Supreme Court New South Wales Medium Neutral Citation: Kassem & Secatore as joint liquidators of Pan Pacific Age Care Services Pty Ltd (in liq) & Anor v Koutavas [2012] NSWSC 236 Hearing dates: 27 February 2012 Decision date: 16 March 2012 Jurisdiction: Equity Division Before: Ward J Decision: Costs judgment set aside. Entry of costs judgment in lieu thereof. Catchwords: COSTS - costs assessment scheme - enforcement of cost certificates issued pursuant to ss 368 and 369 Legal Profession Act 2004 (NSW) - where both certificates lodged together and, pursuant to ss 386(5) and 369(7) Legal Profession Act 2004 (NSW), entered as single judgment for cost applicant - whether judgment entered irregularly on the basis that money payable under s 369 certificate not a debt due to the cost applicant - HELD - judgment arising from filing of s 369 certificate not for a debt due to the cost applicant - judgment set aside - orders in lieu made to give effect to the import of the statutory costs judgment arising on filing of the s 369 certificate RESTITUTION - right to reimbursement where moneys paid under compulsion discharging liability of another - whether right arose where cost applicant paid costs of cost assessor in order to obtain cost certificates from Manager, Costs Assessment - where cost respondent liable to pay costs as assessed under the s 369 certificate - OBITER - cost applicant in those circumstances would have right to reimbursement from cost respondent Legislation Cited: Civil Procedure Act 2005 (NSW) Legal Profession Act 2004 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Anderson Formrite Pty Ltd v CASC Hire Pty Ltd [2005] FCA 1424 Anlaby v Praetorius (1888) 20 QBD 764 Australian Securities Commission v Marlborough Gold mines Ltd [1993] HCA 15; (1993) 177 CLR 485 Bhattacharya v Berger [1999] FCA 883 Bhattacharya v Berger [1999] FCA 1302 Brook's Wharf & Bull's Wharf Ltd v Goodman Bros [1937] 1 KB 534 Croker v FCT (2003) 52 ATR 226 Croker v Commissioner of Taxation [2005] FCA 127 Dennis v Miller and Ors [2012] FMCA 25 Doyle v Hall Chadwick [2007] NSWCA 159 Edmunds v Wallingford (1885) 14 QBD 811 Exall v Partridge (1799) 8 TR 308 Frumar v Owners of Strata Plan 36957 [2010] NSWCA 172 Holtby v Hodgson [1890] 24 QBD 103 Infact Consulting Pty Ltd v Kyle House Pty Ltd [2007] NSWSC 56 Moule v Garrett (1872) LR 7 Ex 101 Pearl Bay Corp Pty Ltd v Lodur Pty Ltd [2000] WASC 315 Rankine v Lord [2011] FCA 478 The Esso Bernicia [1989] AC 643 Texts Cited: Goff and Jones, The Law of Restitution (5th ed, 1998) Ritchie's Uniform Civil Procedure NSW Category: Interlocutory applications Parties: Ozem Azzam Kassem and Bruno Secatore as Joint Liquidators of Pan Pacific Age Care Services Pty Ltd (in liq) ACN 112 742 882 (First Plaintiff/First Respondent) Pan Pacific Age Care Services Pty Ltd (in liq) ACN 112 742 882 (Second Plaintiff/Second Respondent) Kanella Koutavas (Defendant/Applicant) Representation: Counsel M Condon (Plaintiffs/Respondents) J T Johnson (Defendant/Applicant) Solicitors Sage Solicitors (Plaintiffs/Respondents) Owen Hodge Lawyers (Defendant/Applicant) File Number(s): 10/075348 Judgment 1HER HONOUR : Before me in the Duty Judge List on 27 February was an application brought by Notice of Motion filed on 14 December 2011 by the defendant (Mrs Kanella Koutavas) to set aside a costs judgment entered against her pursuant to Part 36 Rule 36.10 of the Uniform Civil Procedure Rules 2005 (NSW) as an irregularity. The judgment in question was entered on 9 November 2011 (initially only in favour of the joint liquidators of the second plaintiff but subsequently amended under the slip rule to be in favour of both the liquidators and the company itself) in respect of the costs (as assessed under the costs assessment procedures applicable in this Court) of both a costs order made in 2011 in favour of the plaintiffs in other proceedings and of the assessment of those costs. Issue is taken only with the latter component of the costs judgment, the amount in issue being $962.14. I was invited by Counsel for the applicant (Mr Johnson) to vary the judgment to exclude that amount. 2Broadly speaking, Mr Johnson submits that entry of the judgment for a composite sum (comprising both the substantive costs determination and the determination of the costs of the costs assessment) was irregular for the reason that s 369 of the Legal Profession Act 2004 (NSW) entitles only the Manager, Costs Assessment to recover the costs of a costs assessment (and thus any judgment for those costs can only be in the Manager's favour). The issue to be determined is therefore a narrow (and, as Mr Johnson concedes, technical) one but it is one on which there is little authority and which it is said may have significance in relation to the operation of the costs assessment procedure in general. Background 3There is no dispute on the present application that, following the making of a party and party costs order in their (and the company's) favour against Mrs Koutavas, the liquidators lodged an application for the assessment of those costs in accordance with the costs assessment procedures provided for under the Legal Profession Act 2004 (NSW) with the Manager, Costs Assessment. The Manager, Costs Assessment then referred the assessment of the claim to a Costs Assessor, Mr John Sharpe, for determination. 4On 20 October 2011, the Costs Assessor issued two Certificates: a Certificate of Determination of Costs pursuant to s 368 of the Act (in which he determined that the fair and reasonable amount of costs to be paid to the Costs Applicant by the Costs Respondent was the sum of $17,131.22) and a Certificate of Determination of Costs of Costs Assessment pursuant to s 369 of the Act (in which he determined that the costs of the costs assessment were to be paid by the Costs Respondent and were in the sum of $962.14). For convenience, I will refer to the respective certificates as the s 368 Certificate and the s 369 Certificate. In both, the Costs Applicant was identified jointly as the liquidators and the company in liquidation (and the Costs Respondent as Mrs Koutavas). 5The Costs Assessor at the same time published his Statement of Reasons pursuant to s 370 of the Act, in which he said at (xi): The Costs Respondent should meet the costs of the assessment. The Costs Applicants were placed in the position of having to proceed to assessment and accordingly the Costs Respondent should meet the costs of it. 6The s 368 Certificate contained a notation that the amount assessed excluded the costs of the costs assessment for which a separate certificate had issued (Note 1). 7The s 369 Certificate contained a notation that the amount of $962.14 included the fee paid for the application (Note 1, referring to s 369 of the Act) and a notation to the effect that the said amount included the costs of the Costs Assessor paid to the Manager, Costs Assessment to obtain the release of both certificates (Note 2, referring to s 368(6)). (On the copy of the s 369 Certificate which was admitted as Exhibit A, the form did not identify by whom the costs assessor's costs had been paid - this being a standard form document with the words "paid by the *Costs Applicant/Costs Respondent" but neither of the alternatives having been deleted. However, on the copy of the form annexed to the affidavit filed in support of the present application, which Mrs Koutavas' solicitor says was received by facsimile transmission from the Court, the words "Costs Respondent" have been crossed out. There is no dispute, as I understand it, that in fact the costs assessor's costs have been paid by the liquidators. Indeed, it seems to be accepted that, without payment of those costs, in the ordinary course no certificates would have been sent to the parties, having regard to s 386(6) of the Act. 8On completion of the assessment, the Costs Assessor notified the solicitors for both parties that he had forwarded to the Manager, Costs Assessment the Certificates and the Statement of Reasons all in triplicate and that the Manager would send these documents out on payment of the costs of the Costs Assessor . He also advised that the Certificates would be marked "prior to sending on to indicate which party paid such costs" (which seems to explain the handwritten crossing out on the copy received by Ms Koutavas' solicitors) and that "if that party is not liable for such costs but is entitled to recover them in full or in part, that party may recover them by registering the Certificates pursuant to section 369(7) of Legal Profession Act 2004". (I note this latter advice as indicative of the understanding at least within the profession of someone accredited as a costs assessor as to the operation of the legislation in relation to the costs assessment procedure and from which I could draw an inference as to the common practice in relation to such assessments.) 9The liquidators then filed the two Certificates in the Registry of this Court and, they having paid the costs as assessed under the s 369 Certificate, on 7 November 2011 the Manager, Costs Assessment formally issued the two Certificates of Determination of the Costs Assessor. 10On 9 November 2011, the solicitors acting for the liquidators filed in the Registry a Registration of Certificate of Determination of Costs (Form 45 under the Rules) in which the applicant was identified as the joint liquidators of Pan Pacific Age Care Pty Ltd (In Liquidation) ACN 112 742 882, and to which form copies of both Certificates of Determination were attached. That form disclosed that no payments or credits had been made or accrued since the judgment/order was made and specified the registration fee as $213 and the total amount to be enforced as at the date of registration as $18,093.36. Although the formal part of the Form 45 gave as the case number the proceedings in which the costs order had been made, the form was amended by hand (I would infer by the Registry) to specify a new proceeding number (2011/357753). I understand this to be for administrative purposes. 11A sealed Judgment/Order was issued on 9 November 2011 in terms that Mrs Koutavas was to pay the joint liquidators the sum of $18,093.36 (that being the aggregate of the sums of $17,131.22 and $962.14). (It can thus be seen that the $213 registration fee was not included in the judgment.) On 10 February 2012, the Judgment/Order was reissued (under the slip rule in Part 36 Rule 36.17) to include as one of the plaintiffs the company in liquidation and to require Mrs Koutavas to pay the judgment sum to the joint liquidators and the company in liquidation. Statutory regime for costs assessment 12The power of the Court to award costs is governed by s 98 of the Civil Procedure Act 2005 (NSW). Once a costs order has been made, the procedure for assessment of those costs is governed by the provisions of the Legal Profession Act 2004 (NSW), under which a costs assessor is appointed to carry out that assessment. 13Once an assessment of costs has been made, ss 368 and 369 of the Legal Profession Act provide as follows (with my emphasis where italicised): 368 Certificate as to determination (1) On making a determination of costs referred to in Subdiv 2 or 3 of this Division, a costs assessor is to issue a certificate that sets out the determination. (2) A costs assessor may issue more than one certificate in relation to an application for costs assessment. Such certificates may be issued at the same time or at different stages of the assessment process. (3) However, any such certificate may not set out the costs of the costs assessment within the meaning of section 369. [Note. Section 369 makes provision for the recovery of the costs of costs assessments relating to costs to which either section 317 (Effect of failure to disclose) or 364 (Assessment of costs - costs ordered by court or tribunal) applies. The section requires a costs assessor to issue a separate certificate setting out the costs of such costs assessments. That section also makes provision for the effect of such a certificate.] (4) In the case of an amount of costs that has been paid, the amount (if any) by which the amount paid exceeds the amount specified in any such certificate may be recovered as a debt in a court of competent jurisdiction. (5) 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. (5A) The costs assessor must forward the certificate or a copy of the certificate to: (a) the Manager, Costs Assessment, and (b) each party to the assessment, unless subs (6) applies. (6) If the costs of the costs assessor are payable by a party to the assessment as referred to in section 369, the costs assessor must: (a) forward a copy of the certificate to the Manager, Costs Assessment only, and (b) advise the parties that the certificate has been so forwarded and will be available to the parties on payment of the costs of the costs assessor. (7) Subsection (6) does not apply: (a) in respect of a certificate issued before the completion of the assessment process under subs (2), or (b) in such circumstances as may be prescribed by the regulations. 369 Costs of costs assessment (1) This section applies to the costs of a costs assessment in relation to: (a) costs to which section 317 (Effect of failure to disclose) applies, and (b) costs to which section 364 (Assessment of costs - costs ordered by court or tribunal) applies, and (c) costs that on assessment are reduced by 15% or more. (2) A costs assessor is, subject to this section, to determine the costs of a costs assessment to which this section applies. (2A) Subject to any order of or the rules of the relevant court or tribunal, the costs assessor may determine by whom and to what extent the costs of an assessment referred to in section 364 (Assessment of costs - costs ordered by court or tribunal) are payable and include the determination in the certificate issued under this section in relation to the assessment. (3) The costs of a costs assessment to which this section applies are payable: (a) for a costs assessment in relation to costs to which section 317 (Effect of failure to disclose) applies - by the law practice that provided the legal services concerned, or (b) for a costs assessment in relation to costs to which section 364 (Assessment of costs - costs ordered by court or tribunal) applies - by such persons, and to such extent, as may be determined by the costs assessor, or (c) for a costs assessment in relation to costs that on assessment are reduced by 15% or more - by the law practice that provided the legal services concerned or, if the costs assessor so determines, by such persons, and to such extent, as may be determined by the costs assessor. (4) The costs assessor may refer to the Supreme Court any special circumstances relating to a costs assessment and the court may make any order it thinks fit concerning the costs of the costs assessment. (5) On making a determination, a costs assessor may issue and forward to each party and the Manager, Costs Assessment a certificate that sets out the costs of the costs assessment. (6) If the application for a costs assessment has been dealt with by more than one costs assessor, a certificate issued can set out the costs of any other costs assessor. (7) 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. (8) The costs of the costs assessor are to be paid to the Manager, Costs Assessment. (9) The Manager, Costs Assessment may take action to recover the costs of a costs assessor or Manager, Costs Assessment. (10) In this section: costs of the costs assessment includes the costs incurred by the costs assessor of the Manager, Costs Assessment in the course of a costs assessment under this Division, and also includes the costs related to the remuneration of the costs assessor. 14Part 36 rule 36.10 of the Uniform Civil Procedure Rules provides that: (1) A cost assessor's certificate: (a) may be filed in the proceedings to which it relates, or (b) may be filed in fresh proceedings, whether in the same court of another court. (2) A number of certificates may be filed together under subrule (1) if each of the certificates: (a) relates to the same costs assessment, and (b) requires the same person or persons to pay costs. 15The note to those rules states, inter alia , that the certificate "or certificates" will, from the date of filing, be taken to be a judgment of the court under Division 11 of Part 3.2 of the Legal Profession Act 2004 (if the certificate or certificates are not accompanied by an affidavit under sub-rule (3) stating the amount of costs specified in the certificate(s) that have been paid), for the total amount of costs specified in the certificate or certificates. 16Section 133 of the Civil Procedure Act 2005 provides as follows: 133 Judgments and orders unenforceable until entered (1) A judgment or order of the court may not be enforced until it has been entered in accordance with the uniform rules. (2) This section extends to: (a) any judgment, order, determination or decree of a court, and (b) any adjudication or award of a person having authority to make an adjudication or award, that may be filed or registered in the court, or of which a certificate may be filed or registered in the court, under any other Act or law. (3) In subsection (2), "law" includes: (a) a law of the Commonwealth, and (b) a law of another State or Territory, and (c) in relation to the Supreme Court, a law of a foreign country. 17Part 36 rule 36.11 of the Uniform Civil Procedure Rules deals with the entry of judgments or orders of the Court. It provides that: (1) Any judgment or order of the court is to be entered. (2) Unless the court orders otherwise, a judgment or order is taken to be entered when it is recorded in the court's computerised court record system. ... (3) In this rule, a reference to a judgment or order of the court includes a reference to any judgment, order, determination, decree, adjudication or award that has been filed or registered in the court, or of which a certificate has been filed or registered in the court, as referred to in section 133(2) of the Civil Procedure Act 2005. (4) This rule does not limit the operation of rule 36.10. Reasons 18As noted earlier, the application before me (though commenced by Notice of Motion seeking to have the costs judgment set aside) was put as an application to set aside or vary the costs judgment by deleting the amount referable to the costs of the costs assessment. 19Part 36 rule 36.15 of the Uniform Civil Procedure Rules provides that a judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered or the order was made, inter alia, irregularly. The entry of a judgment is irregular if it has occurred otherwise than in accordance with the rules (in the sense that it has been entered in contravention of or without compliance with those rules). In Ritchie's Uniform Civil Procedure NSW , examples of judgments considered to be irregular (see [36.15.10]) include those where it appears that the judgment has been entered for more than is due or where the debt has been paid at the time the order is made. In those circumstances it is not necessary to show that the judgment was entered as a result of any misconduct. In the exercise of the discretion whether to set aside the judgment, the Court may impose terms. It is said that what may be termed inconsequential irregularity (see Ritchie's [36.15.15]) may not require the application of the general principle that irregularly obtained judgments should be set aside. 20There is power to vary a judgment or order under Part 36 rule 36.16 if a notice of motion for the setting aside or variation of the order is filed before entry of the judgment or order (sub-rule (1)), which is not the case here, or, relevantly, if such a motion is filed within 14 days after the judgment or order is entered (sub-rule (3A)). (Here, the judgment was entered in the Court on 9 November 2011 and no such motion was filed within the 14 day period of its entry; the later amendment to that judgment (under the slip rule) expressly provided that it was to take effect as from 9 November 2011. I note that there is no power to extend the period within which an application to vary an entered judgment may be made (sub-rule (3C), that recognising the public interest in the finality of litigation. Insofar as the variation is by consent, there is clearly power to vary the judgment under the Rules (as there would be in the inherent power of the Court). However, there is no consent between the parties as to the variation sought of the judgment. I am not satisfied that there is power to vary the judgment as such, although there is power, in the exercise of my discretion, on the setting aside of the judgment to impose terms in relation to the matter. 21The operation of both sub-ss 368(5) and 369(7) of the Legal Profession Act is that, on the filing of a costs certificate in the office or registry of a Court with jurisdiction to order payment of the amount of money the subject of that costs assessment, that certificate is taken to be a judgment of the Court with no further action. Such a judgment is recognised as taking its force from the statute; it is not a judgment of the Court in the sense that there has been an adjudication of the claim ( Doyle v Hall Chadwick [2007] NSWCA 159 at [47]-[54]; Frumar v Owners of Strata Plan 36957 [2010] NSWCA 172 at [8]). 22It is, therefore, the act of filing the costs certificate in the relevant court that constitutes the certificate as a judgment of the Court. In other cases, consideration has been given to the distinction between filing a certificate and lodgement of a certificate. See, for example, Infact Consulting Pty Ltd v Kyle House Pty Ltd [2007] NSWSC 56, where the relevant costs certificates were lodged with a Local Court on 21 August 2006 but were ultimately accepted as having been 'filed' on 25 August 2006, when filing fees were paid. However, while it may be that in a particular case something will turn on a distinction being drawn between the time at which a document is lodged (in the sense of being physically received by the relevant registry) and the time it is accepted for filing (in the sense that the requisite filing fee is paid and the document is either stamped as filed or electronically recorded as filed), if there be a difference in time between those events, no such issue arises in the present case. 23Here, the application for registration of the costs certificates was clearly stamped as having been filed on 9 November 2011 and the certificates were filed with that application. Those certificates are to be taken, on filing, as being judgments for the amounts of money stated therein as and from 9 November 2011. However, under the Civil Procedure Act , they are not enforceable as such until the judgment or orders have been formally entered in accordance with the Uniform Civil Procedure Rules . Therefore, it was necessary for formal orders to be taken out to record the judgments that were constituted by the filing of the respective costs certificates. 24In Pearl Bay Corp Pty Ltd v Lodur Pty Ltd [2000] WASC 315, Sanderson M, considering a situation where summary judgment was given for a set amount plus interest and the question was whether there was a judgment debt before it was formally entered, noted that the Rules of Court there applicable provided that a judgment or order of the Court takes effect from the day of its date and shall be dated as of the day on which it is pronounced, given or made (unless the Court orders that it be dated as of some earlier or later day, in which case it shall be dated as of that other day). Sanderson M referred to Holtby v Hodgson [1890] 24 QBD 103 where Lord Esher MR, dealing with an early English equivalent of our Rules, said (at 107): ... and the intention of the rule clearly is that, from the moment when the judge has pronounced judgment, and entry of the judgment has been made, the judgment is to take effect, not from the date of entry, but from the date of its being pronounced; it is an effective judgment from the day when it is pronounced by the judge in court. 25While it is clearly permissible under the Rules for the two costs certificates to be lodged together (and it cannot therefore be said in my view that the respective costs judgments were for that reason alone entered irregularly or otherwise than in compliance with the Rules), Mr Johnson submits that, having regard to the provisions of ss 368 and 369, it is not possible to have a single judgment issue in respect of the lodgement of more than one type of Certificate of Determination. In this regard, he submits that Part 36 Rule 36.10 of the Uniform Civil Procedure Rules 2005 is no more than "a mere clerical exercise" (there seemingly adopting the characterisation attributed in Croker v FCT (2003) 52 ATR 226 the Full Court of the Federal Court to the act comprised by registration of a costs certificate in the Local Court, there said at 230, to be "... a mere clerical entry in the records of that court. It is not an order pronounced or a judgment given by a superior court of record"). 26The nub of Mr Johnson's argument turns on sub-sections (8) and (9) of s 369. Those provisions make it clear that the costs of the costs assessor are to be paid to the Manager, Costs Assessment and that it is the Manager, Costs Assessment (only) who may take action to recover the costs of a costs assessor or of the Manager, Costs Assessment. It is submitted by Mr Johnson that it is therefore not possible for a party other than the Manager, Costs Assessment to have the benefit of a Certificate of Judgment arising from the filing of a s 369 Certificate (and hence it is not possible for Costs Certificates under different sections of the Act to be filed together and thence become one judgment). 27Thus it is said that the entry of the judgment in the present case (insofar as it includes the amount due to the Manager, Costs Assessment), constitutes a relevant irregularity in the entry of judgment which permits the Court to set aside the judgment or vary it to delete reference to the amount due under the s 369 Certificate. 28Mr Johnson seeks to draw support for this conclusion from the decision of Hely J in Croker v Commissioner of Taxation [2005] FCA 127, which has been applied in Rankine v Lord [2011] FCA 478 by Marshall J. In Croker , Hely J held that a bankruptcy notice had been overstated as it included in the debt claimed an amount for costs and expenses incidental to the lodging of a copy of the judgment. His Honour recognised at [12] that there had been cases (such as Bhattacharya v Berger [1999] FCA 883; on appeal [1999] FCA 1302) where the court had proceeded on the assumption that the costs of registration of a certificate in the Local Court were properly added to the amount of the certified costs, but said that his attention has not been directed to any case in which the issue as to the power to do so had been squarely argued or decided. 29Hely J in Croker noted at [14] that: When a certificate is filed with the Local court, the Local court does not adjudicate upon anything. The records of the Local Court either correctly reflect the operation of s 208J(3) of the LPA in the circumstances of the case or they do not. If they do not, then the issue of a "certificate of judgment" which incorrectly reflects the operation of s 208J(3) is devoid of any legal effect. 30In Rankine , Marshall J said at [40]: Section 98 of the Civil Procedure Act 2005 (NSW) governs the powers of a court to award costs. Nothing in that provision permits a filing fee to be added to an amount of costs which has been set by the court. The addition of the filing fee to the sum of costs was, as counsel for the respondents contend, an administrative or clerical act by a Local Court registry official and not exercise of the Local Court's jurisdiction under s 98 of that Act. 31Similarly, in Infact Consulting (at [19]), White J referred to Anderson Formrite Pty Ltd v CASC Hire Pty Ltd [2005] FCA 1424 to the effect that it is not open to include filing fees in a judgment debt based on costs certificates. 32In the present case, however, it is clear that the fee payable on lodgement of the application for registration of the certificates was not included in the costs judgment as entered in the court's record, so that the issue considered in Croker and Rankine in this regard does not arise. Here, the irregularity is said to arise from the entry of judgment in favour of the plaintiffs for a total sum that includes an amount payable under the legislation not to the plaintiffs but to the Manager, Costs Assessor. 33Counsel for the plaintiffs, Mr Condon, relies in this regard on (and invites me to follow) the approach adopted to this very issue in Dennis v Miller and Ors [2012] FMCA 25 by Smith FM. He submits that the procedures available under sub-ss (8) and (9), under which the Manager, Costs Assessment (who is not a party to either the principal proceedings or the costs proceedings constituted for administrative convenience when the costs certificates are filed) may directly enforce the costs of costs assessment judgment, are complementary in effect to the mechanism for enforcement by the recipient of the costs certificates of the judgment arising in respect of the unpaid costs when the certificates are filed. In effect, this would mean that sub-s (8) is to read simply as obliging a party who recovers costs of a costs assessment, in circumstances where those have not already been paid to the costs assessor, to forward the moneys so recovered to the costs assessor. 34In Dennis v Miller , two sets of certificates had been issued under ss 368 and 369 of the Legal Profession Act 2004 (NSW), and two judgments entered in the Local Court, in two separate costs proceedings. On the filing of the respective costs certificates, two judgments were recorded. Both included not only the certified costs amounts but also an additional amount of $78 (that Smith FM inferred was probably a filing fee or other charge or expense incurred by the respondents in relation to their filing of the two costs assessment certificates in the Local Court). On the authority of Croker , which Smith FM followed, the contention that the Local Court judgments had erroneously included additional charges that were not authorised to be included in such a judgment was upheld. 35However, it was also contended that the Local Court judgments were in a form which was not authorised by the Legal Profession Act (and therefore that the bankruptcy notice claimed an amount exceeding the "true indebtedness" of the debtor in question), by reason of the fact that they included a certified amount in respect of the costs for the costs assessment (under a s 369 Certificate) and those amounts were recoverable only in a judgment entered in the name of "the Manager, Costs Assessment" (not by, or in the name of, the successful applicants for the principal costs assessment determination). In effect the same contention is here raised on behalf of Mrs Koutavas. 36Smith FM rejected that contention, saying (at [14] and [15]): ... As counsel for the respondents pointed out, ss 369(8) and (9) need to be understood in the context of the preceding provisions. These include s 368(6), which authorises the Manager to withhold a certificate from the benefiting party until either that party or the party principally liable for costs has paid the costs of the costs assessor as certified under s 369. In this context, although s 369(9) also authorises the Manager to "take action to recover" those costs, this does not, in my opinion, implicitly preclude the party identified in the costs certificates as entitled to the certified costs of the assessment, from filing a certificate under s 369(7) and from thereby seeking to gain reimbursement of costs it has paid to the Manager. In my opinion, a sensible construction of these provisions supports the judgments obtained by the respondents in the present case, in so far as they included the amounts payable under the s 369 certificates. Mr Dennis' counsel cited no authority in support of the contrary construction. I note that it was not contended for Mr Dennis that the respondents had not, in fact, paid the assessment costs to the Manager so as to procure the issuance of the s 368 certificates. Nor was it contended that it was not open to the Local Court to issue one judgment combining amounts due in relation to one costs assessment under certificates once they were filed under ss 368(5) and 369(7), and I note that this is permitted by the Uniform Civil Procedure Rules 2005 (NSW), r 36.10(2). 37Mr Johnson submitted that, anecdotally, the regime contemplated by s 368(6) was introduced in order to obviate the need for the Manager, Costs Assessment to take steps (directly) to enforce a costs determination. (My research has failed to uncover any explanation of the changes made to the costs regime in that regard or the reasoning underlying the statutory provision in sub-s (8) that costs of the costs assessment are to be paid to the Manager, Costs Assessment.) 38The legislative costs assessment regime has the effect, as a practical matter, that until the costs of the costs assessor are paid (assuming the introductory words of the section are satisfied and the costs of the costs assessor are payable by a party to the assessment as referred to in s 369), no costs certificate will issue. The requirement for the Costs Assessor to deal with the Costs Certificates in the manner provided in sub-s 368(6) is mandatory. 39Though it may be that the Manager, Costs Assessment has a discretion whether in fact to withhold the certificates pending payment of the costs of the costs assessment, the ordinary course as I understand it is to withhold the costs certificates until payment is made. A party against whom a costs determination has been made will presumably have no incentive to make payment of the costs assessor's costs in order to obtain the costs certificate. Conversely, the party in whose favour the costs determination has been made has such an incentive since it is not in a position to enforce the costs determination until a certificate has issued. Hence, as a practical matter, the procedure provided for in s 386(6) has the result that a party with a costs determination in its favour that it wishes to enforce (ie one in the position here of the plaintiffs in the present case) will be required to pay the costs of the costs assessor and will then be left to recoup those costs from the party determined to be liable under the costs certificate. (It seems unlikely that the Manager, Costs Assessment, having already been paid the costs of the costs assessment, would take action himself or herself to recover those costs from the party who the costs assessor has determined is liable to pay them in those circumstances.) 40I was referred by Mr Condon to the principles of comity in the recognition of judgments relating to the interpretation of uniform national legislation ( Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485). It was submitted (and I accept) that I should be slow to take a contrary view to that which was the foundation of the judgment by Smith FM. I accept the force of the observation by Smith FM in Dennis v Miller to the effect that s 368(9) does not implicitly preclude the party identified in the costs certificate as entitled to the certified costs of the assessment from filing a certificate under s 369(7) and from thereby seeking to gain reimbursement of costs it has paid to the Manager. (The question that I think was not addressed on that occasion, and to which the court's attention may not have been drawn, was how the party identified as entitled to the costs was to rely on the filed certificate to gain reimbursement of those costs.) I too consider that a sensible operation of the costs regime would be to permit the recovery by a party who has been required to pay the costs of assessment, for which another party has been determined to be liable, of those costs. 41I have difficulty, however, with the proposition that the costs judgment arising automatically (by operation of the statutory provisions referred to above) from the filing a s 369 costs of cost assessment certificate of itself imposes an obligation on the party against whom the assessment is made to pay those costs to the party in whose favour the assessment is made (as opposed to being liable to pay those costs to the Manager, Costs Assessment), where that seems to be contradicted by the express provision that the costs of the costs assessment are to be paid to the Manager, Costs Assessment. To the extent that Dennis v Miller suggests otherwise, then I do not share that view. 42Insofar as Smith FM saw nothing in s 369(9) to preclude the filing by the party certified as entitled to the costs of a s 369 certificate (and reliance in some fashion on the judgment so constituted), with which observation I respectfully agree, it seems to me that the real issue is the manner in which that judgment is to be enforced. In that regard, the question in my view turns on what in essence is the judgment that arises on filing of the s 369 Certificate (since it is that judgment that should be given effect to when entered under the Rules and it is that judgment that may be enforced by the judgment creditor). 43There are two matters to be determined on the assessment of the costs of a costs assessment under s 369: first, under sub-s (2), the costs of the costs assessment and, secondly, under sub-s (2A), the party by whom, and to what extent, those costs are payable. The s 369 Certificate, as issued, addresses both matters. Sub-s 369(7) then provides that the certificate is taken to be "a judgment ... for the amount of unpaid costs". While that sub-section does not expressly say so, the judgment constituted on the filing of the certificate must be a judgment to the effect that the party so determined in the assessment is liable to pay those costs. However, there is nothing in that sub-section to say that the judgment operates as a judgment that the costs be paid to any particular person. The effect of sub-s 369(8) must in my view be that any such judgment is for the payment of those costs to the Manager, Costs Assessment. (If sub-s (8) of s 369 does not have the effect that the statutory judgment is for payment of the costs of costs assessment to the Manager, Costs Assessment, then it seems there would be scope for conflicting claims to the costs by both the recipient of the costs certificate and the Manager, Costs Assessment.) 44The s 369 Certificate in this case states that the said costs are "to be paid by the Costs Respondent", that being the relevant determination under sub-s 369(2A). Therefore, the judgment that arises on the filing of that certificate, having regard to the provisions of the Legal Profession Act to which I have referred above, must (it seems to me) be a judgment to the effect that, as between the parties to the assessment , Mrs Koutavas is liable to pay the costs of the costs assessment, in the amount so assessed, to the Manager, Costs Assessor. In effect, this may be seen as operating as a declaration as to who (as between the parties to the cost assessment) is to bear the responsibility for the costs of someone not party either to the principal proceedings or to the costs assessment. It supports the making of an order that Mrs Koutavas is to pay those costs to the Manager, Costs Assessor. Seen in this way, it makes sense that the Manager, Costs Assessor is then statutorily entitled to take action to recover those costs (ie to enforce a judgment in its favour though one made in proceedings to which it is not a party). 45I accept, therefore, that the judgment arising on filing of the s 369 Certificate (while a judgment in favour of the plaintiffs in the sense that it determines the liability for the costs of the costs assessment in a manner favourable to them) is not in itself a judgment for the payment of those costs to the plaintiffs . However, I do not accept that this necessarily means that the judgment that has been entered in favour of the plaintiffs in this case should be set aside as an irregularity. The purpose of the entry of the judgment in the Court's records as a judgment of the court (as opposed to a judgment arising by operation of the relevant statutory provision) is to give effect to and record the judgment arising by operation of the statute (and to permit its enforcement). 46It seems to me that, strictly speaking, the judgment that should be entered to record and give effect to the judgment arising by virtue of the statutory provisions on the filing of a s 369 Certificate in circumstances such as the present (where the certificate is filed, as is administratively permissible, together with a s 368 Certificate and where the party filing the certificate has, as recorded on the s 369 Certificate, met the costs of the costs assessment but was not liable under the terms of the cost assessment to do so) should be in terms that record the primary obligation on the party liable under the s 369 Certificate to pay to the Manager, Costs Assessment the costs of that costs assessment as determined. 47Where two certificates are filed together, there should in my view at the very least be a judgment recording the separate determinations made by the costs assessor in favour of the party successful on the costs assessment application: namely, a judgment ordering, first, that the party liable for costs under the s 368 Certificate is to pay those costs to the successful costs applicant and, second, that the party liable for the costs of the costs assessment under the s 369 Certificate is to pay the amount so determined under that certificate to the Manager, Costs Assessment. The second order comprised in such a judgment would then be enforceable by the Manager, Costs Assessment under the provisions of s 369(10) (though the Manager, Costs Assessment is not a party to the proceedings). It would also in my view be enforceable (in the sense that an order to compel performance of that obligation would lie) at the suit of the party (here the plaintiffs) for whose ultimate benefit such a payment would be. (I say this because it is unlikely that the Manager, Costs Assessment would seek to enforce costs orders where the costs have already been paid to him or her but that if after entry of the judgment the costs respondent complied with the order to pay those costs to the Manager, Costs Assessment, giving rise to a double recovery by him or her, then on receipt of those funds it would surely be incumbent on the Manager, Costs Assessment to refund them to the party that had earlier paid the costs for the purpose of obtaining the release of the costs certificate.) Alternatively, the party seeking recovery of the costs earlier paid to obtain the costs certificate might seek to obtain from the Manager, Costs Assessment the benefit of the judgment debt in its favour and enforce that judgment as assignee of the judgment debt. Either way, that would be likely to involve additional administrative cost and expense inconsistent with the statutory mandate for the just, quick and cheap resolution of the real issues in dispute in litigation where, as in the present case, there is no issue raised as to who is ultimately liable to pay those costs. 48As Mr Condon submits, one should be slow to construe the legislation that would give rise to a practical difficulty of the kind here at issue; rather, the legislation should be construed in a practical commercial way. I note also that, as evident in the present case, the costs of costs assessment in any particular case may be in a relatively small sum. 49The answer to the practical dilemma posed to a party in the position of the plaintiffs in these circumstances (where the party who has been found not to be liable to pay the costs of the costs assessment but has been effectively compelled, in order to obtain the costs certificate, to pay those costs and then is left without the benefit of a judgment debt in its favour for those costs notwithstanding the registration of the costs of costs assessment certificate) seems to me to be found in the restitutionary principles under which a person who has made a payment under compulsion of law that operates to discharge the primary liability of another is entitled to reimbursement by that other. 50Goff and Jones ( The Law of Restitution , 5 th ed, 1998) cite a passage from the first edition of Leake on Contracts , as quoted by Cockburn CJ in Moule v Garrett (1872) LR 7 Ex 101 at 104 as the classic statement of this common law principle: Where the plaintiff has been compelled by law to pay, or being compellable by law, has paid money which the defendant was ultimately liable to pay, so that the latter obtains the benefit of the payment by the discharge of his liability; under such circumstances the defendant is held indebted to the plaintiff in the amount. 51Goff and Jones note that to found a right to restitution of the moneys paid, three matters must be established: first, that the payer was compelled, or was compellable, by law to make the payment; second, that the payer did not officiously expose himself to the liability; and third, that the payment discharged a liability of the defendant. 52As to the first of those matters, the learned authors emphasise that the compulsion must be by law and that a moral obligation to make the payment would not suffice (Goff and Jones, 5 th ed, at 438). Similarly, a contractual obligation to make payment also would not suffice ( The Esso Bernicia [1989] AC 643, where payments made to discharge damages claims on behalf of the parties liable therefore, pursuant to an agreement with those parties, were characterised as voluntary or gratuitous). However, a statutory obligation amounts to compulsion by law ( Brook's Wharf & Bull's Wharf Ltd v Goodman Bros [1937] 1 KB 534), as does payment made pursuant to the execution of a judgment debt ( Edmunds v Wallingford (1885) 14 QBD 811) and in the present case the statute recognises that costs certificates may be withheld until payment of the relevant costs (thus tantamount to statutory compulsion for payment of those amounts). 53The second requirement prevents those who, by their own act, place themselves in a position where they are compelled to make the payment from claiming a right to restitution. Goff and Jones say at 445: The plaintiff's payment will not be officious if he has exposed himself to liability at the request, express or tacit, of the defendant, or if he has been forced to place himself in the position which rendered him liable to make the payment , or, perhaps, if he has intervened as a matter of necessity. In such cases if, in consequence of his intervention, he finds himself compelled to make the payment, he should be entitled to reimbursement. But if, in other circumstances, he freely and without request undertakes the risk of liability, he generally has no right to any direct reimbursement, even though he is compelled to make the payment. (my emphasis) 54Finally, with respect to the third requirement, this will usually be satisfied where the payer and other party are subject to a common demand. An example is where the owners of a warehouse were subject to the statutory obligation to pay customs duties owed by their customers ( Brooks Wharf ). However, there are cases where there is no common demand and the payment still operates to discharge the liability of another party ( Exall v Partridge (1799) 8 TR 308). That said, the liability of the other person must be discharged. If the liability remains even after payment is made, then the payer does not have a right to reimbursement of the moneys paid. 55Here, the compulsion to make payment of the costs of the costs assessor arises by virtue of the statutory requirement that the costs assessor forward the s 369 Certificate to the Manager, Costs Assessment and notify the parties that the certificate will be available (by inference, only) on payment of the costs of the costs assessor. The Costs Assessor has no discretion in this regard. There is, in my opinion, an implicit requirement imposed by the statutory regime that in order to obtain the costs certificates payment of the costs of the costs assessment must be made. 56The plaintiffs did not place themselves in a position to make payment officiously, but were required to do so by the practical effect of the procedure set out in the statutory regime for costs assessments. By paying the costs of the cost assessor, the plaintiffs have met the claim for costs by the costs assessor and have thus discharged the liability of the cost respondent to pay those costs as assessed under the s 369 certificate (if the costs respondent sought to contend otherwise then it would be difficult to see how she could resist a claim by the Manager, Costs Assessment directly to enforce the costs judgment arising on the filing of the costs certificate). Therefore, it seems to me that the plaintiffs have a right of reimbursement against the defendant for the payment of the costs of the cost assessor as determined under the s 369 Certificate. Any alternative scenario would postulate either the need in every case for the Manager, Costs Assessment to commence enforcement proceedings or the recipient of the costs order to commence those proceedings and join the Manager, Costs Assessment as a party to compel the recovery through that officer of the costs payable by the party against whom the costs order was made. This surely cannot have been the intention of the legislature as it is inconsistent with the statutory mandate for the just, quick and cheap resolution of the real issues in dispute (s 56 of the Civil Procedure Act 2005 ). 57In the present case (where there has been nothing to suggest that there is any dispute as to the payment of the costs assessor's costs by the liquidators and any dispute as to the liability for those costs would have been dealt with by way of a review in the ordinary course) it seems to me that an order for reimbursement by Mrs Koutavas of the costs of the costs assessment as borne by the liquidators would be appropriate in order to remove the unjust enrichment of Mrs Koutavas that would otherwise occur were she to retain the benefit of the discharge by the liquidators of her costs liability to the Manager, Costs Assessment. 58The present issue would not arise as a practical matter if the legislation made clear that the costs assessor had power to determine that the party liable under the assessment to pay the costs of the costs assessment should indemnify the party found not to be liable for those costs in respect of any amounts paid by that party in order to obtain the issue of the costs certificate (that being at present cast in doubt by sub-ss (8) and (9)) or, alternatively, if the legislation made clear that the judgment arising on the filing of a costs certificate issued under s 369 was not simply a judgment for the "unpaid costs" but was a judgment obliging the party found liable to pay the costs of that costs assessment to indemnify any other party to the costs assessment for costs already paid by that other party to obtain the issue of the costs certificate. Amendment to the statutory regime for the assessment of costs would remove room for doubt in this regard. 59The practical difficulty so identified in the present case would also be resolved if it is recognised that the formal entry of orders to give effect to the import of the judgment constituted by the filing of a s 369 certificate (and the determination contained therein that, as between the parties to the costs assessment, one identified party should pay the costs thereof), in circumstances where the s 369 certificate on its face discloses that the costs of the cost assessment have already been paid to the Manager, Costs Assessment by the party in whose favour judgment is to be entered, would be for orders to be entered first, that the party liable on the s 368 certificate pay the costs so assessed therein to the party in whose favour the determination is made; second, that the party liable on the s 369 certificate pay to the Manager, Costs Assessment the costs therein assessed as payable for the costs assessment, and, third, that if the s 369 certificate itself discloses that the costs therein have already been paid to the Manager, Costs Assessment (or there is other evidence to that effect filed at the time of filing of the certificate) then the party determined to be liable for the costs of the costs assessment reimburse the party who has paid those costs in order to obtain the release of the costs certificates. 60In the present case, there is no dispute that the costs of the costs assessment (for which the costs assessor determined that Mrs Koutavas was liable) have been paid by the liquidators. Although, for the reasons above, I consider that the judgment entered on 9 November 2011 and amended on 10 February 2012 was entered irregularly (in that it included in the judgment debt payable to the plaintiffs an amount in respect of the costs of the costs assessment), the power to set aside judgments entered irregularly is discretionary and one that must be exercised having regard to all the circumstances of the case. 61While it has been said that where a judgment has been obtained as a result of the plaintiff's irregular conduct or breach of good faith the defendant is generally entitled to set it aside as a matter of basic fairness ( Anlaby v Praetorius (1888) 20 QBD 764, cited in Ritchie's at [36.15.10]), here the irregularity affecting the judgment is one that arises from an application made in accordance with the Court rules (and in circumstances where the only suggestion that this might be irregular that can be found in the authorities was dismissed as inconsistent with the perceived intent of the statutory provisions in relation to cost assessment). 62It seems to me that basic justice requires that account be taken of the fact that the liquidators remain out-of-pocket for moneys paid in respect of costs for which Mrs Koutavas has been determined to be liable. Hence, in the exercise of the discretion to set aside the costs judgment for irregularity it is necessary in my view for orders to be made that appropriately recognise and give effect to the cost determinations that have been made. 63I am not satisfied that, absent consent from the defendant, there is power pursuant to Rule 36.16 to vary the judgment in the manner that I consider would be appropriate in this case. However, having regard to the fact that the discretion to set aside an irregularly entered judgment can be made on terms and having regard to: the acknowledged technicality of the irregularity, the desirability of avoiding the incurring of unnecessary costs in further litigation by the liquidators to recover an amount already determined to be payable by Mrs Koutavas and the small amount of money in issue (that has probably already been exceeded by the costs of the present application), I consider that the appropriate course is to set aside the judgment entered on 9 November 2011 and amended on 10 February 2012 and in its place to enter judgment as follows: 1. Kanella Koutavas is to pay to the plaintiffs the sum of $17,131.22 in respect of the costs determined under the Certificate of Determination of Costs issued pursuant to s 368 of the Legal Profession Act 2004 (NSW) on 20 October 2011. 2. Kanella Koutavas is to pay to the plaintiffs the sum of $962.14 by way of reimbursement to the plaintiffs of the costs of the costs assessor determined under the Certificate of Determination of Costs issued pursuant to s 369 of the Legal Profession Act 2004 (NSW) on 20 October 2011 and paid by the plaintiffs (or any one or more of them) in order to obtain the release of the respective costs certificates issued on that date in proceedings 2011/264774. 3. Pursuant to Part 36 Rule 36.4(3) of the Uniform Civil Procedure Rules 2005 (NSW), I order that Order 1 take effect as of 9 November 2011. 64I will hear submissions as to the date on which order 2 should take effect. I will also hear any submissions in relation to costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 March 2012