Padkohe Pty Ltd v Fletcher [2006] NSWSC 1239

New South Wales Supreme Court

CITATION : Padkohe Pty Ltd v Fletcher [2006] NSWSC 1239

HEARING DATE(S) : 17/11/06

JUDGMENT DATE : 21 November 2006

JURISDICTION : Equity Division

JUDGMENT OF : Barrett J

DECISION : Stay of execution of judgment refused

CATCHWORDS : PROCEDURE - judgments and orders - execution of judgment - where one plaintiff has money judgment against two defendants - where in each of two other proceedings one of those defendants obtained a costs order against plaintiff - where costs not quantified in either case - whether execution of judgment by plaintiff should be stayed

LEGISLATION CITED : Civil Procedure Act 2005, ss.21, 96, 135

Australian Beverage Distributors Pty Ltd v Evans & Tate Premium Wines Pty Ltd (2006) 58 ACSR 22 CASES CITED : Re A Debtor No 21 of 1950 [1951] Ch 612 Stooke v Taylor (1880) 5 QBD 569 Widgery v Tepper (1877) 6 ChD 364

Padkohe Pty Limited - First Plaintiff PARTIES : Davis Davis - Second Plaintiff Deborah Jayne Fletcher - First Defendant Tatlers.Com.Au Pty Ltd - Second Defendant

FILE NUMBER(S) : SC 5298/05

COUNSEL : Mr E.A.J. Hyde - Plaintiffs Mr M.K. Condon - Defendants

SOLICITORS : Malcolm Johns & Company - Plaintiffs Sage Solicitors - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

TUESDAY, 21 NOVEMBER 2006

5298/05 PADKOHE PTY LIMITED & ANOR v DEBORAH JANE FLETCHER & ANOR JUDGMENT 1 The defendants (Ms Fletcher and a company I shall refer to as "Tatlers") apply by notice of motion for an order staying until further order execution of a judgment entered against them in these proceedings on 8 May 2006. 2 The background circumstances are uncontroversial and may be stated relatively briefly: 1. By their statement of claim, the plaintiffs (Padkohe and Mr Davis) sought various relief against Ms Fletcher and Tatlers based on allegations about beneficial ownership of a leasehold and other assets related to an entertainment business. The claims were defended. 2. On 2 May 2006, the solicitors for the parties signed terms of settlement providing, so far as is relevant, as follows: "The parties agree to settle the proceedings on the following terms: 1. Verdict and judgment for the Second Plaintiff [ie, Mr Davis] against the Defendants [Ms Fletcher and Tatlers] in the amount of $75,000.00 and the return of the items referred to in the schedule to the Statement of Claim as numbered 18, 34, 35, 47, 48, 49 and 50. 2. The payment of the verdict and payment of the items to take place within 28 days of today." 3. Orders of the court were made on 5 May 2006 and entered on 8 May 2006. The first and sixth orders were: "1. a verdict and judgment be entered for the Second Plaintiff for $75,000.00. … 6. execution of the judgment referred to in Order 1 be stayed for 28 days from the date hereof." 4. On 13 June 2006, the court made, upon an ex parte application of Ms Fletcher and Tatlers (judgment debtors), an instalment order in respect of the judgment debt. The effect of that order was to make the judgment debt payable by monthly instalments of $10,000 on the last day of each month, commencing June 2006. That instalment order later ceased to have effect as a result of non-compliance with it. 5. On 11 August 2006, the court made another instalment order, again on the ex parte application of Ms Fletcher and Tatlers. That instalment order also required payment by monthly instalments of $10,000. This instalment order is no longer in effect, again because of non-compliance with it. 6. On 6 October 2006, there was an order in other proceedings in this court (being proceedings between Tatlers and Mr Davis, which I shall call "the statutory demand proceedings") that Mr Davis pay Tatlers' costs of the proceedings. 7. On 23 October 2006, there was an order of the Federal Magistrates Court in proceedings in that court (which I shall call "the bankruptcy proceedings") that Mr Davis pay Ms Fletcher's costs of the proceedings "as agreed or assessed under the Bankruptcy Rules". 8. Having regard to instalments already paid, the judgment debt in these present proceedings is now $31,370.00. 9. The costs the subject of the costs order in the statutory demand proceedings have not yet been quantified by assessment under the Legal Profession Act 2004; nor have the costs the subject of the costs order in the bankruptcy proceedings been quantified either by agreement or by assessment under the Bankruptcy Rules . 3 It is the contention of Ms Fletcher and Tatlers that the costs under the orders in the statutory demand proceedings and the bankruptcy proceedings are most likely to exceed the balance of the judgment debt still outstanding in these proceedings and that, for that reason, the court should grant the stay of execution sought. 4 I was taken to ss.21 and 96 of the Civil Procedure Act 2005 both of which deal with the general issue of set-off but neither of which is of any relevance. Both counsel approached the matter on the basis that the question of stay of execution and the more general issue of recognising any set-off are matters for the court's discretion. So far as staying execution of judgment is concerned, there is express power under s.135 of the Civil Procedure Act. There also exists an aspect of the inherent jurisdiction for the court to allow what is effectively set-off by granting a stay of execution of a judgment "if it be just": Re A Debtor No 21 of 1950 [1951] Ch 612 at p.621. 5 Dealing specifically with costs orders, White J, in Australian Beverage Distributors Pty Ltd v Evans & Tate Premium Wines Pty Ltd (2006) 58 ACSR 22, put the matter thus (at [68] – [70]: "[68] … Set-off of judgments for costs in different actions and in different courts has long been allowed, as has the set-off of judgments for costs against judgments for debt or damages. Such set-offs do not depend upon the statutes of set-off, or the general equitable jurisdiction, but on the control a court exercises over its own proceedings. The jurisdiction is explained in many cases dealing with claims by solicitors to assert a lien over a judgment for costs in favour of their client where the opposite party has obtained judgment against their client in the same or in other proceedings ( Edwards v Hope (1885) 14 QBD 922 at 926-927; Reid v Cupper [1915] 2 KB 147; Puddephatt v Leith (No 2) [1916] 2 Ch 168 especially at 173-174; Re a Debtor No 21 of 1950 [1951] 1 Ch 612 at 617-618).