FEDERAL COURT OF AUSTRALIA

Kyriakopoulou v Crock [2000] FCA 1762

MELPOMENI KYRIAKOPOULOU v HENRY V CROCK and MARY CROCK

V 366 of 2000

RYAN, KIEFEL and MARSHALL JJ

MELBOURNE

7 DECEMBER 2000

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.         The appeal be dismissed.

2.         The respondents’ costs of the appeal be taxed and paid out of the estate of the bankrupt as part of their costs as petitioning creditors.

Note:       Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

the court

1                     This is an appeal from a sequestration order made by a single Judge of the Court on 10 May 2000.  The creditors’ petition on which the order was made relied on non-compliance with a bankruptcy notice claiming that the appellant was indebted to the respondents in the sum of $92,518.67, certified by the Taxing Registrar of the County Court of Victoria as the amount at which he had taxed the second and third defendants’ costs pursuant to an order of  Judge Morrow of that Court made on 14 October 1998.  There had been three defendants in the action in the County Court, the first of which had been the Mercy Private Hospital.  The petitioning creditors were the second and third defendants who had been represented jointly by the same Counsel and solicitors.  There was a lengthy trial before a Judge and jury in which the appellant claimed damages for physical and psychiatric injuries allegedly caused by the negligence of one or more of the defendants.  At the end of the trial, the jury found that none of the defendants had been guilty of negligence and the learned trial Judge on 2 October 1998 pronounced judgment for the defendants.  His Honour then went on to say:

“I will order that the plaintiff pay the first defendant’s costs, to be taxed on scale D with a certificate for 11 refreshers and that the plaintiff pay the second and third defendants’ costs, to be taxed on scale D with a certificate for 11 refreshers.”

2                     A form of order was drawn up by the solicitors for the first defendant, the Mercy Private Hospital, and authenticated under the seal of the Registrar of the County Court on 23 November 1998.  That order was in these terms:

“THE JUDGMENT OF THE COURT IS THAT:

1.         Judgement for the Defendants.

2.         The Plaintiff to pay the First Defendant’s costs, to be taxed on Scale D with a Certificate for 11 Refreshers.

3.         The Plaintiff to pay the Second Defendant’s costs to be taxed on Scale D, with a Certificate for 11 Refreshers.”

3                     An order in that form was attached to the bankruptcy notice served on the appellant on 14 July 1999.  It appears that the authenticated order in the form which we have just indicated was on the file of the County Court when the Taxing Registrar issued his Certificate of Taxation dated 25 March 1999.  That Certificate was granted after a hearing at which the appellant appeared in person.  It recited that:

“I have taxed the second and thirdnamed Defendants’ Bill of Costs filed with a Summons for Taxation 18 November 1998 and payable by the Plaintiff pursuant to judgment and order of His Honour Judge Morrow dated 14 October 1998 and allow the same at the sum of NINETY TWO THOUSAND FIVE HUNDRED AND EIGHTEEN DOLLARS AND SIXTY SEVEN CENTS ($92,518.67).”

4                     Shortly after the service of the bankruptcy notice, the form of authenticated order was varied to recite:

“THE JUDGMENT OF THE COURT IS THAT:

1.         Judgment for the Defendants.

2.         The Plaintiff to pay the First Defendant’s costs to be taxed on Scale D with a Certificate for 11 Refreshers.

3.         The Plaintiff to pay the Second Defendant’s costs to be taxed on Scale D with a Certificate for 11 Refreshers.

4.         The Plaintiff to pay the Third Defendant’s costs to be taxed on Scale D with a Certificate for 11 Refreshers.

DATE AUTHENTICATED:”

5                     Then followed two rubber stamp impressions, one of the signature of the Registrar and the other of the legend “28 JUL 1999 Registrar County Court Melb.”

6                     The change in the form of authenticated order has been explained in these terms in an affidavit verifying the creditors’ petition which was sworn by the respondents’ solicitor:

“The original form of the Judgment of His Honour Judge Morrow annexed to the Bankruptcy Notice served on the Respondent Debtor on 14 July 1999 contained an error by virtue of the fact that it did not order the Plaintiff, Melpomeni Kyriakpopoulou, to pay the third Defendant’s costs of the proceeding.  This error has been rectified by the Court and a sealed copy of the amended Order is annexed and marked with the letter “B”.”

7                     Mr Lee of Counsel for the appellant referred to O.36.07 of the Rules of the County Court which, subject to certain exceptions, are now identical to the Rules of the Supreme Court.  That rule provides:

“The Court may at any time correct a clerical mistake in a judgment or order or an error arising in a judgment or order from any accidental slip or omission.”

8                     Resort to that rule, Mr Lee contended, can only be had by motion on notice to the other party and the power of amendment which the rule confers is exercisable only by the Court which made the order.  Mr Lee referred to Ninnis v Miller [1905] VLR 669 where Holroyd J, speaking of what was then O.XXVIII r.11 of the Rules of the Supreme Court, observed, at 670:

“Rule 11 says that “clerical mistakes in judgments or orders or errors arising therein from any accidental slip or omission may at any time be corrected by the Court or a Judge on motion or summons without an appeal.”  It does not provide for their being corrected by the Prothonotary of his own motion, and it does not provide for their being corrected without a motion or summons.  Rule 12 says nothing about the mode of procedure under it, but as it provides that the Court or a Judge is to make the order, it would naturally be by motion or by summons according as the Court or a Judge respectively was applied to.  It seems to me that the proper course for the plaintiff to take would be to move or take out a summons for the amendment of the judgment, so as to be quite sure that one or other of these two rules (rules 11 and 12) applies to the case.”

9                     Because the version of the order of Judge Morrow as originally authenticated was not amended by the Judge or after application on notice to the appellant, it was said that the purported amendment was a nullity and there was nothing to sustain the taxation of costs which was likewise a nullity and incapable of creating a debt for which a bankruptcy notice could issue.

10                  This point was not taken at first instance when the appellant appeared in person.  In our view, the short answer to it is that an authenticated order, correctly reflecting the actual order made, is not a prerequisite to the exercise of the power of a Taxing Registrar of the County Court to tax the costs of an action in that Court.

11                  Order 63A.05 provides:

“Unless the Court otherwise orders, costs taxed in accordance with this Order shall be taxed by the Registrar.”

See also O.63A.10 which stipulates that:

“Where -

(a)       the Court gives judgment, or makes an order, for costs;

(b)       a proceeding is dismissed with costs;

(c)        an application in a proceeding is refused with costs;

(d)       a party is otherwise liable under these Rules to pay the costs of another party;

(e)        a party may tax costs under any of these Rules;

(f)        parties have agreed in writing that costs payable by one party to another may be taxed, and the agreement is filed -

the costs may be taxed without an order for taxation.”

12                  Order 59.02 of the Rules of the County Court provides:

“(1)     A judgment given or order made by the Court shall bear the date of and shall take effect on and from the day it is given or made, unless the Court otherwise orders.

(2)       Any other judgment shall bear the date of and shall take effect on and from the day it is authenticated in accordance with Order 60 [Order 60A].”

13                  As we understand it, sub-rule (2) of O.59.02 applies to consent or default or other judgments not pronounced in open Court.  In the present case, however, by force of O.59.02(1) the orders of Judge Morrow referred to in para 1 of these reasons took effect from the moment when they were pronounced. 

14                  Authentication of orders of the County Court is governed by O.60A rr..02, .03 and .04, which provide:

“60A.02(1)      A judgment or order other than a judgment or order under Rule 59.06 is authenticated when a form of the judgment or order, drawn up and lodged with the Registrar in accordance with Rule 60A.07, is -

(a)        signed by a Judge or a Master;  or

(b)        sealed by the Registrar with the seal of the Court -

and filed.

   (2)    A judgment or an order under Rule 59.06 is authenticated as provided in that Rule.

60A.03              A judgment given or order other than a judgment or order under Rule 59.06 shall not be authenticated unless -

(a)       the Court or the Registrar so directs;

(b)       it is to be enforced;

(c)        it is required by these Rules or by its terms to be served;  or

(d)       an appeal has been instituted or an application for leave to appeal made.

60A.04(1)        Where a judgment given or an order other than a judgment or order under Rule 59.06 is to be authenticated, it shall be authenticated-

(a)       in accordance with Rule 60A.02(1)(a), and the form of the order shall be signed by the Judge or Master who gave the judgment or made the order;  or

(b)       by the Registrar in accordance with Rule 60A.02(1)(b).

(2)       Where that Judge or Master is unable for sufficient cause to sign the judgment or order, it may be signed by another Judge or Master, as the case requires.

(3)       The Court may direct that a judgment given or order be authenticated by the Registrar in accordance with Rule 60A.02(b).”

15                  Mr Lee was inclined to argue that taxation of costs pursuant to an order of the County Court is a mode of enforcing that order so as to attract the requirement for authentication contained in O.60A.03(b).  However, O.63A.11(1) seems to be predicated on the understanding that taxation of costs is distinct from enforcement of a judgment or order.  It provides:

“Where costs are taxed otherwise than under a judgment or order for costs, an order of the Registrar for payment of any amount found to be due may be enforced in the same manner as a judgment for the payment of money.”

16                  More significantly, O.66, which appears to be framed as a code governing enforcement of judgments and orders makes no reference to taxation of costs after an order for their payment.  Although not essential to our conclusion, it is also to be borne in mind that the “slip rule” discussed in Ninnis v Miller on which Mr Lee relied was in terms different from the present O.36.07.  The rule in force in 1905 expressly stipulated that the discretion to correct an error or slip in a judgment or order be exercised “on motion or summons without an appeal.”  The absence from the present rule of the words just quoted suggests that the Court may exercise the power of correction of its own motion.

17                  Part 5 of O.63A of the County Court Rules prescribes the procedure to be followed on a taxation of costs and O.63A.38 provides, so far as is relevant:

“(1)     An application to the Registrar for costs to be taxed shall be made by summons filed in the office of the Registrar.

(2)       Where the taxation is made pursuant to an order or judgment, a copy of the order or judgment shall be lodged with the Registrar when the summons is filed.”

18                  Significantly, O.63A.38 does not require an authenticated copy of the order or judgment to be lodged when the summons for taxation is filed, but even if that rule be interpreted as requiring that a copy of the order as correctly made be lodged, a failure to comply with that requirement would not render the taxation a nullity;  see O.2.01(1) of the Rules, which provides that:

“A failure to comply with these Rules is an irregularity and does not render a proceeding or step taken, or any document, order or judgment therein a nullity.”

19                  Moreover, it is highly arguable that, by participating in the taxation of costs, the appellant waived any irregularity which may have been constituted by the failure to have before the Taxing Registrar the correct form of the order made by Judge Morrow.  For all of these reasons the contention advanced on behalf of the appellant must be rejected.

20                  However, the matters to which Mr Lee has drawn attention raise a question about the validity of the bankruptcy notice, having regard to the fact that the copy order annexed to it was not in the terms actually pronounced on 2 October 1998.

21                  Sub-sections 41(1) and (2) of the Bankruptcy Act 1966 provide:

“(1)     An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor a final judgment or final order that:

(a)        is described in paragraph 40(1)(g);  and

(b)        is for an amount of at least $2,000.

(2)       The notice must be in accordance with the form prescribed by the regulations.

22                  The relevant provision of the Bankruptcy Regulations are Regs 4.01(1) and 4.02(1) which provide:

“4.01(1)          In order to apply for the issue of a bankruptcy notice, a person must lodge with the Official Receiver:

(a)        a duly completed draft bankruptcy notice;  and

(b)       one of the following documents in respect of the final judgment or final order specified by the person on the approved form:

(i)         a sealed or certified copy of the judgment or order;

(ii)       a certificate of the judgment or order sealed by the court or signed by an officer of the court;

(iii)      a copy of the entry of the judgment or order certified as a true copy of that entry and sealed by the court or signed by an officer of the court;

(iv)       in the case of an award referred to in paragraph 40(3)(a) of the Act:

(A)       a copy of the award certified as a true copy by the arbitrator who made the award or, failing the arbitrator, by an officer of the Court after having compared the copy with the original award;  and

(B)       a sealed or certified copy of the order giving leave to enforce the award;  and

(c)        a copy of the draft bankruptcy notice for the Official Receiver’s records and sufficient additional copies of the draft bankruptcy notice for service and for annexure to any required affidavits of service.

.....

4.02(1)            For the purposes of subsection 41(2) of the Act, the form of bankruptcy notice set out in Form 1 is prescribed.”

23                  Form 1 in the Schedule to the Bankruptcy Regulations includes this paragraph:

“The creditor claims that the debt is due and payable by you.  A copy of the judgment or order relied upon by the creditor is attached.  At the time of applying for this Notice, execution of the judgment or order had not been stayed.”

24                  A sealed or certified copy or a certificate of a judgment or order of the County Court is, we consider, a document authenticated in accordance with the provisions of O.60A reproduced in para 14 of these reasons.  The copy of Judge Morrow’s order attached to the bankruptcy notice in the present case was, on the evidence, such a document.  That is so notwithstanding that it did not accurately reflect the terms of the order actually made by his Honour, and was subject to being administratively superseded by authentication of a later version reproducing the actual terms of the order, as in fact happened on 28 July 1999.  In these circumstances the bankruptcy notice served on the appellant complied strictly with the requirement to have attached to it an authenticated copy of the judgment or order relied on.  It is therefore unnecessary for us to choose between the conflicting approaches to the application of the regulations to bankruptcy notices illustrated by Kirk v Ashdown [1999] FCA 1664 and Bendigo Bank Ltd v Williams [2000] FCA 482.

25                  For these reasons the appeal must be dismissed.  We shall order that the respondents’ costs of the appeal be taxed and paid out of the estate of the bankrupt as part of their costs as petitioning creditors.

Associate:

Dated:              7 December 2000