FEDERAL COURT OF AUSTRALIA

Flint v Busuttil & Co Pty Limited [2013] FCA 258

THE COURT ORDERS THAT:

1.    The applicant’s Application for an Extension of Time within which to seek leave to appeal from, or, alternatively, to appeal from the decision of Federal Magistrate Neville given on 7 December 2012 (Flint v Richard Busuttil & Co Pty Ltd [2012] FMCA 1158) be dismissed.

2.    The applicant pay the respondent’s costs of and incidental to the said Application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    The applicant, Ms Flint, is a real estate agent based in Canberra, A.C.T.

2    For the first six months or so of 2007, the respondent (an incorporated legal practice) acted as the legal representative of Ms Flint in relation to proceedings in the Local Court at Batemans Bay, NSW. In those proceedings, Ms Flint claimed against two former clients, Mr and Mrs Blunden, $110,000 for commission which she contended was due to her as the real estate agent who had acted for Mr and Mrs Blunden in connection with the sale by them of a parcel of real property at Mystery Bay, NSW.

3    By letter dated 23 July 2007, the respondent informed Ms Flint that it intended to cease to act for her in relation to the Blunden proceedings. Under cover of the same letter, the respondent rendered its Memorandum of Fees and Disbursements covering the period from the commencement of its involvement up to 23 July 2007. The amount rendered was $6,410.00.

4    Ms Flint and the respondent then had a spectacular falling-out which spawned acrimonious litigation between them.

5    The respondent subsequently obtained two judgments in the Local Court of New South Wales against Ms Flint.

6    On 3 March 2011, Bankruptcy Notice No 1479 (the Bankruptcy Notice) was issued against Ms Flint at the request of the respondent. The Bankruptcy Notice was based upon the two judgments which the respondent had obtained against Ms Flint.

7    On 27 April 2011, Ms Flint filed an Application to Set Aside the Bankruptcy Notice in the Federal Magistrates Court of Australia.

8    On 19 October 2011, District Registrar Wall dismissed Ms Flint’s application with costs.

9    On 10 November 2011, Ms Flint filed an Application for Review of the District Registrar’s decision. A Federal Magistrate fixed that Application for hearing on 8 May 2012. Ms Flint requested that that fixture be vacated. The Magistrate acceded to that request. He refixed the hearing of Ms Flint’s application for 13 June 2012. That date was also vacated. After unsuccessfully attempting to fix yet a further hearing date, the Magistrate decided that Ms Flint’s Application for Review should be determined on the papers.

10    On 7 December 2012, the Magistrate dismissed Ms Flint’s Application for Review with costs (Flint v Richard Busuttil & Co Pty Ltd [2012] FMCA 1158).

11    Ms Flint did not seek leave to appeal or appeal from the Federal Magistrate’s decision within time. She should have lodged her application for leave to appeal by no later than 21 December 2012, if leave to appeal was required or, alternatively, lodged her appeal by no later than 21 January 2013 in the event that she had an appeal as of right (see r 1.61, esp r 1.61(5) and r 36.03 of the Federal Court Rules 2011 (FCR)).

12    On 1 February 2013, Ms Flint applied to this Court for an order extending the time within which she might appeal from the Magistrate’s decision given on 7 December 2012. She has proceeded upon the basis that she has an appeal as of right. I do not think that this is correct since the decision of the Federal Magistrate was interlocutory. However, I do not need at the moment to consider this point. I will return to it later in these Reasons only if it is necessary to do so.

13    These Reasons for Judgment determine Ms Flint’s Application for an Extension of Time.

The Local Court Judgments

14    On 5 October 2007, the respondent commenced an action against Ms Flint in the Local Court of New South Wales at Narooma. The claim was for legal fees and disbursements in the amount of $6,178.80. Ms Flint filed a Defence to that claim on 30 October 2007. In that Defence, she pleaded that the respondent had not complied with her instructions; that the costs rendered by it were excessive and not in accordance with the Costs Agreement between her and the respondent dated 10 February 2007; and that the respondent’s work had been performed negligently. On 9 November 2007, Ms Flint filed a Cross-Claim against the respondent for damages allegedly suffered by her by reason of the respondent’s negligence and delays.

15    On 14 March 2008, the respondent amended its claim by reducing the quantum thereof to $5,622.62.

16    The respondent’s claim and Ms Flint’s Cross-Claim were both heard by a Local Court Magistrate on 12 February 2009. The Magistrate gave judgment on 1 May 2009. He found for the respondent against Ms Flint on the principal claim and ordered Ms Flint to pay the respondent’s costs of the action. He found that the respondent had not been negligent. The Magistrate ordered that there be judgment for the respondent in the amount of $6,889.74. That sum comprised the respondent’s claim for fees and disbursements, interest, costs and fees. Included within that judgment was a fee “… for issue of Certification of Judgment …” in the amount of $52.00.

17    On 28 May 2009, Ms Flint filed a Notice of Appeal in the District Court of New South Wales by which she sought to overturn the Magistrate’s decision. That appeal was withdrawn and dismissed, by consent, on 3 September 2009.

18    On 9 December 2009, the respondent applied to the Supreme Court of New South Wales for assessment of the costs awarded to it by the District Court on 3 September 2009.

19    By Certificate of Determination of Costs dated 31 March 2010 issued pursuant to s 368 of the Legal Profession Act 2004 (NSW) (the LPA), a Costs Assessor determined that the respondent was entitled to the amount of $2,825.00 for its costs and disbursements incurred in respect of the District Court appeal.

20    By a separate Certificate of Determination dated the same day issued pursuant to s 369 of the LPA, the Costs Assessor determined that each of the respondent and Ms Flint should pay half of his costs of carrying out the costs assessment. Each of them was required to pay $771.88 under that Certificate. The respondent paid its share of the costs of the Costs Assessment. Ms Flint did not pay her share.

21    Ms Flint declined to pay her half share of the Costs Assessor’s costs of the assessment. The respondent did so in order to obtain the release of the s 368 Certificate. It is the practice of the Manager, Costs Assessment, not to release such certificates until the Costs Assessor’s costs are paid.

22    In early May 2010, the respondent applied to the Local Court of NSW at Narooma for judgment in the amount of $3,746.88.

23    By judgment certified on 19 July 2010 but registered on 10 May 2010, the Local Court at Narooma recorded the judgment in the following terms:

1.    Judgement for the plaintiff in the amount of $3,746.88 plus interest accruing at the Local Court Rate after judgement.

2.    Costs for issue of Certificate of Judgement in the amount of $52.00.

3.    Total Judgement in the amount of $3,746.88.

4.    No payments have been made to the plaintiff up to the date of judgement.

24    On 11 August 2010, the 10 May 2010 judgment of the Local Court was registered in the ACT Magistrates Court.

25    On 20 June 2011, Ms Flint applied to set aside the judgment entered by the Local Court at Narooma on 10 May 2010. That application was dismissed with costs on 11 August 2011.

The Bankruptcy Notice

26    As I mentioned at [6] above, the Bankruptcy Notice was issued on 3 March 2011. In that Notice, the respondent claimed the total sum of $11,206.86. That sum comprised the total of the two judgments in the Local Court of New South Wales to which I have referred at [14]–[24] above together with post-judgment interest.

The Judgment of the Federal Magistrate

27    After recounting the history of Ms Flint’s litigation with the respondent and the procedural history of her Application for Review in the Federal Magistrates Court, at [54] ff of his Reasons for Judgment, the Federal Magistrate addressed the Grounds of Review relied upon by Ms Flint in the Federal Magistrates Court. At [54]–[55], the Federal Magistrate said:

Grounds of Review

54.     Formally, the first matter to address is whether Ms Flint relies upon each of the eleven (11) grounds set out in her Application for Review, filed on 10th November 2011, or whether her submissions most recently filed on 28th September 2012 represent the totality of the grounds of her application to review the Registrar’s decision and orders of 19th October 2011. If the latter be the case, then she has formally abandoned her earlier grounds of review.

55.     Although, in my view, there is a strong argument that the most recent submissions set out the only grounds of review now pressed, for more abundant caution I will consider the other matters set out in her original application. I do so also notwithstanding that many if not most of the grounds claimed have already been the subject of much comment already in these reasons. I will deal primarily with the grounds and submissions in the Application proper. To the degree necessary, given what has already been or is otherwise addressed in these reasons, and because of the overlap between the grounds of review, I consider the remaining matters in the most recently filed submissions more by way of comment while dealing with the original submissions.

28    His Honour then moved to deal with Ms Flint’s claim that she had a cross-claim, set off or cross-demand within the meaning of s 41(7) of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act).

29    At [56], the Magistrate said:

Cross claim, set off or cross-demand

56.     Not for the first time, Ms Flint raises the alleged counter-claim against the Respondent in relation to the alleged negligent performance of legal services for her. I have stated already that (a) this claim has been dealt with –adversely to Ms Flint – by way of a contested hearing in the Local Court at Narooma, (b) the judgment in favour of the Respondent was the subject of an appeal to the District Court of NSW, and (c) this appeal was withdrawn by consent and an adverse costs order against Ms Flint was made. Ms Flint has stated on a number of occasions that the cross-claim in relation to the alleged professional negligence of the Respondent was/is being prepared for court. There is no evidence of any such preparation, or when it might see the light of day. In any event, it cannot succeed because the issue has already been the subject of determination.

30    To that succinct and accurate summary must be added the additional circumstance that Ms Flint’s attempt to set aside the second Local Court judgment was dismissed with costs on 11 August 2011.

31    After recording his views in relation to this ground in summary form at [56], the Federal Magistrate went on to consider the ground in more detail at [57]–[63].

32    At [70] of his Reasons for Judgment, the Magistrate began a consideration of the argument raised by Ms Flint to the effect that there had been a miscalculation in the Bankruptcy Notice.

33    The Magistrate concluded that Ms Flint had failed to establish that there was any miscalculation of the total debt due in the Bankruptcy Notice. In addition, and in any event, the Magistrate was of the view that any miscalculation was in small compass and was capable of remedy pursuant to s 306 of the Act.

34    At [77]–[82], the Magistrate dealt with an argument advanced by Ms Flint that the two certificates of determination issued pursuant to s 368 and s 369 respectively of the LPA were not final orders within the meaning of s 40(1)(g) of the Bankruptcy Act. The Magistrate rejected that argument.

35    At [83]–[88], the Magistrate considered Ms Flint’s “requests” that the Court go behind the two judgments which founded the Bankruptcy Notice. At [87], the Magistrate recorded that there was no evidentiary or legal justification to do so in the circumstances of the case before him.

36    For all of the above reasons, the Magistrate declined to set aside the Bankruptcy Notice.

Ms Flint’s Application in this Court

37    Ms Flint annexed to her affidavit in support of the present Application a draft Notice of Appeal from the decision of the Federal Magistrate. The grounds of appeal relied upon by Ms Flint in that draft Notice of Appeal are:

Grounds of appeal

1.     The Learned Federal Magistrate erred in in [sic] law determining as he did (para [30]) that the Certificates of Determination of costs issued by the Costs Assessor were:

(a)    issued by the Supreme Court; and

(b)     solely filed in a Court of competent jurisdiction under the provisions of s.368(5) of the Legal Profession Act 2004

where on the evidence before the Federal Magistrate:

(i)     the Certificates were issued by the Costs Assessor via the Manager, Costs Assessment in accordance with the provisions of the Legal Profession Act 2004 and not in fulfilment of any judicial function or activity of the Supreme Court of New South Wales; and

(ii)     two Certificates were lodged in respect of that part of the debt the subject of the Bankruptcy Notice, namely, the Certificate of Determination of Costs issued pursuant to the provisions of s.368(5) of the Legal Profession Act 2004 and a Certificate of Determination of Costs of the Costs Assessment issued pursuant to s.369 of the Legal Profession Act 2004; and

(iii)     where there was included in the certificate of judgement and amount in respect of registration costs of $150.00, which could not and did not form part of the final judgement or order arising either under the provisions of s. 368 or s. 369 of the Legal Profession Act 2004.

2.     To the extent that the Judgment said to have arisen as a consequence of the filing of the Certificates of Determination the Learned Trial Judge ought to have determined that:

(a)     to the extent that it included an amount referred to in a Certificate of Determination of Costs of the Costs Assessment in accordance with the provisions of s.369 of the Legal Profession Act 2004 the judgment was irregular as any such judgment arising by virtue of the provisions of s.369 of the Legal Profession Act 2004 would be payable to the “Manager Costs Assessment” and not to the respondent.

(b)     no order for restitution had ever been made in relation to such certificate in favour of the respondent;

(c)     no entitlement to recovery under a final judgment or order could properly exist in relation to the amount of such costs, the judgement arising not as a consequence of a justiciable act in the proceeding in which the certificate has been filed but rather by operation of the Legal Profession Act 2004; and

(d)    a registration fee or filing fee payable to the court in which the certificate of determination of costs properly filed does not and cannot form part of any judgment arising by virtue of the filing under the terms of the Legal Profession Act 2004.

3.     The Learned Federal Magistrate failed to have any or any proper regard to the operation of the provisions of s.369 of the Legal Profession Act 2004 (NSW).

4.     The Learned Federal Magistrate erred in law in failing to give any or any proper effect to the operation of the giving of a notice under s.41(5) of the Bankruptcy Act 1966 in respect of the judgment in Proceeding No: 05 of 2010 in the Local Court at Narooma arising upon the filing of Certificates of Determination of Costs of a Costs Assessor to the extent that such claim included a claim arising under the provisions of s.369 of the Legal Profession Act 2004 and a claim in respect of filing fee charged by the court in which the certificates were filed.

5.     The Learned Federal Magistrate erred in law in failing to go behind the judgment obtained in respect of the filing of Certificates of Determination including a claim for moneys which were not and could not ever be payable by the Applicant to the Respondent because of the operation of s.369 of the Legal Profession Act 2004 such inclusion constituting a miscarriage of justice (paras [35] and [86]).

6.     The Learned Federal Magistrate erred in law in failing to properly exercise his discretion in respect of going behind a judgment in circumstances where the Respondent was a legal practitioner and the Applicant was not legally represented and the claim sought to be made in relation to the Certificate of Determination issued in respect of costs of the Costs Assessment under the provisions of s.369 of the Legal Profession Act 2004 gave no entitlement to the Respondent at law to recover any amount from the Applicant.

7.     The Learned Federal Magistrate ought to have:

(a)     set aside the Bankruptcy Notice upon the basis of an overstatement within the terms of s.41(5) of the Bankruptcy Act 1966;

(b)     exercised his discretion to go behind the judgment arising by virtue of the filing of the two Certificates of Determination of Costs to the extent of the claim which included a Certificate of Determination of Costs of the Costs Assessment issued pursuant to s.369 of the Legal Profession Act 2004 and or the filing fee payable to the court, which was included in the certificate of judgement and as a consequence set aside the Bankruptcy Notice.

38    Those grounds of appeal were supported by a Written Submission annexed to Ms Flint’s affidavit and were further explained in oral submissions made to me at the hearing of Ms Flint’s application.

39    The grounds of appeal which Ms Flint ultimately indicated to the Court that she would rely upon, should she obtain an order extending the time within which to seek leave to appeal or to appeal from the Federal Magistrate’s decision, may be summarised as follows:

(a)    The Magistrate erred by compelling Ms Flint over her objection to deal with her Application for Review in the Federal Magistrates Court on the papers without a hearing in open court. She also complains that the Magistrate erred in not hearing in open court the Creditor’s Petition filed by the respondent after the decision made by District Registrar Wall. However, this point fell away as the Petition has not yet been heard.

(b)    The Bankruptcy Notice overstated the total debt due to the respondent from Ms Flint and was, for that reason, irregular, because there was included within each of the Local Court judgments an amount of $52.00 on account of a fee paid to the Local Court of NSW for the costs of issuing each Certificate of Judgment and the amount of $771.88, being the amount paid by the respondent to the Manager, Costs Assessment, in order to procure the release of the Certificate of Determination of Costs. The proposition embedded in this ultimate contention is that the Local Court of NSW does not have any statutory or other legal foundation which authorises it to charge such a fee.

40    Ms Flint also made submissions concerning the Creditor’s Petition in proceeding No CAG 61 of 2011. As I have already mentioned, although that matter has now been transferred to this Court, it remains unresolved pending the determination of the present Application.

Consideration

41    In DZAAD v Department of Immigration and Citizenship [2013] FCA 204, at [28]–[30] I said:

28    The Application is brought under r 36.05 of the Federal Court Rules 2011. As the Minister has submitted, r 36.05 confers upon a court a broad discretion whether or not to grant an extension of time. The considerations generally relevant in determining whether an extension of time should be granted are well known. They include the length of the delay, whether the applicant has provided an acceptable explanation for the delay, whether there is any prejudice to the respondents and the merits of the appeal if an extension is granted (Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment (1984) 3 FCR 344 at 348–349 (per Wilcox J); Jess v Scott (1986) 12 FCR 187 (per Lockhart, Sheppard and Burchett JJ); Parker v The Queen [2002] FCAFC 133 at [6] (per Spender, O’Loughlin and Dowsett JJ); Peck v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] FCA 810 at [16]–[27] (per Foster J); SZQBI v Minister for Immigration and Citizenship [2011] FCA 1388 at [16]–[25] (per Cowdroy J)).

29    The Minister has, quite properly, accepted that, given the short delay involved in the present case and the difficulties confronting the applicant as an unrepresented litigant in circumstances where he had family separation issues with which to deal as well as a move to Canberra, the applicant has more than adequately explained any delay in instituting his appeal. The Minister, nonetheless, opposes the grant of an extension of time on the basis that the appeal which the applicant seeks to file has no prospect of success. The Minister submitted that an extension of time, even for a short period, may be refused if an appeal has no prospect of success (as to which, see Vu v Minister for Immigration and Citizenship (2008) 101 ALD 211 at 216 [14] per Jessup J with whom Gyles and Besanko JJ agreed).

30    It would be a proper exercise of the Court’s discretion to refuse the extension of time which has been sought if the appeal has no prospect of success, even if the delay is a short one.

42    That brief statement of the relevant principles is apt to be applied in the present case, although Ms Flint has an additional difficulty because, in my judgment, she has not satisfactorily explained the delay in filing her appeal process. She was, after all, being advised throughout the relevant period by Sydney Counsel experienced in bankruptcy matters who must be taken to be very familiar with the relevant provisions of the FCR. Ms Flint’s explanation for missing the deadline for filing her appeal process is that she was mistaken as to when that deadline was. This is not a satisfactory explanation for the delay in the present case.

43    Notwithstanding the absence of a satisfactory explanation for her delay, I prefer to rest my refusal of Ms Flint’s application for an extension of time on the proposition that the grounds of appeal upon which she intends to rely have no prospect of succeeding.

Proposed Ground 1 (Hearing in Chambers)

44    The Federal Magistrate endeavoured to afford to Ms Flint a hearing of her Application for Review in open court. On two occasions, he fixed that application for hearing before him in open court. However, for reasons which need not now be gone into, those fixtures were both vacated. Nonetheless, as is apparent from the Reasons for Judgment of the Federal Magistrate (at [64]–[65]), the Federal Magistrate gave Ms Flint every opportunity to present her case as fully as she chose. She had every opportunity to file evidence in support of her application for review and to make whatever submissions she chose to make. On the evidence before me, she plainly took that opportunity.

45    On the present application, she conceded that the Magistrate had power to deal with her Application for Review on the papers but complained that he did not give her a fair opportunity to put her case.

46    This proposed ground of attack on the Magistrate’s decision is not supported by the evidence tendered before me. I reject Ground 1.

Proposed Ground 2 (Misstatement of Debt)

47    This proposed ground is based upon the decision of Hely J in Croker v Commissioner of Taxation (2005) 145 FCR 150 (Croker).

48    In that case, Hely J upheld the contention made by Mr Croker that the Bankruptcy Notice served upon him with which his Honour was dealing was invalid as it overstated the quantum of his debt to the Commissioner of Taxation by an amount of $63.00 and by a further sum being the proportion of the interest claimed which was referable to the inclusion of the $63.00 in the amount of the judgment. At 152–153 [10]–[15], his Honour said:

10    Mr Croker’s contention that the amount of the debt as claimed in the bankruptcy notice is overstated should be accepted. That is because s 208J(3) of the LPA specifies the consequences of filing a certificate in the Local Court, namely that the certificate is taken to be a judgment of that Court for the amount of the unpaid costs, ie a judgment for $12,972.30. Mr Melrose, the solicitor for the Commissioner, was unable to point to any legislative or regulatory provision which would authorise entry of judgment in the sum of $13,035.30. My attention was not directed to any provision equivalent to s 107(1)(a) of the Service & Execution of Process Act (Cth) which, in cases to which it applies (and the present is not such a case) allows recovery of the costs and expenses incidental to the lodging of a copy of the judgment in an appropriate Court of a State other than the place of rendition.

11    The Local Court has issued a certificate said to be under the Local Courts (Civil Claims) Act 1970 (Pt 26 r 7) that the records of the Local Court contain an entry to the effect that the plaintiff recovered judgment against the defendant on 1 September 2004. The Local Courts (Civil Claims) Act does not contain a Part 26 rule 7 and Mr Melrose was unable to refer me to any statutory or regulatory provision which authorised the issue of the certificate of judgment.

12    There have been cases such as Bhattacharya v Berger [1999] FCA 883 (on appeal Bhattacharya v Milne Berry & Berger [1999] FCA 1302) where the Court has 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 my attention has not been directed to any case in which the issue has been squarely argued or decided.

13    In Croker v Federal Commissioner of Taxation (2003) 52 ATR 226 the Full Court said of a certificate such as the present (at 230):

‘The purported “registration” of such a certificate as a judgment by the registrar of the Local Court is 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.’

14    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.

15    Mr Melrose conceded that Mr Croker had given notice to the Commissioner in accordance with the provisions of s 41(5) of the Bankruptcy Act 1966 (Cth) (‘the Bankruptcy Act’), but submitted that the bankruptcy notice should not be set aside because it was not likely to mislead, as Mr Croker was aware of the error. However, in Walsh v Deputy Federal Commissioner of Taxation (1984) 156 CLR 337 Gibbs CJ (with whom the other members of the Court agreed) said (at 339):

‘There is no doubt that a bankruptcy notice will be invalid if the sum specified in the notice as the amount due to the creditor exceeds the amount for which the creditor is entitled to issue execution, provided that the debtor gives timely notice under s. 41(5) of the Bankruptcy Act 1966 (Cth), as amended, that he disputes the validity of the notice on that ground.’

49    Mr Croker had given an appropriate notice of his point pursuant to the provisions of s 41(5) of the Bankruptcy Act.

50    The reasoning in Croker was applied by Raphael FM in Lord v Rankine [2010] FMCA 668 at [10]–[15]. His Honour applied the reasoning in Croker notwithstanding that the rules of procedure governing the relevant circumstances had changed between the date when Croker was decided and the date when his Honour came to deal with Lord v Rankine. At the end of [13], his Honour said:

His Honour [referring to Hely J in Croker] set aside the bankruptcy notice. Although the UCPR and Regulations have overtaken the legislation under which Croker was considered, there is in my view still no power to add the amount of the fee. I do not believe that the charging of the fee constitutes an award of costs and whilst the situation may be unsatisfactory it is one that can be easily cured by amendment to the legislation. In the instant case the applicants have filed a notice under s.41(5) of the BA that there has been an overstatement in the amount of the bankruptcy notice. I am satisfied that it is appropriate in all the circumstances to set aside the bankruptcy notice on this ground.

51    The creditors appealed the decision of Raphael FM. On appeal (Rankine v Lord (2011) 9 ABC(NS) 142), Marshall J dismissed the appeal. At 148–149 [38]–[40], his Honour said:

38    The notice took into account the sum of $150, being the fee paid to the Local Court by the appellants for filing the costs certificate. The Local Court was not authorised to issue a certificate of judgment in an amount which included the filing fee. It was confined to issuing a certificate of judgment in an amount equal to the costs order. Croker v Commissioner of Taxation [2005] FCA 127 applies to the circumstances of this case. As Hely J said at [10], the consequence of filing a certificate in the Local Court under s 208J(3) of the Legal Profession Act 1987 (NSW) is that the certificate is taken to be a judgment of the Local Court for the amount of unpaid costs. There was no authorisation to add any further amount to that judgment debt.

39    Justice Hely at [15] referred to the judgment of Gibbs CJ in Walsh v Deputy Federal Commissioner of Taxation (1984) 156 CLR 337 at 339, where his Honour expressed no doubt that a bankruptcy notice will be invalid if the sum specified at the amount due exceeds the amount for which the creditor is entitled to issue execution, subject to s 41(5) of the Act. As referred to at [17] above, s 41(5) was enlivened by the respondents in this matter.

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.

52    The reasoning in Rankine v Lord was followed by Smith FM in Dennis v Miller (2012) 257 FLR 64.

53    Ms Flint focuses upon three amounts which she contends were improperly included in each of the Local Court judgments which are the foundation of the Bankruptcy Notice. Those amounts are:

(a)    The amount of $52.00, being a fee paid to the Local Court of NSW for the issue of a Certificate of Judgment included in the first of the Local Court judgments (ie the judgment given on 1 May 2009);

(b)    The amount of $52.00, being the same fee included in the second judgment (ie the judgment registered on 10 May 2010); and

(c)    The amount of $771.88, being the amount claimed by the respondent against Ms Flint as the amount which the respondent paid to the Manager, Costs Assessment, in order to obtain the release of the Costs Assessor’s Determination.

54    It was also suggested during argument that there was a further amount of $150.00 included in the second judgment which was also a fee paid to the Local Court of NSW. The evidence as to the inclusion of such an amount was scant. I am not satisfied that there was yet another Court fee of $150.00 included in the second Local Court judgment as Ms Flint suggests.

55    The contentions now being advanced by Ms Flint were not advanced in the Federal Magistrates Court nor were they argued before District Registrar Wall. Furthermore, Ms Flint has given no notice pursuant to s 41(5) of the Bankruptcy Act of any challenge to the Bankruptcy Notice based upon any misstatement of the debt.

56    In my judgment, even if the points Ms Flint now seeks to argue were arguable (a matter to which I shall return shortly), her failure to raise them before the Federal Magistrate and her failure to give the requisite notice pursuant to s 41(5) of the Bankruptcy Act would be fatal to the contentions which she now seeks to raise. The present case is distinguishable from Croker, even if Croker remains good law, because, in Croker, Mr Croker had served a s 41(5) notice whereas, in the present case, Ms Flint has not.

57    In my judgment, there is a real question as to whether Croker was correctly decided (as to which see Olivieri v Stafford (1989) 24 FCR 413 and Emerson v Wreckair Pty Ltd (1992) 33 FCR 581).

58    Furthermore, Croker was decided prior to the enactment of the Civil Procedure Act 2005 (NSW) (the Civil Procedure Act) and the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR). Croker was decided on 24 February 2005 and the Civil Procedure Act and the UCPR came into force, for the most part, on 15 August 2005.

59    In New South Wales, the Civil Procedure Act and the UCPR apply to the Supreme Court of New South Wales, the District Court of New South Wales and Local Courts in New South Wales, although not all provisions apply to all courts.

60    Section 368 of the LPA provides for the assessment of costs and the issue of a certificate as to determination of costs. Section 368(5) provides that, 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. It also provides for the payment of interest thereon.

61    Section 369 of the LPA provides for the filing of a certificate of determination in respect of the costs of the costs assessor’s costs of a Costs Assessment.

62    Rule 36.10 UCPR sets out a procedure for the filing of a costs assessor’s certificate and r 36.11 UCPR provides for the entry of a judgment based upon such a certificate.

63    In particular, r 36.11(3) provides:

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.

64    Section 133 of the Civil Procedure Act provides:

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.

65    A certificate issued under s 368 of the LPA or under s 369 of the LPA would fall within s 133(2)(b) and r 36.11(3).

66    There is no material difference between the provisions of the Legal Profession Act 1987 (NSW) considered by Hely J in Croker and the current provisions of the LPA in terms of the way in which certificates of assessment are to be enforced.

67    Civil Procedure Amendment (Fees) Regulation 2010 (2010 No 327) (NSW) (the Fees Regulation) applied in respect of both Local Court judgments relied upon by the respondent in the present case. Pursuant to that regulation, the Local Court of NSW was entitled to charge $52.00 for “… furnishing one or more sealed or certified copies of a judgment or order …” (see Pt 5 [Miscellaneous court fees], Item 6).

68    When regard is had to the terms of s 133 of the Civil Procedure Act, the terms of r 36.10 and r 36.11 of the UCPR and the relevant item in the Fees Regulation, there is a proper statutory foundation for the levying of the two amounts of $52.00 levied in the two Local Court judgments in the present case. That statutory foundation is not found in the LPA but is rather to be found in the Civil Procedure Act and the UCPR.

69    The amount of the second Local Court judgment included the sum of $771.88, being the amount which the respondent was obliged to pay, in the end, to the Manager, Costs Assessment, in order to release the relevant Certificate of Costs Assessment. The Costs Assessor had determined that each of the warring parties should pay half the costs of the Costs Assessment and issued a Certificate of Determination reflecting that view. There is nothing in s 369 of the LPA which allows the Manager, Costs Assessment, to decline to release the Certificate of Determination or Reasons for Determination simply because one of the parties has not paid his, her or its share of the costs of the Costs Assessment. Section 369(3)(c) simply provides that, in the circumstances of the present case, the costs of the Costs Assessment be paid by such persons, and to such extent, as may be determined by the Costs Assessor.

70    For the above reasons, the substance of the matter appears to be this: The Local Court has been persuaded to include within the judgment which it issued not only the amount of the costs as assessed pursuant to the Certificate of Determination issued pursuant to s 368 of the LPA, but also to include within the judgment the amount of $771.88 as a debt due from Ms Flint to the respondent. It is not at all apparent to me, on the evidence tendered before me on the present application, whether the inclusion of that amount in the judgment issued by the Local Court, was included pursuant to some default procedure of that court or for some other reason. However, the inclusion of this amount is not in the same category as the inclusion of an unauthorised fee payable to the Local Court itself. On the material before me, the respondent probably had a good case for a restitutionary claim in the amount of $771.88 by reason of the circumstances in which that amount was paid. In any event, Ms Flint attempted to set aside the second Local Court judgment and failed in her attempt to do so.

71    It is not for me now to look behind the Local Court judgment in respect of that amount. In any event, I cannot do so when Ms Flint has not given an appropriate notice pursuant to s 41(5) of the Bankruptcy Act.

Conclusions

72    For all of the above reasons, I consider that Ms Flint’s prospects of success in respect of the matters which she wishes to argue in support of leave to appeal or on appeal should she be granted an extension of time have no prospect of succeeding. In those circumstances, I refuse her application for an extension of time.

73    I propose to dismiss Ms Flint’s application with costs.

Associate:

Dated:    25 March 2013