Mahmoud v State of New South Wales [2013] NSWSC 1785

Supreme Court New South Wales

Medium Neutral Citation: Mahmoud v State of New South Wales [2013] NSWSC 1785 Hearing dates: 21 November 2013 Decision date: 04 December 2013 Before: Harrison J Decision: See [24] Catchwords: PROCEDURE - application to set aside consent orders - UCPR 36.15(1) - whether judgment entered irregularly, illegally or against good faith COSTS - offers of compromise - UCPR 20.26 and 20.27 - payment of interest - entitlement to interest - Civil Procedure Act 2005 s 101 - effect upon calculation of interest of delay between date of acceptance of offer of compromise and date of entry of judgment Legislation Cited: Civil Procedure Act 2005 Limitation Act 1969 Uniform Civil Procedure Rules 2005 Cases Cited: Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403 Category: Interlocutory applications Parties: Tosson Hussein Mahmoud (Plaintiff) State of New South Wales (First Defendant) Anthony Wolody (Second Defendant) Representation: Counsel: G Bateman (First Defendant) Solicitors: Crown Solicitor's Office (First Defendant) Holman Webb Lawyers (Second Defendant) File Number(s): 2009/293446 Publication restriction: Nil

Judgment 1HIS HONOUR: In March 2006 Mr Mahmoud was the owner and occupier of premises in Liverpool Street, Ashfield. In the early morning hours of that day, police forcibly entered the premises. Mr Mahmoud was there at the time. Mr Mahmoud took exception to the events that then unfolded. This is unsurprising. He thereafter commenced proceedings in this Court alleging that the actions of the police were wrongful and that he was entitled to damages as a consequence. His further amended statement of claim filed on 26 October 2011 alleged that he had been injured and that the actions of the police on that day entitled him to compensation for those injuries, as well as aggravated and exemplary damages for assault, battery, false imprisonment and trespass to land. He also claimed costs. 2The first defendant filed its defence on 25 January 2012. That defence was comprehensive and informative. It is unnecessary for present purposes to refer to it in any detail. It concluded with a paragraph alleging that Mr Mahmoud's cause of action was barred by operation of s 50C(1)(a) of the Limitation Act 1969. As far as I am aware, that issue had not been decided by the time the proceedings came to an end. 3Indeed, the principal allegations in Mr Mahmoud's statement of claim and the defendants' various responses to them were never actually tested. On 17 December 2012 the proceedings were settled. On that day orders were made by consent in the following relevant terms: "1. Judgment for the plaintiff in the sum of $110,000. 2. The plaintiff's costs of the proceedings are to be paid by the defendants as agreed or taxed.. 3. The plaintiff acknowledges that he has no further entitlement against the defendants in respect of the plaintiff's claim for damages arising out of, or in connection with, the events pleaded in the further amended statement of claim filed on 26 October 2011, and/or arising out of, or in connection with, the incident on 24 March 2006; and the plaintiff hereby undertakes not to bring further proceedings against the defendant [sic] in respect of the matter." 4After deduction of certain agreed sums, Mr Mahmoud was paid $108,474.30. As far as I am aware, the costs of the proceedings have not yet been paid to Mr Mahmoud or his former solicitors. Correspondence between the Crown Solicitor's Office and Mr Mahmoud about that issue has so far failed to resolve it. 5On 15 November 2013 Mr Mahmoud filed a notice of motion seeking, among other things, to set aside the orders made by consent on 17 December 2012. The relief claimed by Mr Mahmoud is difficult to summarise. The orders sought in the notice of motion are in these terms: "1. Pursuant to rules 49(18), 49(19), 36.15(1) and 36.16(4) of the UCPR the Court orders that the judgment and the orders, which have been made by Registrar Bradford at the Supreme Court on 17-12-2012, be set aside. 2. Pursuant to section 98(2), (3) and (4) 'Courts powers as to costs' of the Civil Procedure Act 2005 ... the Court orders that costs in this case be assessed by an assessor under the Costs Management Scheme NSW as this is an imperative procedure as an assessor requires a Court order that costs be assessed by an assessor as the matter has been resolved and settled outside court by the means of a Compromise Offer by the defendants and accepted by the plaintiff on 30-11-2012. 3. The Court orders that the costs in this case, which has been settled outside court on 30-11-2012 in the form of a Compromise Offer made by the defendants, the State of New South Wales and Anthony Wolody, and accepted by the plaintiff, are to be assessed on indemnity basis pursuant to Rule 42.5(b) of the UCPR, pursuant to Section 98(1), (2), (3) and (4) of the Civil Procedure Act 2005 ... pursuant to Rule 5.8 of the UCPR and pursuant to [8-0090] Indemnity costs of the Judicial Commission of NSW. 4. The Court orders that all the costs, associated with the filing of this further amended notice of motion and its second supplementary affidavit and all the costs associated with the filing of the notices of motion and their affidavits on 29-10-2013 and 4-11-2013 and until the completion of the costs assessment and the declaration of the final decision of the assessor, are parts of all the costs of case 2009/00293446 to be paid by the defendants to the plaintiff in accordance with the rules of the Compromise Offer and are to be assessed on indemnity basis, that those costs include the costs of Court's fees and charges, disbursements, conduct money and the costs of the amount of time the plaintiff has to spend in working on this case, in searching the different laws and in preparing his case and that these orders are made pursuant to Rule 42.5(b) Indemnity costs of the UCPR where it states that all costs are to be allowed, pursuant to Section 98(1), (2), (3) and (4) of the Civil Procedure Act 2005 ... pursuant to Rule 5.8 of the UCPR and pursuant to [8-0090] Indemnity costs of the Judicial Commission of NSW. 5. Pursuant to Rule 36.7 of the UCPR, the Court orders that the defendants pay the plaintiff within one week his overdue interest on the settlement money of $108,474.30 in the sum of $508.50 at the rate of 09.50 per cent per annum paid daily at the rate of $28.25 per day from 24-12-2012 when the settlement money was due to be paid to the plaintiff to 11-01-2013 when the settlement money was paid to the plaintiff, a total of 18 days of interest, and this is in compliance with the compromise offer and with its terms, conditions, regulations and obligations." 6Mr Mahmoud's motion came before me as Duty Judge on 21 November 2013. He read a series of affidavits in support. I permitted him to file further evidence within two weeks in response to submissions made by the defendants that Mr Mahmoud said took him by surprise. Principal among his affidavits is one filed on 29 October 2013. This affidavit is a relatively complex document of some length. Once again it is quite difficult to distil the essence of the matters to which Mr Mahmoud deposes in that affidavit without the risk of omission or misstatement. However, doing the best I can, Mr Mahmoud's evidence appears to construct the following propositions. 7Mr Mahmoud says that he was induced to enter into the settlement as a result of the "betrayal, misconduct and collusion" of his solicitor and the defendants. Indeed, Mr Mahmoud quite plainly says that the reason he appears before me unrepresented is because his former solicitor "...betrayed [him] and colluded with the defendants against [him] by conspiring with them to obtain an illegal, erroneous and fraudulent second resolution of the dispute in the form of Supreme Court orders on 17 December 2012 before Registrar Bradford and deliberately not disclosing to the Registrar that the parties have reached a settlement outside court in the form of a compromise offer on 30 November 2012 and that proves the vicious, malicious and scandalous mischief of the defendants against myself, the law and my interests." 8Mr Mahmoud appears throughout his affidavit to express concern that UCPR 20.27(3) somehow fatally infects the resolution of the dispute in this case and the validity and operation of the consent orders to which I have already referred. I have been given this impression by statements in Mr Mahmoud's affidavit such as the following: "It is very clear that the intention of the defendants on 17 December 2012 was to commit fraud and to deceive Registrar Bradford by not disclosing to him, in accordance with the law and with their obligations, and by not stating on those erroneous and fraudulent consent orders anything about the compromise offer which was the only resolution of the dispute between the parties. So, it is very clear that the judgment of 17 December 2012 was not made in accordance with UCPR 20.27(3) and it wasn't the type of judgment that rule 20.27 means." 9UCPR 20.27 is in these terms: "20.27 Acceptance of offer (1) A party may accept an offer by serving written notice of acceptance on the offeror at any time during the period of acceptance for the offer. (2) An offer may be accepted even if a further offer is made during the period of acceptance for the first offer. (3) If an offer is accepted in accordance with this rule, any party to the compromise may apply for judgment to be entered accordingly." 10Mr Mahmoud later swore that he "was deceived by those consent orders." Without in any way wishing to misstate or understate Mr Mahmoud's concerns, it seems fair to say that references of this type appear several times throughout his affidavit. 11Material otherwise annexed to Mr Mahmoud's affidavits also indicates that the following things occurred. On 29 November 2012 the defendants served an offer of compromise upon Mr Mahmoud. He accepted that offer the day after. He signed consent orders on 17 December 2012. The defendants paid the judgment amount in total within 28 days of that date. In due course Mr Mahmoud appears to have acquired the notion that he was entitled to both interest on the judgment sum as well as costs for his own time and effort over and above the costs payable on a party and party basis by the defendants in accordance with the agreed settlement terms. The defendants have consistently indicated to Mr Mahmoud in correspondence since that time that s 101(3) of the Civil Procedure Act 2005 is a complete answer to his claim for interest, and that the principles announced in Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403, and the cases that have followed it, are a complete answer to his claim for additional costs. 12It seems to be an accurate but unfortunate assessment of the current position that Mr Mahmoud steadfastly refuses to accept either of these apparently uncontroversial contentions. Attempts by the defendants to settle upon an amount payable for the party and party costs have also not been successful. Mr Mahmoud has not accepted amounts that the defendants have offered in order to settle that aspect of the dispute, which will inevitably now have to be examined by a costs assessor. The application that Mr Mahmoud now wishes to pursue would appear clearly to be the product of this festering disagreement. 13I inquired of Mr Mahmoud during the hearing whether or not in the circumstances of the case he proposed or intended to repay the $110,000 received by him so far from the defendants if he were successful in setting the judgment aside. Mr Mahmoud said that he did not. 14Doing the best I can, Mr Mahmoud's application appears to me to be brought pursuant to UCPR 36.15(1). That rule provides as follows: "36.15 General power to set aside judgment or order (1) 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, irregularly, illegally or against good faith. (2)..." 15It is quite clear that Mr Mahmoud's concerns are misconceived. Nowhere in the evidence upon which he relies is there any credible material to support his contentions that he was defrauded or deceived in any way. For example, there is no evidence to suggest that the judgment that was entered differed in some material respect from the offer of compromise that he accepted or that he did not give instructions to accept the offer in the first place. Mr Mahmoud has not alleged that he anticipated that some other or different result would follow when the proceedings were settled. Indeed, Mr Mahmoud appears content, if not actually determined, to maintain his entitlement to the sum of $110,000 that he received from the defendants in accordance with the settlement. Mr Mahmoud in effect insists upon approbating his entitlement to that money whilst simultaneously reprobating the validity of its source. 16Mr Mahmoud annexed a copy of his letter to his former solicitor dated 10 October 2013. That solicitor is not a party to these proceedings but figures prominently in Mr Mahmoud's affidavit. What appears to be the most up to date written expression of Mr Mahmoud's concerns can be gleaned from the terms of that letter. It is as follows: "I have stated many times in many emails to you that that so-called order of 17-12-2012 was not an order for it is a fraudulent, erroneous and illegal order obtained by fraud and deception by the solicitors and barristers of the parties in disputes. You know that very well and you know well the law. That order was a scandalous mischief against me by the lawyers of the parties. So, I will not rely on an illegal order and I will not allow the case for assessment to rely on that corrupt order. As I stated in my email to the Manager Costs Assessment on 28-08-2012, the settlement of the case was only by the legal mean of the well know compromise offer with its rules, regulations and limitations. As costs assessment can't be proceeded with based on a settlement of a compromise offer and as a court order is required in this case, I will contact the defendants to consent for a court order on indemnity basis and if they refuse I will file a notice of motion seeking an order for costs to be indemnity basis. I have studied the law in regard to the basis for indemnity and I have the evidences to submit to court to demonstrate the grounds on which I am basing my argument for a costs order on indemnity basis." 17It seems to me to be very significant and particularly instructive to observe that Mr Mahmoud gives no content in that letter to his allegations of fraud and deception beyond his reiteration of the perceived disconnect between the terms of the offer of compromise and the consent orders made by this Court. His complaints are otherwise incomprehensible. I am unfortunately unable to contrive any different or better understanding of his current concerns from the most recent statement of them in that letter. 18In the events that occurred, however, as referred to already, I gave Mr Mahmoud an opportunity to provide me with further evidence if he wished to do so, as some authorities upon which the defendants sought to rely appeared, to Mr Mahmoud at least, to take him by surprise. Mr Mahmoud did not seek to rely on any additional evidence but he did in fact prepare further submissions that reached me on 2 December 2013. They are instructive to the following extent at least. Mr Mahmoud maintains that UCPR 20.26(8) applies in his favour in the present context. That rule is in these terms: "20.26 Making an offer (8) Unless the notice of offer otherwise provides, an offer providing for the payment of money, or the doing of any other act, is taken to provide for the payment of that money, or the doing of that act, within 28 days after acceptance of the offer." 19Mr Mahmoud is concerned in these circumstances to emphasise that the settlement occurred on 30 November 2012, following his acceptance of the offer of compromise from the previous day, and that the agreed amount of the settlement should therefore have been paid within 28 days of that day, rather than 28 days from 17 December 2012. It is implicit in his argument that the formalisation of the settlement on 17 December 2012 did not relieve the defendants from a potential liability to pay the judgment sum within 28 days of 30 November 2012 or, in practical terms, from a corresponding potential liability for the payment of interest on the judgment sum if not paid according to that timetable. That contention appears on his analysis to affect his actual entitlement to interest. 20The evidence before me suggests that the judgment sum was paid in full in two parts, presumably pursuant to an arrangement between the defendants. The State of New South Wales paid its share by 8 January 2013 and Mr Wolody's share was paid by 11 January 2013. There is therefore scope, according to Mr Mahmoud, for him to argue that he has an entitlement to interest upon such portions of the judgment sum that were still unpaid after 28 December 2012, being 28 days from 30 November 2012. I have not heard argument at either a factual or legal level upon this from Mr Mahmoud, and neither defendant has specifically addressed it. It seems to me to be important that they do so before the matter is finally disposed of by me. 21However, the terms of s 101 of the Civil Procedure Act, upon which the defendants have placed reliance, should be noted. They are relevantly as follows: "101 Interest after judgment (1) Unless the court orders otherwise, interest is payable on so much of the amount of a judgment (exclusive of any order for costs) as is from time to time unpaid. (2) Interest under subsection (1) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from: (a) the date on which the judgment takes effect, or (b) such later date as the court may order. (3) Despite subsection (1), interest is not payable on the amount of a judgment if the amount is paid in full within 28 days after the date on which the judgment takes effect, unless the court orders to the contrary. (4)..." 22It will immediately be apparent that UCPR 20.26(8) deals with the deemed form of an offer of compromise rather than a party's entitlement to interest. The entitlement to interest is covered by s 101 of the Act. The offer of compromise that Mr Mahmoud accepted is not in evidence before me but it would seem likely from this distance that the consent judgment entered on 17 December 2012 would cover the field and that Mr Mahmoud has no additional entitlement to interest flowing from the terms of UCPR 20.26(8). The power of the Court to order otherwise, as contemplated by s 101(1) of the Act, would not appear to apply in a way that presently assists Mr Mahmoud, having regard to the terms of s 101(2) of the Act: the date upon which the judgment takes effect is the relevant date for the purposes of the calculation of interest. It remains to be seen whether there is scope for Mr Mahmoud to argue in this case that the Court can or should order to the contrary, as contemplated by s 101(3) of the Act. 23Quite apart from this limited and confined question, Mr Mahmoud's notice of motion is otherwise wholly without merit. It proceeds upon either a complete misunderstanding or a denial of the correct legal position. It is undoubtedly not assisted by the fact that Mr Mahmoud is no longer legally represented. In the circumstances I should indicate for the benefit of the parties that as presently advised, and subject to hearing any further submissions upon the possible significance or application of s 101(3) and/or UCPR 20.26(8), I would be disposed to dismiss the notice of motion. 24I will hear the parties on that limited issue at any time convenient to them and to the Court to be arranged in consultation with my Associate. I will also hear argument as to the costs of Mr Mahmoud's application.