 40.3(3) UCPR.

Mr Parsons submitted that the terms of r 40.7 UCPR (which provide that an order is not enforceable by sequestration unless the sealed copy of the judgment required to be served personally on the person bound bears the prescribed notice under r 40.7(3) warning of the consequences of disobedience to the order), do not apply to the issue of a writ of sequestration under r 40.3 as it falls within a different division of Pt 40 UCPR: T 58.37-59.15.

However, it does not seem to me that the submission is correct. Whilst it is readily apparent that the provisions of r 40.7 fall within Div 2 of Pt 40 UCPR, and this is superficially suggestive that the provisions of r 40.7 are confined to Div 2, it does not seem to me that the provisions of r 40.7 are quarantined to judgments requiring a person to do or abstain from doing an act.

The reason for that is that the setting out of the provisions of Pt 40 UCPR includes scaffolding of the particular rules into two divisions:

When one examines the content of the rules within Pt 40 one also sees that there is a distinction between judgments for the payment of money (r 40.2 UCPR) and judgments requiring a person to do or abstain from doing an act: r 40.6 UCPR.

Leave for the issue of writs for sequestration of property may be permitted in relation to both of those types of judgment: r 40.2(1)(b) and r 40.6(2)(b) UCPR. However, an order for committal of a person may only be made in respect of judgments requiring a person to do or abstain from doing an act: r 40.6(1) UCPR.

If a person liable to sequestration by way of enforcement of a judgment has notice of the judgment (a) by being present when the judgment is directed to be entered, or (b) by being notified of the terms of the judgment, whether by telephone, telegram or otherwise, the judgment may be enforced against that person by sequestration without service having been effected in accordance with r 40.7: r 40.7(4) UCPR.

Accordingly, it does not seem to me that it is permissible, without leave of the Court or dispensation of the rules for a writ of sequestration to be issued to enforce a judgment for the payment of money, unless:

The general law usual position is that where a writ of sequestration is issued it is directed to the sheriff and all sheriff’s officers to enforce: UCPR Form 164. However, in some circumstances, this Court has permitted a person or persons other than the sheriff to be appointed as sequestrators, specifically, registered liquidators: see e.g. TJ and RF Fordham Pty Ltd v Starhill Property Group Pty Ltd [2017] NSWSC 240 at [14] per Campbell J; Nest Opportunities Pty Ltd v Eastern Property Alliance Pty Ltd [2020] NSWSC 1835 (Nest Opportunities).

Where a party has appropriate or sufficient notice of the prospect of appointment of sequestrators to attach the party’s property the UCPR do not preclude the issue of a writ despite the fact that a sealed copy of the judgment with the prescribed notice endorsed has not been formally served upon the party. Despite caselaw suggestive that judges should hasten slowly in exercising the power to issue a writ of sequestration (Morgan v The State of Victoria [2008] 22 VR 237; [2008] VSCA 267 at [132] per Nettle (as his Honour then was) and Ashley JJA, with whom Pagone AJA agreed), the dispensing power exists and may be exercised in appropriate circumstances.

This Court has dispensed with the requirement for service of a judgment on which the prescribed notice is endorsed in circumstances where a party is obviously well aware of the judgment, ably represented and where the judgment creditor understands the consequences of noncompliance with the judgment: see e.g. Nest Opportunities at [43] per Stevenson J.

I was concerned to understand what the defendant had done in relation to attempting execution of the costs orders.

Mr Parsons submitted that conventional methods of enforcement had been attempted. In this regard he referred to what appear to be single instances of:

Mr McDougall (from the Bar table) informed me that one attempt had been made in 2016 to execute the costs orders by means of an examination summons: T 49.28-50.9.

Mr Parsons in the hearing before Brereton J submitted that his Honour’s finding (that any off-setting claim could not continue except by leave did not mean that the claim did not exist) would have the practical effect of permitting Riva to infinitely frustrate the defendant’s ability to serve statutory demands upon Riva. However, his Honour noted that there are other means of enforcing a judgment debt than a s 459E demand and, if it turns out that there is a genuine off-setting claim, terms could be imposed under s 459M requiring the prompt and diligent institution and prosecution of proceedings to enforce the off-setting claim: Brereton J decision at [18]. Brereton J further rejected an argument that the proceedings were proceedings for the taking of accounts for recovery of the $75,000 by Riva against the defendant: Brereton J decision at [19]-[20].

Mr Parsons essentially submitted that consequent upon the Brereton J decision the defendant anticipated (feared) any attempt to enforce costs orders would be stymied (T 44.43-45.4) because:

Mr Parsons, in response to questions by me, accepted that:

It is evident from the above chronology that the defendant took no means to execute judgment on the costs orders registered in the Local Court for over three years after registration had occurred (20 November 2019 – 14 February 2023): T 55.40-56.18.

Mr Parsons submitted that the defendant anticipated (feared) that any steps to enforce the cost orders [from November 2019] by way of bankruptcy proceedings would be impeded by the plaintiffs in the same way as occurred in an attempt to enforce by means of service of a creditor’s statutory demand before Brereton J: T 57.4-17.

Mr Wathukarage indicated that he was prepared to argue the receiver motion (T 21.3) and he considered it within his instructions to contest the motion (I note the transcript does not fully record Mr Wathukarage’s response T 21.13-15). Mr Parsons for his part did not oppose Mr Wathukarage appearing for the plaintiffs nor oppose whatever leave may have been required for Mr Wathukarage to appear in opposition to the motion: T 21.15-19.

Apart from the Certificate schedule (CB 56), Mr McDougall also provided a schedule (CB 167) totalling the 13 cost orders including interest and deducting set-off amounts including interest in favour of the plaintiffs (Costs balance schedule). The Costs balance schedule is annexed to these reasons for judgment as Annexure B. The balance said to be due to the defendant by the plaintiffs is $239.151,02.

However, in the midst of submissions during the hearing, Mr Parsons confirmed that the orders he wished to have enforced were not the 2017 orders but rather 10 of the 13 orders of this Court made in each relevant case that the plaintiffs pay the defendant’s costs: T 64.43-65.7, 65.45-48.

Ultimately, the defendant seeks to justify the appointment of a receiver on the basis that enforcement of the costs orders either by means of a writ for the levy of property or perhaps even by garnishee order is an unwieldy process which would be stymied by the plaintiffs.

The submissions were built upon a number of propositions.

First, Mr Parsons submitted that the defendant had acted reasonably in refraining from using conventional means on the basis of what is known in the conduct of the plaintiffs: T 50.13-26.

Mr Parsons submitted that the evidence which demonstrated the reasonableness of the defendant seeking the appointment of a receiver rather than issuing writs for the levy of property was as follows:

Secondly, Mr Parsons further submitted that the plaintiffs or Angelo as in these proceedings intimated that they or he will not pay the costs: T 61.44-62.20. He cited Angelo’s evidence:

Mr Parsons submitted that this evidence demonstrated that Angelo was intimating that “I’ve got a story to tell and I won’t pay”: T 62.8-9.

Thirdly, Mr Parsons submitted that this Court by reason of its knowledge of the history of proceedings in this Court, was better placed than for example the Federal Court or Federal Circuit and Family Court of Australia (Division 2) to effect enforcement of the costs orders if enforcement by means of a bankruptcy notice or proceedings were commenced: T 57.31-58.35.

Fourthly, Mr Parsons submitted that the appointment of a receiver would allow the application of a professional person to bring about a result of enforcement in an integrated and controlled way which other enforcement processes do not allow: T 59.48-60.2.

Mr Wathukarage submitted that the Court should refrain from using its discretionary power to appoint a receiver or issue a sequestration order.

In relation to the appointment of a receiver, Mr Wathukarage submitted that:

Mr Wathukarage additionally submitted that there is an error in the defendant’s calculation of amounts due and set-off. Specifically, he submitted that the calculation of interest due on the judgments should date from the time that the judgments were registered or entered in the Local Court rather than from the date of the Supreme Court order: Plaintiffs’ outline [25]-[27].

Mr Wathukarage ultimately did not press the submission that the plaintiffs have a genuine set-off for the underlying debt: T 68.21-45.

Mr Wathukarage submitted that there was no undertaking as to damages proffered in relation to the appointment of a receiver: Plaintiffs’ outline [1V]; T 69.35-70.1.

Finally, Mr Wathukarage submitted that a sequestration order can only be made where the judgment or order requires an act to be done or money to be paid within a specific time and a sealed copy of the judgment or order has been served on the person bound with a warning that contempt proceedings may be taken citing Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483; [1965] HCA 21 at 499-501 per Windeyer J. Mr Wathukarage submitted that none of the judgments entered in the Local Court or Supreme Court specify a date to pay and there is no evidence that the judgments were served on the plaintiffs with the appropriate warning: Plaintiffs’ outline [30]-[32].

It is convenient to address the respective submissions below under a number of headings.

I do not accept that r 40.2 UCPR is confined, as Mr Wathukarage submits, to a situation in which specific sum cost orders were made in the Supreme Court. The rule is not qualified in those terms. It is not appropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words: Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42 at [55] Gummow ACJ, Kirby, Hayne and Heydon JJ citing inter alia Owners of “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404; [1994] HCA 54 at 421 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ.

I do not accept as a matter of construction of the CPA and UCPR that a receiver may be only appointed if special circumstances exist.

Even if special circumstances were required, these proceedings have unusual characteristics which provide context to consideration of the application for the appointment of a receiver and consequential orders.

Ordinarily, in proceedings between parties there may be one or two judgments for monetary sums whether arising from substantive claims or costs orders. Those sums will, if they arise out of a single proceeding, often be set-off so that there is a judgment for a single sum in favour of one or other of the parties.

Here, the defendants seek to justify the appointment of a receiver on the basis that there are 13 different costs orders resulting in 13 registered certificates in the Local Court. Mr McDougall explained that in order to enforce such orders either by means of a writ for the levy of property or perhaps even by garnishee order, they would ordinarily be required to make 13 separate applications to issue 13 writs (or garnishee orders): T 40.14-48, 62.30-45, 63.38-42. They say, with some force, that that is an unwieldy process. The argument still holds even given the limiting of the application to the 10 Supreme Court costs orders.

Whilst there is some force in Mr Wathukarage’s submission that the defendant has delayed in approaching the Court, it seems to me that in context the delay is not untoward and not a matter which should preclude the appointment of a receiver if such appointment was otherwise appropriate.

I do not accept that as a matter of construction the costs orders of Slattery J are not enforceable specific sum costs orders but rather conditions precedent to commencing proceedings against the defendant.

Whilst I can readily accept that conceptually, the appointment of a receiver might or would have some impact upon the plaintiffs’ respective business activities, there was no specific evidence of what if any business activities the plaintiffs are engaged in. In light of that, I do not accept the submission that the plaintiffs would be unable to carry out their (unspecified) business activities.

In relation to the submission that there was an error in respect of the amount of interest calculation, Mr Wathukarage did not proffer details of a calculation of what he said was the correct amount.

Mr Wathukarage submitted that the offset amount (with a proper calculation of interest) is, based on Angelo’s evidence, $268,922,35: CB 200[7]: Plaintiffs’ outline [28]. That evidence was admitted but only on a limited basis under s 136 Evidence Act, as Angelo’s contention. It is based on the three off-setting amounts the subject of the 2017 orders and no demonstration was given as to how the interest was calculated. I do not accept that figure is a correct figure.

Mr McDougall was not cross-examined on his calculations in the Cost balance schedule CB 167. The total of the amounts referable to the 10 Supreme Court costs orders (i.e. excluding the 2 District Court costs orders and the 1 Local Court costs order) with interest is $386,601.10 ($429,436.91-$42,835.81). The off-setting amounts with interest total $190,285.89. The difference between those amounts is $196,315.21.

The powers which the defendants sought that the proposed receiver be given are as follows:

The powers specified in s 420(2) of the Corporations Act:

The defendant proposed that the receiver provide accounts to the Court for each 6 monthly period, or shorter should the receivership/sequestration be terminated earlier, such accounting to be provided within 1 month after the end of such period: Receiver motion [8].

The consent to act of Mr Woodgate makes reference to hourly rates charged in respect of work done for tasks carried out by him as a receiver and also of his partners and employees who may perform work for the receiver. The consent attaches a schedule of standard rates of Woodgate & Co referable to 16 classifications of employee ranging from junior to senior partner. The consent also acknowledges that the disclosure of the hourly rates should not be taken to imply that remuneration on an hourly basis is the most desirable or appropriate arrangement in every case. Attention is drawn to the provisions of the Corporations Act acknowledging that another method of calculation of remuneration may be appropriate: s 473(2)&(3) Corporations Act.

The defendant sought that the appointment be on the basis that the receiver/sequestrator be entitled to receive remuneration at Mr Woodgate’s firm’s standard rates from time to time and internal disbursements subject to further order of the Court fixing past and future remuneration and internal and third party disbursements: Receiver motion [9].

The defendant sought an order dispensing with the requirement for security for the receiver: Receiver motion [10].

Mr Wathukarage also submitted that the appointment of any receiver should be on the basis that there is security for receivership in the sense of there being an undertaking as to damages: T 69.35-70.1. Mr Parsons indicated that if an undertaking as to damages is required, it would be proffered by Lionel Nathan Warat, a director of the defendant: T 70.4-16.

The evidence in the proceedings does not reveal whether or not an omnibus application for an assessment of costs was applied for under the multiple orders made between the same parties in the various proceedings.

More significantly, the evidence does not reveal why the defendant did not seek to register costs relating to the various costs certificates in the one UCPR Form 45 application, so as to result in a single judgment amount rather than 10 different registered judgments.

It seems to me that the situation that has arisen (such that the defendant did not take steps to consolidate the various costs certificates in the one UCPR Form 45 application, so as to result in a single judgment amount rather than 10 different registered judgments) might be regarded as regrettable. However, for good or for bad it is the situation that prevails as between the parties.

The fact that some simpler path may have been available to the defendant does not seem to me, at least in the circumstances of this case, to be a reason to deny to the defendant relief which is conceptually available and does justice as between the parties.

Often in life difficult problems or exceptional circumstances call for unique solutions.

Whilst the Court is mindful that there are limits to which the statutory provisions may be pressed into service to address unique situations, the guiding principles in relation to case management under the CPA and UCPR reflect in part the wisdom that rules are intended to facilitate the dictates of justice rather than inhibit them: cf the comments of Gleeson CJ in Fernance v Nominal Defendant (1989) 17 NSWLR 710 at 724, where his Honour said that “[t]reating the rules of Court as slaves rather than masters does not warrant their emasculation”.

Had the defendant attempted to execute judgment by ordinary means such as through the issue of a writ for the levy a property or a garnishee order when the first or second or initial cost orders were obtained, it may be that execution by those means would have worked.

The exceptional situation which now prevails as between the parties is that the defendant has, as a judgment creditor, the benefit of at least 10 costs orders.

A process of execution which would ordinarily require the issue of 10 separate sets of execution processes is unwieldy.

To require the defendant now to resort to a process which is unwieldy or cumbersome is an important consideration.

However, the costs associated with execution is also an important consideration.

In order for a writ for the levy of property to issue, it is not necessary for the judgment creditor to provide evidence to the Court as to what property the judgment debtor holds or to warrant to the sheriff that any particular property is property of the judgment debtor.

The affidavit evidence in support of an application for a writ for the levy of property must state the address or addresses at which property belonging to the judgment debtor may be located: r 39.3(4)(b) UCPR. The prescribed form of affidavit for the issue of a writ for the levy of property includes a pro forma paragraph to the effect “I believe that the property of the judgment debtor is located at the following address[es]”: UCPR Form 65 at [6].

The fees payable in relation to functions exercised by the sheriff in executing a writ for the levy of property are prescribed pursuant to the Civil Procedure Regulation reg 5, sch 2, item 5. The fee prescribed for execution or attempted execution of a writ for the levy of property under the CPA is $90.

As noted above, the Court may decline to appoint a receiver where the costs of appointment of a receiver outweigh the benefits of the appointment: Chen v Lym International at [8]-[9] per Beazley JA (as her Excellency then was).

There is no evidence per se which enables me at this point to properly assess whether the costs of the appointment of a receiver may outweigh the benefits.

Thus, I am left with the dilemma that execution by s 106 CPA means is unwieldy but the alternative proposed to simplify the unwieldy process, namely the appointment of a receiver, is potentially costly.

Overall, I consider that, subject to finding a way to manage the proportionality of costs associated with an enforcement process, a simplified process is called for having regard to the overriding purpose of the CPA and UCPR to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

In particular, I consider that as requested a receiver should be appointed as a receiver and sequestrator and that I should permit the issue of a writ of sequestration.

However, I address below the timing of the appointment, the terms on which the appointment should be made and issue of any writ of sequestration.

It is evident that the appointment of a receiver may potentially incur significant costs and have impact upon the circumstances of the plaintiffs.

I propose in those circumstances to give the plaintiffs a very brief opportunity to attend to the payment of the costs orders prior to the appointment of a receiver and sequestrator and issue of any writ of sequestration taking effect: cf Nest Opportunities at [7].

I consider that in the circumstances of this case it is appropriate to dispense with the requirement of the defendant serving on the plaintiffs a formal sealed judgment with the prescribed notice endorsed. First, it is transparently clear that the plaintiffs are well aware of the costs orders and have been in some cases for many years. Secondly, they have been and currently are represented by counsel and it is clear to me that Mr Wathukarage is capable and able to give the plaintiffs clear advice about the consequences. Thirdly, the plaintiffs have been on notice since approximately mid-February this year when the receiver motion was filed and served on them that the defendant has been seeking the issue of a writ of sequestration. Fourthly, in any event, given that I have indicated that I will give the plaintiffs a period of time within which to attend to payment of the costs they will have an additional opportunity to be aware of the consequences and to make a decision regarding what they do.

I consider that period of 21 days is an appropriately sufficient time to give to the plaintiffs.

If the plaintiffs pay the costs judgments associated with the 10 costs orders, then the proposed orders in relation to the appointment of a receiver and sequestrator and issue of a writ of sequestration will not take effect.

Mr Parsons did not make any specific submissions regarding the breadth of powers to be given to the proposed receiver.

The powers which I consider ought to be given to the receiver are purpose-based to facilitate the simplification of the process of execution that would otherwise apply if the 10 costs judgments were to be executed by the issue of 10 writs to sheriffs or 10 garnishee orders.

The powers proposed by the defendant appear to me with one exception to be apt to facilitate execution.

The one exception is the power proposed that the receiver be permitted to lodge caveats at NSW Land & Property Information (now known as “NSW Land Registry Services”) in relation to any real property of the plaintiffs.

A judgment for the payment of money may become secured by various means. However, per se such a debt is not a secured debt: Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 524 per Kirby P (as his Honour then was). Nor does a judgment debt for the payment of money give no interest in land: Black v Garnock (2007) 230 CLR 438; [2007] HCA 31 (Black v Garnock) at [2] per Gleeson CJ.

A writ, whether or not it is recorded in the Register, does not create any interest in land under the provisions of the Real Property Act 1900 (NSW) (RPA): s 105(1) RPA. A judgment creditor who has obtained a writ of execution, whilst entitled to enter a memorandum of the writ, has no caveatable interest in land Shannon Lindsay, Caveats Against Dealings in Australia and New Zealand (1995, Federation Press) at 114 citing inter alia Bond v McClay [1903] St R Qd 1 at 11 per Griffith CJ, Cooper and Real JJ.

In New South Wales, a judgment in any action at law does not of itself bind or affect any land (s 112(3) CPA) especially in the case of Torrens title land: Black v Garnock at [18]-[23] per Gummow and Hayne JJ; Boyd v Thorn (2017) 96 NSWLR 390; [2017] NSWCA 210 (Boyd v Thorn) at [81] per Leeming JA.

There is a clear distinction between a judgment which itself creates a proprietary interest (e.g. equitable tracing which yields a proprietary judgment which of itself creates an interest in property), and a money judgment capable of being executed against the judgment debtor's land: Boyd v Thorn at [79]-[80] per Leeming JA (in dissent, but not on this issue).

It has been observed that although not definitive, the remarks of the majority in Black v Garnock suggest some encouragement for the lodgement of a caveat as a matter of course whenever an equitable interest is acquired: IWC Industries Pty Ltd v Sergienko [2021] NSWCA 292; (2021) 20 BPR 41,785 at [122] per Gleeson JA citing Gummow and Hayne JJ at [44], Callinan J at [52], [80], [83]-[84] (Bathurst CJ at [1] agreeing and Ward JA (as her Honour then was) at [2] agreeing though preferring not to express a view, as to whether the conduct of the second appellant (a beneficiary under a trust) in not lodging a caveat was also postponing conduct, although accepting that taken with the other circumstances it was a relevant factor pointing to that conclusion).

I reserve for consideration on another occasion the appropriateness of empowering the receiver to lodge any caveat.

For the above reasons, I do not consider that the proposed receiver should have power to lodge a caveat in relation to any real property of the plaintiffs.

Nonetheless, as issues might arise in relation to the breadth of any powers to be exercised by a receiver and whether the powers given are adequate for the purpose, I will give the liberty to apply in relation to the extent of the powers of the receiver.

No proposal was given prior to the hearing regarding any payment of costs in respect of the receiver. Possibilities include that the costs of the receiver may be borne out of the money received in the receivership. However, if no monies or insufficient funds are forthcoming the payment of the receiver’s costs becomes problematic.

Nonetheless, I consider that risk can be managed by requiring the defendant to be responsible in the first instance for the costs of the receiver and further directing that the receiver act in a manner that the costs of the appointment be proportionate to the total of costs to be recovered and that the receiver’s ultimate remuneration be determined by the Court by reference to that direction.

The costs of the appointment are not merely a matter for the consideration of the defendant. The plaintiffs should be mindful of the fact that the appointment of a receiver may well cause the accrual of a degree of costs which will transcend those costs associated with ordinary execution methods carried out by means of a writ for the levy of property or a garnishee order.

In light of that, I propose to give the plaintiffs a limited opportunity to arrange for payment of an amount of costs to the defendant prior to the appointment of the receiver commencing, such that if the amount I propose be paid is paid, the appointment of the receiver and the issue of a writ of sequestration will not take effect. The amount I propose to be paid is the figure that I have calculated above namely the total of the amounts referable to the 10 Supreme Court costs orders with interest which is $386,601.10 less the off-setting amounts with interest $190,285.89 in accordance with the Costs balance schedule: CB 167. The difference between those amounts is $196,315.21.

Mr Parsons accepted that if there were to be an appointment of a receiver that whatever costs were incurred by the receiver would in the first instance have to be borne by the defendant: T 60.16-28.

As I have indicated above, the ultimate remuneration of the receiver would be determined by the Court and in terms of my concern regarding the quantum or extent of costs incurred Mr Parsons (as I understood him) accepted that the remuneration would ultimately be under the jurisdiction of the Court: T 60.30-35.

Mr Woodgate is a registered liquidator.

Where the appointee is a registered liquidator, the appointment will typically be made without any specific requirement for security: Joseph v Pelerman Group Pty Ltd (as Trustee for Reuben Pelerman Trust) (Supreme Court (Qld), de Jersey J (as his Honour/Excellency then was), 22 April 1998, unrep) at 5 referring to James O’Donovan, Company Receivers and Managers (2nd ed, 1992, Law Book Co) at [18.670] (note 2).

The value of the property to which the appointment relates is a relevant consideration in relation to whether the Court considers it appropriate to impose any security requirement: see National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 1 ACSR 405 at 443 per Beach J.

Having regard to the fact that on any view of the matter the value of the property to which the appointment relates is less than $300,000 I do not consider that the appointment be made on the basis of provision of security.

I made an order that subject to any further order of the Court, pursuant to r 7.10(1)(a) and 2(a) UCPR, that the proceedings continue in the absence of a representative of the Gustavo’s estate.

I make the following orders: