John Murden v Emilio Calandra

These proceedings, commenced by summons on 24 October 2013, seek to set aside a decision of Magistrate Pierce in the Local Court made on 22 October 2013.

It is unnecessary to detail the, not inconsiderable, history of litigation involving the parties. It is sufficient to say that:

In the formulation of these orders the magistrate gave no attention to the fact that there were two categories of certificates which were referred to in the proceedings. There were the certificates issued by the costs assessor and there was the “Certificate of Order” or, to give it the full name it bore, the “Filing of Certificate of Order” referred to in the Notice of Motion. However, consideration of a discussion which occurred during an earlier stage of the magistrate’s remarks makes it clear that the “certificate” that was intended to be set aside were the certificates that had been issued by the costs assessor.

The “Filing of Certificate of Order” document seems in substance to accord with Form 45 made pursuant to s 17 of the Civil Procedure Act 2005 (NSW). Given that the Costs Certificates were annexed to that document the proper conclusion is that the Costs Certificates were themselves filed.

The basis of the magistrate’s decision was that in the course of settlement of the earlier proceedings there had been a release and Mr Murden in seeking to enforce the costs certificate was acting contrary to that release and in bad faith. In the proceedings before me, counsel for Mr Murden did not seek to challenge this conclusion, contenting himself with a challenge to the magistrate’s power to do what he did.

The filing of the two Certificates of Determination of Costs in the Local Court was a course contemplated by the terms of s 368(5) of the Legal Profession Act 2004 (NSW) which provides:

It was the principal contention on behalf of Mr Murden before me that there was no power or jurisdiction in Magistrate Pierce to set aside the judgment entered to reflect the Certificates. That submission must be accepted.

Section 372 of the Legal Profession Act provides that:

The Division then specifies a procedure for challenging a costs assessment, either through review by a panel of costs assessors or, in the case of a matter of law or where leave is granted, appeal to the Supreme Court from 2004 to 2008 and after an amendment in September 2008, the District Court.

Magistrate Pierce answered neither of these descriptions and thus he had no jurisdiction to set aside the cost assessor’s certificate. It remained on foot, it had been filed, and by force of s 368(5) remained “taken to be a judgment of that” court in which it was filed. Furthermore, assuming the judgment of 15 January founded on that certificate was itself a “judgment”, “there would be no ground on which … an appeal (from it) could be upheld, unless the relevant certificate underlying the judgment was set aside …” - Doyle v Hall Chadwick [2007] NSWCA 159 at [47]. By parity of reasoning, the judgment in the Local Court in favour of Mr Murden could not be set aside so long as the certificate remained extant.

In Frumar v The Owners of Strata Plan 36957 [2010] NSWCA 172 the Court of Appeal had to consider the effect of s 208KF(2) of the Legal Profession Act 1987 (NSW) which was materially the same terms as s 368(5). Handley JA, with the concurrence of Macfarlan JA, held that while a certificate filed pursuant to that section was “taken to be a judgment” it was not a judgment – see at [40] – although at least on the - in his Honour’s view doubtful - assumption that judgment could be entered on the basis of the certificate, that judgment could be set aside.

In that case the certificate upon which the “judgment” was founded had previously been set aside by the Court of Appeal. Handley JA, again with the concurrence of Macfarlan JA, went on, in [44] to observe that once the certificate of the costs determination had been set aside:

Counsel for Mr and Mrs Calandra seized on this passage as supporting the decision of Magistrate Pierce to set aside the judgment in favour of Mr Murden. However, Handley JA made it clear that the foundation for any setting aside of the “judgment” to which he referred was the prior setting aside of the costs certificate. Once the conclusion be reached that such an order was something that the magistrate had no power to do, counsel’s argument fails.

I was pressed by counsel for Mr and Mrs Calandra with the decision of McCallum J in Coshott v Barry [2012] NSWSC 850. In that case a firm of solicitors had obtained six certificates of determination of their costs associated with acting for their client in six matters. It was common ground that as to four of the certificates, no legal proceedings had been commenced and no judgment obtained prior to the expiration of the limitation period applicable to the solicitors’ claim. McCallum J held that the debt the subject of those certificates had therefore been extinguished and that any judgment entered upon the filing of the certificates would be liable to be set aside under Rule 36.15 of the Uniform Civil Procedure Rules 2005 (NSW). Her Honour observed at [48] that in her view an implicit premise of the application of s 208J(3) of the 1987 Act was the existence of a binding obligation to pay and this would not include a debt that had been extinguished by the Limitation Act 1969 (NSW) due to the passage of time. Section 208J(3) of the 1987 Act is in materially the same terms as s 368(5) of the 2004 Act.

In Weber v Aquaqueen International Pty Ltd [2013] NSWSC 1181 Garling J took the view that a Certificate of a Costs Determination, upon being filed, became a judgment which was susceptible of being set aside under Part 36.15 and 36.16 of the UCPR.

However, in neither Coshott v Barry nor Weber v Aquaqueen International Pty Ltd was any consideration given to what the Court of Appeal had said in Doyle v Hall Chadwick or in Frumar v The Owners of Strata Plan 36957 and I am bound by the Court of Appeal. In this case the Certificates of Determination of Costs had not been set aside by a body entitled to do so and accordingly there was no proper basis for Magistrate Pierce to set aside the “judgement” founded on them.

The hearing before me proceeded on the basis of an Amended Summons in which Mr John Murden sought orders that:

Subject to adding some additional specificity, orders to the effect of those sought should be made. Accordingly, I order: