Dubow v Fitness First Australia Pty Ltd; Fitness First Australia Pty Ltd v Dubow
[2012] NSWSC 128
•27 February 2012
Supreme Court
New South Wales
Medium Neutral Citation: Dubow v Fitness First Australia Pty Ltd; Fitness First Australia Pty Ltd v Dubow [2012] NSWSC 128 Hearing dates: 20/10/2011; 18/11/2011 Decision date: 27 February 2012 Before: Garling J Decision: (1) Stay of Hulme J's costs order in SC 30095/2005 subsists.
(2) Pursuant to the Deed dated 5 November 2010, Fitness First Australia Pty Ltd was released from the effect of and liability for and in respect of the Hulme J costs order in SC 30095/2005.
(3) Consequential relief ordered in each proceeding.
(4) Ms Dubow to pay Fitness First Australia Pty Ltd's costs of each proceedings.
Catchwords: CIVIL - complex and intertwined litigation history between parties - Order for costs in favour of one party stayed until further order - Certificates of costs issued - Deed of release entered - Costs certificates later registered as judgment in supreme court - Whether the stay on the execution of the orders for costs until further order subsists - Costs assessor not a judicial officer - Issuing of costs certificates does not amount to further order of Supreme Court - Construction of deed of release Legislation Cited: Legal Profession Act 2004
Local Court Act 2007
Supreme Court Act 1970
Uniform Civil Procedure Rules 2005Cases Cited: Cassegrain v CTK Engineering [2008] NSWSC 457
Codelfa Constructions Pty Ltd v State Rail Authority of NSW [1982] HCA 24; 149 CLR 337
Dubow v Fitness First Australia Pty Ltd [2007] NSWSC 1390
Dubow v Fitness First Australia Pty Ltd; Fitness First Australia Pty Ltd v Dubow [2011] NSWSC 1357
Dubow v Fitness First Australian Pty Ltd [2007] NSWSC 935
Sindel v Georgiou [1984] HCA 58; 154 CLR 661
Grant v John Grant & Sons Pty Ltd [1954] HCA 23; 91 CLR 112
Hall Chadwick v Doyle [2006] NSWSC 1195
Khan v Jenni Mattila & Co Lawyers [2011] NSWSC 71
McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; 203 CLR 579
Western Export Services Inc v Jireh International Pty Limited [2011] HCA 45
Wilkie v Gordian Runoff Ltd [2005] HCA 17; 221 CLR 522Category: Principal judgment Parties: Yolande Victoria Frances Dubow
Fitness First Australia Pty LtdRepresentation: Counsel:
Yolande Dubow (in person)
B M Green (Fitness First Pty Ltd)
C Mantziaris (2D in 2011/211563 on 20/10/2011)
File Number(s): 2011/39253 2011/39995 2011/152563 2011/211563 Publication restriction: Nil
Judgment
In July 2004, Yolande Victoria Frances Dubow commenced proceedings in the General Division of the Consumer, Trader & Tenancy Tribunal (CTTT) against Fitness First Australia Pty Ltd (FFA). Those proceedings were heard on 1 and 2 March 2005. At the conclusion of Ms Dubow's case, she withdrew her application to the CTTT.
FFA sought an order for costs and in due course, on 5 May 2005, the CTTT ordered that Ms Dubow pay 75 per cent of FFA's costs.
The actual dispute between the parties that was before the CTTT, the details of it and the rights and wrongs of each party have now been lost in time. Since 2005, in a number of courts and in a variety of ways, Ms Dubow and FFA have been engaged in litigation dealing with the costs order made by the CTTT on 5 May 2005.
On 18 November 2011, I embarked upon the hearing of four matters that had been commenced in the Supreme Court of NSW. Two of these were commenced by Ms Dubow, and two by FFA.
The matters were heard together and the evidence in one matter was ordered to be the evidence in all matters.
This judgment deals with the issues raised in those four matters and decides each of them.
Relevant History
In order to understand the four proceedings with which this judgment deals, it is necessary to trace the events, which have resulted in the claims made in the various proceedings.
I do not pretend that this is a complete history of every interaction between the parties. Such a history would require a judgment of undue length and is unnecessary.
The starting point is that on 5 May 2005, as I have said above, the CTTT ordered Ms Dubow to pay 75 per cent of FFA's costs of the proceedings in the CTTT.
On 29 September 2005, Ms Dubow, although out of time, commenced proceedings in the Supreme Court of NSW against FFA as first defendant and the CTTT, as second defendant, seeking the following orders:
(1) Leave to appeal against the decision of the CTTT dated 5 May 2005;
(2) A stay of the CTTT's decision to order Ms Dubow to pay 75 per cent of FFA's costs;
(3) An order in the nature of certiorari setting aside the decision of the CTTT allowing legal representation for the first defendant.
Ultimately the summons, in an amended form, was heard by Hulme J in October and November 2006. It will be convenient to refer to these proceedings as the Hulme J proceedings.
On 24 August 2007, Hulme J delivered judgment: Dubow v Fitness First Australian Pty Ltd [2007] NSWSC 935. His Honour decided, for the reasons which he canvassed in the course of the judgment, that the Tribunal's order for costs ought be set aside and that the matter ought be remitted to the CTTT to be determined according to law. He called for further submissions as to the terms of the orders which he ought to make.
On 5 December 2007, Hulme J published a judgment and set out the orders he proposed to make: Dubow v Fitness First Australia Pty Ltd [2007] NSWSC 1390.
His Honour gave effect to his determination that the decision of the CTTT should be set aside by making orders which extended the time for Ms Dubow to appeal from the CTTT decision of 5 May 2005 and quashing the order of the CTTT that Ms Dubow pay 75 per cent of the costs of FFA.
He came to consider the question of costs of the proceedings before him. He said this:
"32. It remains to formulate the order for costs in favour of the Plaintiff that should be made. When regard is had to the totality of the factors relevant, in particular those referred to in paragraph 8 above and that the Plaintiff should be responsible in some way for the costs of amendments, the First Defendant should be ordered to pay half of the Plaintiff's costs of the proceedings.
33. I am conscious that in effecting a notional set off rather than making a more generous order in favour of the Plaintiff and another order in favour of the Defendant, I am placing an impediment in the way of at least some of the orders that at least theoretically could be made under s 99 of the Civil Procedure Act . However, I have indicated that there are other reasons for not giving any more time for orders under that section to be made and the course I have adopted means that only one assessment of costs of the appeal rather than two will be necessary."
Although Hulme J made some orders in his judgment of 5 December 2007, they were incomplete.
Ultimately on 8 February 2008, Hulme J completed the making of these formal orders, insofar as the costs of the proceedings before him:
"(iii) ... plaintiff pay the costs of Fitness First Australia Pty Ltd of the application for the assessment of the costs ordered on 5 May 2005 to be paid, insofar as such costs were incurred on 2 June and prior to, but not including, 18 October 2005 for work actually carried out or events that occurred during that period.
(iv) Order that the First Defendant [FFA] pay half of the Plaintiff's costs of these proceedings, as assessed or agreed.
(v) Stay any execution of orders (iii) and (iv) until further order, providing however that such stay shall not operate to prevent the assessment of costs pursuant to those orders or the taking of any steps incidental thereto."
I will refer to these orders, for convenience, as the Hulme J costs order.
There has been no appeal from either of the judgments, or from any of the orders made by Hulme J. All of those orders remain in place.
Not without some difficulty, Ms Dubow sought to have the quantum of the costs to which she was entitled as a consequence of the Hulme J costs order, assessed.
The application for assessment of party/party costs was made on 7 August 2009 by Ms Dubow. It was made to the Manager Costs Assessment, and sought an assessment of costs in accordance with the provisions of the Legal Profession Act 2004.
The Manager, Costs Assessment allocated assessment number 2009/11832 to the assessment application. The application had attached to it the judgment of Hulme J, which made the final orders, namely, [2007] NSWSC 1390. The terms of the filed Bill of Costs make it plain that the costs sought to be assessed were pursuant to the Hulme J costs order.
On 9 November 2010, Mr Vincent Goldrick, a costs assessor, issued a Certificate of Determination of Costs. That certificate is provided for by ss 367A, 368 and 369 of the Legal Profession Act . Mr Goldrick assessed that a fair and reasonable amount of the costs to be paid by FFA to Ms Dubow in accordance with the Hulme J costs order was $28,127.48. The Manager, Costs Assessments sent the certificate to the parties on 30 November 2010.
As well, pursuant to s 369 of the Legal Profession Act , on 9 November 2010, Mr Goldrick assessed the costs of the costs assessment process to be $3,398.16 and issued a Certificate accordingly. That Certificate was also sent by the Manager Costs Assessment to the parties on 30 November 2010.
It will be convenient to refer to both of these certificates as the Costs Certificates.
On 7 December 2010, Ms Dubow forwarded a document to the Local Court which was entitled "Registration Filing of Certificate of Judgment/Order".
On 16 December 2010, the Local Court entered judgment in favour of Ms Dubow and against FFA for a total sum of $31,603.64, which was the sum claimed on the Registration Filing document, and it noted that the sum represented the amount of the costs assessment which was on the Costs Certificates, which were registered at the Local Court.
During the course of taking of these steps, and as a result of negotiations between the parties, a Deed of Release was entered into between Ms Dubow and FFA. That Deed was signed by Ms Dubow and was dated 5 November 2010.
The terms of the Deed will need to be discussed in due course, as will the manner of its entry and the date upon which it took effect. It is sufficient at this stage to say that according to Recital E in the Deed, the parties agreed to resolve all issues between them. That, of course, is not necessarily the end of the matter because the Court needs, in accordance with principle, to examine to the terms of the Deed, and to understand what matters were in the contemplation of the parties and hence encompassed by the Recital and terms of the Deed.
However, by reason of the judgment issued by the Local Court on 16 December 2010, and Ms Dubow's attempts to enforce it, the four proceedings to which I will now turn, have been commenced.
Proceedings: 2011/39995: Dubow v FFA
On 7 February 2011, Ms Dubow filed a summons which commenced proceedings in the Administrative Law List of the Common Law Division of the Supreme Court, seeking to appeal, pursuant to s 39(1) of the Local Court Act 2007 against the decision of Magistrate Townsden of the Local Court of 20 January 2011.
In that decision, Magistrate Townsden made orders that the judgment which had been entered by the Local Court on 16 December 2010, on the filing of the Costs Certificates, ought be set aside. He also made an order under r 13.4 of the Uniform Civil Procedures Rules 2005 that the whole of the proceedings be dismissed, and ordered that Ms Dubow pay FFA the sum of $1,000 by way of costs.
A reading of the transcript of the proceedings before Magistrate Townsden and of his decision, demonstrates that the basis for his decision was his interpretation of the Deed of Release dated 5 November 2010.
The magistrate's decision is challenged and the relevant order sought is that the whole of the decision of Magistrate Townsden of 20 January 2011 be quashed and that there be a consequential order for costs.
Proceedings: 2011/39253: Dubow v FFA
No doubt as a response to that decision, and because she no longer had an enforceable judgment based upon the Costs Certificates, on 7 February 2011, Ms Dubow filed the Costs Certificates in the Supreme Court and sought that judgment be entered upon them. The proceedings were allocated number 2011/39253.
By reason of the filing of the Certificates, judgment was entered against FFA in accordance with the Costs Certificates.
On 17 February 2011, Ms Dubow applied to the Supreme Court for the issue of a garnishee order against the National Australia Bank, on the basis of the existence of the judgment debt, because the NAB held a banking account for FFA.
In her affidavit of 17 February 2011 filed in support of her application for the garnishee order, Ms Dubow affirmed that:
"8. The judgment is not stayed by an order of the court, by an instalment order or by a suspension under s 377(1) or 386(1) of the Legal Profession Act 2004 that has not been entered."
On 8 March 2011, FFA was granted leave to file in Court a notice of motion, in which orders were sought restraining Ms Dubow from proceeding further to enforce the judgment debt of 7 February 2011 and seeking orders that the judgment be set aside.
Adams J on that day, granted an order, until further order, staying any further execution of the judgment entered on 7 February 2011 and made consequential orders.
The basis upon which FFA sought orders setting aside the judgment of 7 February 2011 and staying its execution, appear from the affidavit of its solicitor Mr Orlitzki sworn 8 March 2011. In that affidavit, Mr Orlitzki noted that the Hulme J costs order had been the subject of a stay until further order. He further described the circumstances surrounding the Deed of Release dated 5 November 2010.
He also referred at some length to the stay ordered by Hulme J on 5 December 2007. He noted in his affidavit that:
"No further order has been made in the Supreme Court, so the execution of the costs order remains stayed."
He further drew attention to the fact that in the Hulme J proceedings, Ms Dubow had filed a Notice of Motion seeking a removal of the stay. He then noted the disposition of that notice of motion in the following terms:
"The Plaintiff's Notice of Motion is [sic] listed for directions on 22 February 2011. I am informed by Rodney Kent, a partner of my firm, and verily believe that:
(a) on 22 February 2011, he appeared before Registrar Bradford at a directions hearing;
(b) on that occasion, the Plaintiff appeared for herself;
(c) the Plaintiff advised the Registrar that she wished to 'withdraw' the Notice of Motion;
(d) Registrar Bradford dismissed the Notice of Motion."
Proceedings 2011/152563: FFA v Dubow
On 10 May 2011, FFA filed a summons seeking leave pursuant to s 385(2) of the Legal Profession Act , to appeal against the determinations of Mr Vincent Goldrick, the costs assessor, to issue each of the Costs Certificates on 9 November 2010.
The summons sought by way of relief that the amount of $Nil be substituted for the amount which the Costs Assessor had fixed.
The basis for the appeal seems to be that the terms of the Deed of Release of 5 November 2010 compelled the relief sought. The terms of Schedule A to the Deed would appear to reflect the orders sought in these proceedings.
Proceedings 2011/211563: FFA v Dubow & Anor
In this proceeding, FFA filed a summons on 29 June 2011 seeking relief pursuant to s 69 of the Supreme Court Act 1970 by way of orders in the nature of certiorari, quashing the Costs Determinations of Mr Goldrick.
Additionally, the summons sought the following relief:
"3. In the alternative to prayers 1 and 2 above, pursuant to s 69 of the Supreme Court Act 1970 (NSW), orders in the nature of prohibition - prohibiting (through injunction) the First Defendant from enforcing and/or executing the First and Second Costs Assessment.
4. A declaration that the Deed dated 5 November 2010 between the Plaintiff and the First Defendant (the 'Deed') is valid and binding.
5. A declaration that upon the true construction of the Deed, the First Defendant has released the Plaintiff in respect of the effect of and liability in respect of the orders for costs made by Hulme J on 5 December 2005 in proceedings 30095 of 2005.
6. A declaration that, upon the true construction of the Deed, the First Defendant has released the Plaintiff in relation to the effect of and liability in respect of the Costs Assessment (in respect of the orders for costs made by Hulme J on 5 December 2005 in proceedings 30095 of 2005), including any Certificate of Determination of Costs or Certificate of Determination of Costs of Costs Assessment, other than a Certificate of Determination of Costs and Certificate of Determination of Costs of Costs Assessment in terms of Schedule A to the Deed.
7. A declaration that the Plaintiff is entitled to have the Deed specifically performed and carried into execution.
8. An order that the First Defendant specifically perform and carry into execution the Deed by signing letters in terms of Schedule A to the Deed to the Second Defendant and The Manager, Costs Assessment and providing same to the Plaintiff's solicitors.
9. In the alternative, an order restraining the First Defendant, and by her servants and agents, from registering or taking any further action in relation to the First and Second Costs Assessments."
Consequential orders were sought.
In addition to Ms Dubow being a defendant in these proceedings, the Costs Assessor, Mr Goldrick, was also joined as a defendant. He has filed a submitting appearance and consents to any order of the Court except an order as to costs.
Procedural Orders
On 11 July 2011, all four of these matters came before Hoeben J. He made a series of orders which included the following:
"6. Evidence in one matter will be evidence in all matters.
...
8. I order that the four matters involving Fitness First and Ms Dubow as parties which are currently in the Supreme Court be fixed for hearing to be heard together, the evidence of one being evidence in the other, for two days commencing 20 October 2011."
On 20 October 2011, all four proceedings came before me for hearing. On that day, for the reasons which I delivered ex tempore: Dubow v Fitness First Australia Pty Ltd; Fitness First Australia Pty Ltd v Dubow [2011] NSWSC 1357, I determined that the hearing of the proceedings would be vacated and the proceedings adjourned for directions to Wednesday 14 December 2011.
The basis for that adjournment was that, as Ms Dubow had lodged a Statement of Assets and Liabilities with the Insolvency and Trustee Service of Australia, it was likely that her estate would be sequestrated and there was little purpose to be served in pursuing the proceedings. I reserved liberty to apply in the event that the matters did not proceed as anticipated.
Subsequently, the Court was informed that Ms Dubow had withdrawn her application to the Insolvency and Trustee Service of Australia and, accordingly, the Court listed the matters for hearing on 18 November 2011.
All of the matters proceeded on that day, with evidence being tendered in all four matters and all four matters being heard together. At the conclusion of the hearing I reserved judgment.
Issues
As is apparent from the review of the procedural history which has lead to these four proceedings, there are a number of central issues, the determination of which will affect the outcome of each of the proceedings that were heard by me.
As I see it, those issues are:
(a) whether the stay on the execution of the Hulme J costs order still subsists, or whether, as Ms Dubow submits, there has been a "further order" of the Court which has the effect of terminating that stay; and
(b) the true meaning and effect of the Deed of 5 November 2010, and, in particular:
(i) when the Deed came into effect;
(ii) whether Ms Dubow has released FFA from any liability in respect of the Hulme J costs order; and
(iii) whether the terms of the Deed preclude Ms Dubow from enforcing the Costs Certificates issued by Mr Goldrick.
It will be necessary to deal with each of these issues in turn.
The Stay Issue
It is clear from the terms of the orders which Hulme J made, which are set out at [16] above, that he stayed the execution of the orders for costs. Hulme J exposed his reasons for that stay order, in his judgment of 5 December 2007: Dubow v Fitness First Australia Pty Ltd [2007] NSWSC 1390, Hulme J said at [25]:
"There is much to be said for the view that the parties' respective entitlements to costs - at least those arising from events in this court - should be set off before payment is required. In these circumstances I am disposed to adhere to the approach taken in my reasons of 14 September but staying any orders for a time so as to enable such set off to be effected prior to payment being made."
From this paragraph, I derive the conclusion that Hulme J contemplated that there was to be a set-off made between the respective entitlements to costs so that it could be determined that only a single sum was due by either Ms Dubow to FFA, or FFA to Ms Dubow. In other words, the set-off was to be effected before payment was made and hence, necessarily, before any step or steps were taken to execute, or otherwise enforce the Hulme J costs order.
The costs orders which Hulme J actually made are set out at [16] above. The terms of the orders make plain that the conclusion which I have just expressed was given clear effect to, on the Court's record. The orders were binding on the parties.
I observe that, in order to enable the set-off to be calculated, it was both necessary, and appropriate, for the reasonable monetary sum of the Hulme J costs order, in the absence of agreement, to be the subject of the costs assessment process and an ultimate determination.
On 29 June 2009, Ms Dubow sent an email to the Associate to Hulme J which included the following:
"Would it be possible for Justice Hulme to list this matter to consider the finalization of orders so that the Party Party Costs can be assessed"
On 1 July 2009, there was an exchange of emails between the solicitors for FFA and Ms Dubow. In her email, Ms Dubow wrote in part:
"The orders as they currently stand are stayed in relation to the costs payable by Fitness First: there is also the incomplete orders as to time for which Fitness First is entitled to set off costs."
Although in the second part of that sentence there seems to be some doubt about the effect of the provision for set-off in Hulme J's orders, the terms of the email make it absolutely clear that Ms Dubow knew of, and appreciated the effect of the order made by Hulme J staying the costs order which he had made.
The application foreshadowed in the email of 29 June 2009 did not proceed, apparently because Ms Dubow was informed that if she wished to have the stay lifted, it would be necessary for her to file a notice of motion.
I further observe that the terms of this email sent by Ms Dubow, make it quite clear that she was aware that the stay of the Hulme J costs order subsisted.
On 8 November 2010, Ms Dubow filed a notice of motion in the Hulme J proceedings (which was dated 30 September 2010). The notice of motion sought the removal of the stay of the orders made by Hulme J. It was this notice of motion which was ultimately dismissed by consent on 22 February 2011 by the Registrar.
Also filed on that day was an affidavit of Ms Dubow in support of the notice of motion. In that affidavit, Ms Dubow deposed to the fact that she was at court on 5 December 2007 when orders were first made by Hulme J. This statement confirms my earlier conclusion that she was aware, at all relevant times, that those orders included a stay of the execution of the costs order. Ms Dubow also deposed that she was not aware of the content of the February 2008 orders until 18 February 2010. However, the formalising of the orders which occurred in February 2008 did not effect any change to the stay of the Hulme J costs order.
It was common ground before me that Hulme J has not made any order that the stay imposed, initially in December 2007, and then in February 2008, be lifted. It was also common ground before me that no other judge of the Supreme Court has made an order providing for that stay to come to an end. As well, it is clear that the parties have not filed any consent order providing that the stay of the Hulme J costs order, come to an end.
In the context of this apparently clear state of the orders of this Court, Ms Dubow submitted to me that the stay had in fact come to an end, as a consequence of the operation of the costs assessment process, so that when the Costs Certificates were issued, this carried the consequence that the stay had come to an end because the Certificates were capable of being filed, without more in the Supreme Court, or any other court of competent jurisdiction, and thereupon they became registered as a judgment. Ms Dubow argued that the effect of this was that since judgment could be obtained, the certificate of the Costs Assessor amounted to an order of the Court terminating the stay.
I reject that view. It is simply erroneous, because it fails to take account of the fact that the costs assessment process is not carried on by, nor is it a process which is any part of the Supreme Court, unless there is an appeal to the Supreme Court initiated by one of the parties in accordance with statute.
The system and procedures for the assessment of cost is created by statute. Part 3.2 of the Legal Profession Act contains the relevant statutory provisions.
Section 301 of the Legal Profession Act records as one of the purposes of Part 3.2, this:
"(d) to provide a mechanism for the assessment of legal costs and the setting aside of certain costs agreements."
In the circumstances which existed, as a result of the Hulme J costs order, Ms Dubow was entitled, by s 353 of the Legal Profession Act , to apply to the Manager, Costs Assessment " for an assessment of the whole of, or any part of ..." the costs ordered to be paid to her by FFA. She did so.
The provisions of Division II of Part 3.2 of the Legal Profession Act are then engaged by such an application. The statute provides for how the assessment is to be undertaken, by whom and against which criteria. The provisions of Subdivision 3 of Division 11 have particular relevance because they deal specifically with the assessment of party/party costs ordered to be paid by a court or tribunal.
Section 372 provides that the determination by a costs assessor is binding on all parties. It limits any appeal from such a determination to that provided by the Legal Profession Act itself. Subdivision 6 permits an appeal against the decision of a costs assessor, as of right on a matter of law, to the District Court. A broader appeal, which is by way of a rehearing, is permitted with the leave of the District Court, or else of the court or tribunal which made the order for costs.
The undertaking of a costs assessment is carried out by costs assessors who are appointed in accordance with the Legal Profession Act , and upon appointment are subject to the provisions of Schedule 5. Costs assessors have only those functions conferred on them by and under the Legal Profession Act .
Section 390(4) of the Legal Profession Act is of particular importance. It provides:
"(4) A costs assessor is not an officer of the Supreme Court when acting as a costs assessor."
The management of the costs assessment process falls to the Manager, Costs Assessment. Section 4 of the Legal Profession Act defines the term, Manager, Costs Assessment, when used in Division II of Part 3.2 as:
"...the person holding office as Manager, Costs Assessment in the Attorney-General's Department, and includes a delegate of that person."
The Manager, Costs Assessment, and each of the appointed costs assessors, are not, in their respective capacities an officer of, nor are they a part of the Supreme Court. They are not judicial officers.
The conduct and decisions of the Manager, Costs Assessment and the costs assessors in the whole of the costs assessment process are subject to the supervisory jurisdiction of the Supreme Court: Hall Chadwick v Doyle [2006] NSWSC 1195 at [72]-[73]; Cassegrain v CTK Engineering [2008] NSWSC 457; Khan v Jenni Mattila & Co Lawyers [2011] NSWSC 71.
This review of the statutory provisions by which the cost assessment process is undertaken, leads to these shortly stated conclusions:
(1) the costs assessment process is a creature entirely of statute: Legal Profession Act ;
(2) a costs assessor whilst exercising his or her statutory functions, is not an officer of the Supreme Court;
(3) the costs assessment process is not a process which involves the exercise of the jurisdiction of the Supreme Court;
(4) none of the steps taken in the course of a costs assessment process, including the issuing of a Certificate of Determination, amount to the making of any judicial order, let alone an order of the Supreme Court;
(5) the determination of a costs assessor embodied in a Certificate is not an order of the Supreme Court.
Accordingly, the submission of Ms Dubow that the fact of the issuing of the Costs Certificates and the fact that they were sent to her by the Manager, Costs Assessment, either separately or jointly, amounted to a " further order " of the kind embodied in the order of Hulme J, so as to have the effect of lifting the stay imposed by him, is wrong and must be rejected.
In the result, the stay of the enforcement of the costs orders, as ordered by Hulme J still subsists, and Ms Dubow was not entitled to take any step to enforce the Hulme J costs order. This meant that the filing of the Costs Certificates in both the Local Court and the Supreme Court was in breach of the stay ordered by Hulme J. Such benefit as she has obtained by the obtaining of the judgments in her favour in both courts has been obtained in contravention of the stay order of Hulme J.
FFA is entitled to relief from this conduct.
The Deed of 5 November 2011 - Factual Background
In order to consider the various issues raised about the Deed of 5 November 2010, some further factual background is necessary.
In 2005, in the early part of the litigious struggle between Ms Dubow and FFA, Ms Dubow commenced proceedings in the Federal Magistrate's Court against FFA. These were dismissed and Ms Dubow was ordered to pay FFA's costs in the sum of $25,594.32, which, so far as the evidence reveals, has not as yet been paid. FFA has attempted to enforce that costs order. Arising out of the attempts at enforcement, there were further proceedings in the Federal Magistrate's Court relating to bankruptcy notices, and in the Federal Court of Australia relating to various of the orders made by the Federal Magistrate's Court.
One of the Federal Court proceedings was fixed to be heard by Dodds-Streeton J on Monday, 8 November 2010. Mr M Brabazon SC and Mr M Robinson of counsel were briefed to appear for Ms Dubow. They were apparently engaged in the preparation of the Federal Court matter on Friday 5 November 2010. As well, there was a hearing listed on Wednesday 14 November 2010 of an application in the Federal Magistrate's Court to set aside a bankruptcy notice.
During the course of Friday 5 November, negotiations by telephone and email, took place between the legal representatives of the parties in relation to a proposed settlement of all matters in issue between FFA and Ms Dubow.
One part of those negotiations, an email, occurred after a telephone conversation between counsel for Ms Dubow and Mr Peter Elliott, the general counsel for FFA. Mr Elliott at 1.20pm sent to Mr Mark Robinson (counsel for Ms Dubow) an email, on a without prejudice basis, attaching a deed of settlement which incorporated the terms upon which FFA was prepared to settle " this matter against your client ". The email said:
"Here is the deed of settlement setting out the terms upon which Fitness First is prepared to settle this matter against your client.
The deed must be executed by your client today if the matters are not to proceed on Monday and subsequently (including the bankruptcy proceedings).
Fitness First is not in a position to execute the deed today given that all directors are out of the country.
Please confirm that the deed is agreed and let me have a copy of the deed executed by your client so that I can advise our lawyers that the matters can be advised to the court as settled.
Can I take it that you or your silk will by consent appear on Monday to advise the court that the matter has settled and to hand up whatever documents need to be handed up?"
The terms of the attached Deed referred to proceedings in the CTTT, the Federal Court, the Federal Magistrate's Court, the Supreme Court of New South Wales and the Costs Assessment proceedings in which Ms Dubow had applied to have her costs assessed. It provided that all of the proceedings would be dismissed and that all of the parties would enter into mutual releases. There were other additional terms.
There was a degree of urgency in and about the conduct of the negotiations and execution by Ms Dubow of the proposed Deed. That urgency was created by the imminence of the hearing in the Federal Court on the following business day, Monday 8 November. Clearly, any resolution of all of the proceedings needed to be agreed so that the Federal Court could be notified of the settlement, the parties saved from legal expense likely to be incurred over the weekend for further preparation of the matter for hearing and to avoid further litigation risk, costs and expense. But the parties needed to know before the weekend that they were agreed on the terms by which the matters between them would be resolved.
At 2.24pm on Friday 5 November, Ms Dubow's senior counsel, Mr Brabazon SC, sent an email to Mr Orlizki, FFA's retained solicitor, noting as follows:
"My client is presently flying down from Qld and we are to confer this afternoon when she gets in. I have asked for her to come in directly and shall respond to your offer as soon as possible, but can't be sure whether there will be time to go through the draft deed and get instructions before 5pm. Please confirm that your client's offer below is not limited to close of business. Please also advise whether and how we can best contact you after that hour, should it prove necessary to do so."
This email was responded to promptly at 2.48pm by Mr Orlizki in the following terms:
"My client had understood that Ms Dubow would be arriving in Sydney at 3.30pm.
Be that as it may, if I receive by email a signed copy of the Deed as submitted by 8:00pm this evening, my client will treat the matter as being resolved and we can sign and file the Consent Orders on Monday.
If Ms Dubow seeks to amend the Deed, I will of course do what I can to obtain instructions. However, any proposed amendment will be treated as a rejection of the offer put by my client and a counter offer put by your client. It is possible that I might be able to obtain instructions in relation to the counter offer, but I can offer no guarantee and you should assume that the appeal will proceed on Monday until you hear otherwise.
I should make my client's position clear. Under no circumstances will my client consent to an adjournment on Monday. Either there is a Deed signed by your client and Consent Orders are filed in accordance with the Deed, or the appeal proceeds.
I will be at my desk until about 5:00pm. Thereafter I will be contactable by email."
Notwithstanding the terms of that email, it appears from a further email sent by Mr Orlizki to Mr Brabazon SC at 3.37pm, that Mr Brabazon SC had proposed some amendments to the Deed, to which FFA agreed. In that email, Mr Orlizki said:
"I have obtained instructions on your proposed amendments to the Deed. As I surmised, I am instructed to agree to them.
Accordingly, I attach the amended Deed.
I also attach the forms of order to be filed in the various courts and tribunals."
Attached to that email were as promised by Mr Orlizki, an amended Deed and various copies of consent orders. There was no form of Consent Order included with that email which dealt specifically with the Hulme J proceedings.
At 6.20pm on 5 November 2010, Mr Brabazon SC sent an email to Mr Orlizki. It said:
"Please find attached a scan of the executed deed of settlement incorporating amendments as discussed and a Word version of same in which the last round of amendments (since your draft v3) is visible in mark up. In accordance with previous emails, this settles the matter between our respective clients.
Mark Robinson will appear for Ms Dubow on Monday to hand up consent orders.
Please advise what arrangements you propose to deliver the counterpart of the deed executed by your client."
There is a further matter of importance that occurred during the course of this chain of emails which needs to be noted. In the course of suggesting amendments to the Deed, a telephone call occurred between Mr Orlizki and Mr Brabazon SC in which Mr Brabazon SC was proposing some amendments to the Deed. The contents of that telephone call were the subject of a file note prepared by Mr Orlizki. It is not necessary to set out the entire file note as some of the amendments proposed were minor, or not presently relevant. However, the note included the following:
"Brabazon called, more than one Supreme Court proceedings. I thought only CTTT proceedings appeal. He has been given different file numbers, changes in file numbers. I will check. Checked RJK office. Only one Supreme Court file, only one set of proceedings. Brabazon said we had to make sure that everything settled and suggested change definition of Supreme Court to 'any Supreme Court proceedings between FFA/Dubow'. OK by me. Orders? Unnecessary - nothing has happened for years. File probably closed by Court. Brabazon will amend and have client sign and email."
There was a further telephone discussion between Mr Orlizki and Mr Brabazon SC which is the subject of a file note. It is in the following terms:
"Called Brabazon - he didn't email me signed Deed, only Word scan of earlier version. Will email. Told him FF won't sign today. Do we have binding agreement on receipt of signed Deed by Dubow? Yes."
After that final telephone conversation, at 6.26pm Mr Brabazon SC sent an email to Mr Orlizki attaching the Deed executed by Ms Dubow both in Word format and PDF. The signed Deed also included the various forms of Consent Orders which were also signed by Ms Dubow.
That email was responded to promptly in these terms by an email from Mr Orlizki to Mr Brabazon SC:
"I acknowledge receipt.
As I explained, my client's directors are in South Africa. Every effort will be made to have them execute the Deed before Monday and have it emailed to me.
In the event that this is not possible, you have my undertaking that the executed Deed will be provided as soon as possible.
I confirm that we have a binding agreement in terms of the Deed."
At 6.57pm on Friday 5 November 2010, Mr Robinson, the junior counsel for Ms Dubow, sent an email to the Associate to Justice Dodds-Streeton in the Federal Court of Australia. The appeal was listed before her Honour on Monday 8 November 2010. That email to Dodds-Streeton J's Associate was in the following terms:
"I am counsel for the applicant in the above matter which is before your Judge on Monday morning in Sydney at 10.15am.
Please inform your Judge that the matter has settled and the parties will be handing up consent orders to dispose of the proceedings.
Alternatively, if her Honour is content to deal with the consent orders in Chambers, I will forward them to you.
I have a sent a copy of this email to counsel and solicitor for the respondent."
There was no immediate response to this email. At 8.57am on Monday 8 November 2010, Mr Robinson sent a follow up email. This was responded to by her Honour's Associate at 9.02am. It said:
"Provided that there are signed Consent Orders, her Honour is content to deal with the matter on the papers.
Please let me know when I can be expected to receive the signed consent orders."
At 9.08am on Monday 8 November 2010, Mr Orlizki, who had been copied into the email exchange, sent an email to her Honour's Associate and to Mr Robinson in which he attached Consent Orders signed on behalf of the parties.
The Consent Orders were in the same form of the consent orders contained in Schedule B to the Deed for the Federal Court proceedings numbered 10/523.
The proceedings were dealt with by her Honour in Chambers. At 9.19am on Monday 8 November 2010, the Associate to Dodds-Streeton J sent an email to the parties which said:
"Her Honour has made orders in the form attached to Mr Orlizki's email below. Accordingly, no appearances will be required this morning.
Please let me know if you require an authenticated copy of the orders for your records."
It is appropriate to observe, at this stage of the factual chronology, that the emails between the lawyers indicated that a binding agreement had been reached, that the counterpart of the Deed, and schedules, had been signed by Ms Dubow and delivered by email to FFA, and that both FFA and Ms Dubow had acted, by sending consent orders to Dodds-Streeton J, upon the basis that there was a binding and effective agreement between them (although no counterpart copy of the Deed had been executed by FFA).
The Deed - The Terms
It is necessary at this stage to record the terms of the Deed which was signed by Ms Dubow and sent by her senior counsel to the solicitors for FFA by email.
The Recitals included these:
"...
C. Dubow has commenced various proceedings against FFA.
D. FFA has denied any liability in respect of the various Proceedings.
E. The parties have agreed to resolve all issues between them upon the terms of this Deed."
The use of the word " Proceedings " refers to the definition of that term in the Deed. That definition included " Costs Assessment proceedings " which were the Costs Assessment numbered 2009/00011832 and also included " Supreme Court proceedings ". The Deed defined " Supreme Court proceedings " to mean, as Mr Brabazon SC had suggested in the telephone call to which I have earlier made reference:
"...any proceedings in the Supreme Court of NSW between Dubow and FFA."
The Deed included mutual releases in the following terms:
" 2. RELEASE BY DUBOW
2.1 Dubow hereby releases FFA and its servants or agents in respect of any Claim made or that could be made at any time whether before or after the date of this Deed.
2.2 The release in clause 2.1 may be pleaded in bar in complete answer to any Claim made.
3. RELEASE BY FFA
3.1 ...
3.5 The release in clause 3.1, to the extent that it is operative, may be pleaded in bar in complete answer to any Claim made."
The Deed also included these further terms which are relevant and have been the subject of submissions:
" 5. PROCEEDINGS
5.1 The Parties, upon exchange of signed counterpart copies of this Deed, shall cause to be signed and sent to the Manager, Costs Assessment and the Cost Assessor appointed in the Costs Assessment Proceedings a letter signed by each of them or their solicitors in terms of Schedule A hereto.
5.2 Dubow shall pay any costs and fees payable to the Manager, Costs Assessment and/or the appointed Costs Assessor relating to the Costs Assessment Proceedings.
5.3 The Parties shall, in respect of the other Proceedings cause to be signed and filed with the relevant court or tribunal Consent Orders in terms of Schedule B hereto.
...
8. ENTIRE AGREEMENT AND REPRESENTATIONS
8.1 This Deed constitutes the entire agreement of the parties about its subject matter and any previous agreements, understandings and negotiations on that subject matter cease to have any effect.
8.2 Each Party:
(a) represents to the other Party that it has not relied on any statement or representation (whether express or implied) made by or on behalf of the other Party;
(b) represents to the other Party that it has obtained independent legal advice in relation to the subject matter of this Deed prior to its execution;
(c) acknowledges that the other Party to this Deed has entered into this Deed in reliance upon the representations by it in sub-clauses (a) and (b) of this Clause.
9. FURTHER ASSURANCE
9.1 Each Party must do, sign, execute and deliver and must ensure that each of its employees and agents does, signs, executes and delivers, all deeds, documents, instruments and acts reasonably required of it or them by notice from another Party to carry out and give fully effect to this Deed and the rights and obligations of the Parties under it."
Included as Schedule A to the Deed was a proposed letter which was to be sent to the Costs Assessor and the Manager, Costs Assessment. It was in the following form:
" SCHEDULE A
Letter to Costs Assessor and the Manager, Costs Assessment
Re: Costs Assessment 2009/00011832
Application by Yolanda Victoria Frances Dubow against Fitness First Australia Pty Limited
The parties are writing to advise that they have resolved all issues between them, including the above Costs Assessment.
The parties have agreed that the costs the subject of the Costs Assessment be assessed at $NIL.
Accordingly, could you please arrange for a Certificate of Assessment of Party/Party Costs to be issued in those terms.
Under the Agreement that has been reached, Ms Dubow, the Applicant in the Costs Assessment, is to pay all costs relating to the Costs Assessment, including the costs of the Costs Assessor. Accordingly, could you please arrange for any invoices relating to such costs to be forwarded to Ms Dubow for her payment.
Dated:
-------------------------------
Yolanda Victoria Frances Dubow
Applicant
--------------------------------------
Rodney Kent
Solicitor for Fitness First Australia Pty Limited
Also attached to the Deed were four sets of Consent Orders, each of which were signed either by Mr Brabazon SC or Ms Dubow. The execution page of the Deed indicated that it was signed by Ms Dubow in the presence of a Mr Laughlin.
The attached Consent Orders did not include any orders to be made in the Hulme J proceedings. Strictly speaking, orders were not necessary because Hulme J made final orders and had, in respect of the costs order, ordered that there be a stay of those proceedings. However, before me, neither party offered, in evidence, any particular explanation as to why there were no consent orders included. The only explanation for this which appears in the evidence, is to be found in the course of the exchange of a telephone conversation between the parties' lawyers which is recorded in the file note which I have set out at [98] above.
On 16 November 2010, the counterpart Deed, executed by the directors of FFA, was emailed by Mr Orlizki to Ms Dubow. The letter in Schedule A was not, and has not yet been, sent to the Costs Assessor.
Further events which I have earlier described, then took place. It is appropriate to shortly recall these events:
(a) On 9 November 2010, the Costs Assessor issued a Certificate of Determination of Costs in accordance with Hulme J's orders in the sum of $28,127.48 payable by FFA to Ms Dubow.
(b) On the same day he also issued a Certificate of the Costs of the Costs Assessment in the sum of $3,398.16 payable by FFA to Ms Dubow.
(c) Both certificates were sent to the parties on 30 November 2010 by the Manager, Costs Assessment.
(d) The Certificates which were sent clearly noted that they related to assessment proceedings number 2009/00011832 which was the costs assessment proceedings defined and specifically referred to in the Deed. The costs assessment proceedings were also referred to specifically by this number in Schedule A to the Deed.
The Deed - Principles of Construction
The Deed is a form of contract to which the ordinary principles of contractual interpretation apply. In McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; 203 CLR 579 at [22] Gleeson CJ said:
"Interpreting a commercial document requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the objects which it is intended to secure."
See also Wilkie v Gordian Runoff Ltd [2005] HCA 17; 221 CLR 522 at 529 [15] per Gleeson CJ, McHugh, Gummow and Kirby JJ.
"33 In approaching the construction of a policy of insurance (and any commercial document), the Court must ascertain the meaning which the document would convey to a reasonable person where that reasonable person has all of the background knowledge available to the contracting parties. The Court must also have regard to the purpose and object of the transaction: Maggbury Pty Limited v Hafele Australia Pty Limited [2001] HCA 70; (2001) 210 CLR 181 at [11], 188 per Gleeson CJ, Gummow and Hayne JJ (with whom Kirby J at [62], 205 and Callinan J at [89], 212 agreed generally on this point); Pacific Carriers Limited v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at [22], 462 per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; Phoenix Commercial Enterprises Pty Limited v City of Canada Bay Council [2010] NSWCA 64 at [148] - [151] per Campbell JA; Lasermax Engineering Pty Limited v QBE Insurance (Australia) Limited [2005] NSWCA 66 at [34] - [35] per McColl JA.
34 In considering the knowledge of the parties it is necessary that, to be relevant, the background knowledge must be both actual knowledge and mutual knowledge. In other words, both parties must know of the factual background. Actual knowledge may be proved either by direct evidence or by inference. If facts are notorious, that may assist in drawing inferences as to the state of actual knowledge: The Movie Network Channels Pty Limited v Optus Vision Pty Limited [2010] NSWCA 111 at [97] - [106] per Macfarlan JA."
There is a question as to the proper approach to be applied in interpreting contracts, and in particular, whether one can look at surrounding circumstances. Mason J (as he then was) said in Codelfa Constructions Pty Ltd v State Rail Authority of NSW [1982] HCA 24; 149 CLR 337, this at 352:
"The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.
It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification. "
Careful attention was drawn to these principles, and their binding effect, recently by the High Court of Australia in Western Export Services Inc v Jireh International Pty Limited [2011] HCA 45 at [3].
In addition, because the document to be interpreted is a Deed of Release, the principles discussed by the High Court of Australia in Grant v John Grant & Sons Pty Limited [1954] HCA 23; 91 CLR 112, require attention. In that decision the High Court considered what construction ought be placed on general words in a release. The Court held that prima facie, a general release should be read as being confined to the matters forming the subject of the dispute to which the Deed relates, and which the Deed recites.
In dealing with Ms Dubow's submissions, the principles which emerge from all of these decisions need to be kept in mind as being applicable to questions as to the meaning and effect of the Deed.
Ms Dubow's Submissions
Ms Dubow made the following submissions:
(1) The Deed did not become effective until after the signed counter-part Deed was returned on 16 November 2010.
(2) The definition of Supreme Court proceedings did not include the proceedings before Justice Hulme which resulted in a judgment and orders to which I have earlier referred because those proceedings had concluded.
(3) The Cost Certificates issued on 9 November 2010 were not the subject of the Deed of Release because they did not fall within the definition of "claim" in the Deed.
(4) Upon the proper interpretation of clause 5.1 of the Deed, unless and until the letter was delivered to the Costs Assessor, the Costs Assessor was entitled to continue with his process and there was no release of any liability created by the Cost certificates.
Effective Date of Deed
Ms Dubow submits that the Deed did not become effective until the FFA counterpart was signed and sent to her on 16 November 2010. Accordingly, so she submits, because the Costs Certificates were issued before that time, and before the time for the submission to the Costs Assessor of the letter in the form of Schedule A to the Deed, she was entitled to retain the benefit of the Costs Certificates.
Ordinarily, the common law requires consideration as an essential element for the formation of a contract. However, it recognises an exception for formal promises under seal, where consideration is not essential, and a deed is enforceable as such. That is because the common law regarded the solemnity of the form surrounding the execution of a deed and the exchange of counterparts, as a sufficient justification for the enforcement of the promise contained in the deed.
However, it is clear that a promise contained in a deed may still be enforceable as a contractual promise providing that consideration for that promise exists. It is necessary to examine the parties' intention to determine how (and when) a binding contract has come into existence: see Sindel v Georgiou [1984] HCA 58; 154 CLR 661.
Where prior negotiations have settled the terms for contract, then the intention of the parties as to when the contract is to become effective can be determined from their conduct, as well as the terms of the deed (or contract) itself.
Here, there is no doubt that:
(1) the terms of the agreement between the parties were as contained in the Deed;
(2) Ms Dubow acknowledged acceptance of those terms by signing the Deed and Schedule B documents on 5 November 2010;
(3) FFA was not in a position to execute and "deliver" its counterpart deed on 5 November 2010, but that would be done promptly upon the directors becoming available;
(4) the legal representatives, with full authority of their clients, confirmed the intention of the parties by their telephone conversations and emails which concluded with Mr Orlitzki's filenote set out at [98] above:
"Do we have a binding agreement on receipt of signed deed by Dubow?
Yes."
and his following email at [100]:
"I confirm that we have a binding agreement in terms of the Deed";
(5) there was consideration for that agreement which included the resolution on the agreed terms of the Federal Court proceedings listed before Dodds-Streeton J on 8 November 2010: see [101]-[105] above.
Accordingly, I conclude that an enforceable agreement came into effect on 5 November 2010 between the parties. The terms of that enforceable agreement were set out in the Deed. That agreement was acted upon on both 5 November 2010 and 8 November 2010 by both parties and is binding upon them.
It was envisaged as part of that Agreement that the FFA counterpart would be made available as soon as practicable. This occurred on 16 November 2010. There is no evidence, nor any submission that this was an unduly long period, or that FFA had not complied with its promise about the delivery of their counterpart.
Rather, the submission was that the Agreement did not come into effect until 16 November 2010. For the reasons articulated above this is contrary to the intention of the parties and contrary to what in fact occurred. I am satisfied that the Agreement encapsulated in the Deed, came into effect on 5 November 2010, and continued in effect thereafter.
Were the Hulme J Proceedings included in the Deed
The answer to this question turns on the terms of the Deed, and if there is any ambiguity, on the intention of the parties.
The definitional provision within the Deed described the phrase " Supreme Court proceedings " as including " ...any proceedings in the Supreme Court of New South Wales between Dubow and FFA ".
It is entirely clear and, in my view, beyond argument, that this definition included the Hulme J proceedings. Ms Dubow had commenced those proceedings against FFA in the Supreme Court. Hulme J had heard them and made orders. A stay until further order had been granted. It was open to any party to apply to have the stay lifted. Ms Dubow had filed such a notice of motion. The proceedings were still on foot and had not been entirely finalised.
I conclude that the Hulme J proceedings were caught by the terms of the Deed.
Were it necessary to examine the intention of the parties, I would have reached a similar conclusion. It was clearly the intention of the parties that the Deed would put an end to all proceedings then extant. The Hulme J proceedings were the subject of specific consideration and discussion between the parties and were within their contemplation. The terms of the Deed clearly cover the proceedings.
Are the Costs Certificates part of the Deed?
It was submitted by Ms Dubow that the Costs Certificates were not caught by the terms of the Deed because:
(1) they were not part of the costs assessment proceedings as defined in the Deed; and/or
(2) they did not fall within the definition of a " claim " in the Deed.
I reject both of these submissions.
The issuing of a costs certificate by a costs assessor is an act provided for by s 368 of the Legal Profession Act . It records, and sets out, the determination of the costs assessor as to their assessment of the fair and reasonable amount of the costs payable by the chargeable party.
The costs certificate represents the end point of the costs assessment process, much like a judgment of a court or tribunal represents the end point of proceedings heard by the court of tribunal. But that end point is not a separate proceeding, nor is it divorced from what has preceded it. The issuing of a certificate is part of the costs assessment process and does not stand outside it.
Accordingly, the definition of the Deed of Costs Assessment proceedings includes, upon its proper interpretation, the issuing of the Cost Certificates.
Ms Dubow submitted that such entitlements as were created by the Costs Certificates were not a " claim " within the meaning of that term in the Deed.
In the Deed the word " claim " was given this meaning, relevantly:
"Claim means any claim or demand relating to:
...
(iii) any right claimed or that could be claimed by Dubow as against FFA;
...
(v) the Proceedings (or any of them) or their subject matter, including any order or application for costs ..."
As I have earlier noted, costs assessments proceedings were included in the definition of the term "Proceedings" as that term is used in the Deed.
Ms Dubow's use of the Costs Certificates, that is, to give rise to a judgment in her favour against FFA and her subsequent demands on FFA to pay to her the monies fixed by the judgment, clearly amount, in my view, to a demand or claim relating to either the Supreme Court proceedings, that is, the Hulme J proceedings because these certificates relate to the costs assessed from Hulme J's costs order, or else from the costs assessment proceedings.
Hence, the Costs Certificates, and claims arising from them, are caught by the release set out in by Ms Dubow in clause 2.1 of the Deed.
Ms Dubow has by the Deed, released FFA from any liability to her arising from the Costs Certificates, because clause 2.1 of the Deed covers any claim that has been, or could be made before or after the date of the Deed, relating to the subject matter of the Deed.
Although I have determined that the Deed became effective on 5 November 2010, whether it became effective on that date or on 16 November 2010 is irrelevant to the determination of this question. Ms Dubow, in December 2010, filed the Costs Certificates and claimed an entitlement to judgment. But in so doing, she ignored the fact that she had by clause 2.1 of the Deed, released FFA from any liability to her for those costs.
In filing the Costs Certificates to obtain judgment in both the Local Court and the Supreme Court, Ms Dubow was acting contrary to the terms of the release contained within clause 2.1 of the Deed.
Proper Interpretation of Clause 5.1 of the Deed
This raises an issue as to whether, if clause 5.1 is not complied with, the Costs Assessor is entitled to proceed with the costs assessment process, including issuing cost certificates, and accordingly, the release in clause 2.1 was not effective with respect to any such issued certificates.
It is clear, that unless and until the Costs Assessor was approached by the parties and informed of their agreement as to the outcome of the costs assessment process, he was entitled to, and in fact as events transpired, did continue with the costs assessment process.
But this fact, and the failure of both parties to comply with clause 5.1, does not affect the substance of their agreement to release each other from claims or demands relating to the Hulme J proceedings and the costs assessment proceedings as defined in the Deed.
The release, on its terms, covers any claim arising out of the subject matter whether before or after the Deed. In other words, it was expressly contemplated that the release would apply to future events.
The letter in Schedule A was merely a mechanism by which it was intended to achieve the stopping of the costs assessment process before a certificate was issued. However, the Deed did not mean that if this mechanism failed, the substantive agreement of the parties was to be regarded as set aside.
I reject this submission. I conclude that the failure of both parties to sign and forward to the costs assessor a letter in accordance with Schedule A did not affect the release in clause 2.1, which continued to apply, as I have found, to the terms of the Costs Certificates.
This determination and the preceding determinations on Ms Dubow's submissions in respect to the Deed, demonstrates that the Deed should be given its full force and effect.
Summary
To summarise:
(1) Ms Dubow's actions in registering the Cost Certificates, obtaining judgments against FFA in the Local Court and the Supreme Court, and then attempting to enforce those judgments, were contrary to the terms of the stay order made by Hulme J (finally) in February 2008;
(2) upon the true interpretation of the Deed of Release dated 5 November 2010, Ms Dubow released FFA from any obligation to her for legal costs arising from the Hulme J orders; and
(3) that release was effective from 5 November 2010, with the consequence that she had released her claims for costs before she received, and filed the Costs Certificates in the Local Court and Supreme Court. At the time she filed those Certificates in both of those courts, she had no legitimate basis for seeking the entry of judgment in her favour and the enforcement of those judgments because she had already released her entitlement to those costs.
Relief
In order to give effect to these findings, it is necessary to formulate appropriate relief separately in each of the four proceedings listed.
Proceedings 2011/39995
In these proceedings Ms Dubow appeals against the decision of Magistrate Townsden of 20 January 2011 to set aside the judgment that she registered in the Local Court.
The orders which should be made to give effect to my findings are:
(1) Appeal dismissed.
(2) Ms Dubow to pay FFA's costs of the proceedings.
Proceedings 2011/39253
In these proceedings, which were commenced by Ms Dubow filing the Cost Certificates and obtaining judgment, FFA seeks relief against the judgment and any steps to enforce it.
The orders which should be made to give effect to my findings are:
(1) Order that the judgment entered on 7 February 2011 be, and hereby is, set aside.
(2) Order that no judgment be entered consequent upon the filing of the document entitled "Registration filing of Certificate of Judgment/Order" in these proceedings by Ms Dubow.
(3) Order that Ms Dubow be, and hereby is, restrained from filing the Certificate of Determination of Costs dated 9 November 2010 in assessment 2009/11832, in the Supreme Court or in any other Court of competent jurisdiction.
(4) Order that Ms Dubow be and hereby is, restrained from filing the Certificate of Determination of Costs of Costs Assessment dated 9 November 2009 in assessment number 2009/11832, in the Supreme Court or in any other Court of competent jurisdiction.
(5) Order Ms Dubow pay FFA's costs of these proceedings including reserved costs.
Proceedings 2011/152563
In these proceedings, FFA seeks leave to appeal against the two determination of the costs assessor, as those determinations are found in the Costs Certificate.
FFA contends that there should be substituted for the Costs Certificates:
(1) A determination assessing the party/party costs as $NIL;
(2) A variation of the Certificate of Determination of Costs of Costs Assessment by adjusting the name of the party entitled to costs.
Ms Dubow contends that the Costs Certificate should stand or else be increased.
This appeal, which is pursuant to s 385 of the Legal Profession Act is by way of a new hearing and presenting fresh evidence to be given. Under s 385(5), this Court can make such determination as in its opinion, should have been made by the costs assessor.
Here, by reason of the terms of the Deed, the parties ought to have asked the costs assessor to determine the costs as $NIL. The timing did not permit that to occur. However, this Court's determination can and ought to take account of, the parties' agreement.
The appropriate orders are:
(1) Order that, there be substituted for and in lieu of, the determination of the costs assessor, Mr Vincent Goldrick, set out in the Certificate of Determination of Costs issued on 9 November 2010 in assessment number 2009/11832, a determination assessing the costs to be paid to the Costs Applicant [Ms Dubow] by the Costs Respondent [FFA] in the sum of $NIL.
(2) Order that there be substituted for, and in lieu of the determination of the costs assessor, Mr Vincent Goldrick, set out in the Certificate of Costs of the Costs Assessment in assessment number 2009/11832, a determination assessing the costs to be paid to the Costs Applicant [Ms Dubow] by the Costs Respondent [FFA], in the sum of $NIL.
(3) Order that the application for leave to appeal be otherwise dismissed.
(4) Order that Ms Dubow pay FFA's costs of the proceedings.
Proceedings 2011/211563
In these proceedings, FFA seeks relief pursuant to s 69 of the Supreme Court Act quashing the determination of the costs assessor issued on 9 November 2010. It also seeks declarations about the meaning and effect of the Deed of 5 November 2010.
In light of the orders in the previous proceedings, which have the effect of setting aside the determination of the costs assessment and substituting for them the appropriate assessment, it is inappropriate to grant relief under s 69 of the Supreme Court Act , because such relief would serve no useful purpose.
However, declarations as to the meaning and affect of the Deed are appropriate.
The relief granted is as follows:
(1) A declaration that upon the true construction of the Deed dated 5 November 2010 between the plaintiff and first defendant:
(a) The first defendant [Ms Dubow] has released the plaintiff [FFA] in respect of all liability for costs in accordance with the orders of Hulme J in proceedings 2005/30095;
(b) The first defendant [Ms Dubow] has released the plaintiff [FFA] in respect of all liability arising from the cost assessment matter numbered 2009/11832, and including all liability in respect of the Costs Certificates issued by Mr Goldrick on 9 November 2010;
(2) An order restraining the first defendant [Ms Dubow] from taking any step or steps in any Court to enforce any order for costs made by Hulme J in proceedings 2005/30095.
(3) Summons otherwise dismissed.
(4) An order that Ms Dubow pay FFA's costs of the proceedings.
Two further matters relating to relief need to be determined.
The first is that FFA applied for costs of these four sets of proceedings on an indemnity basis.
I am not prepared to make such an order in this case because I do not regard the circumstances, including the fact that Ms Dubow is self-represented, as sufficiently exceptional to warrant anything other than the usual order for costs.
The second matter is that I did not determine prior to this judgment a number of interlocutory motions raised in the course of the hearing which related to matters of discovery and subpoenas. Having regard to the judgment that I have given, and the basis for it, these matters are entirely irrelevant. A determination of these matters could not and would not have assisted the judgment in those proceedings. Accordingly, the determination of the final proceedings means that this outstanding interlocutory applications do not need to be determined and so stand dismissed.
Orders
I make the following orders:
Proceedings 2011/39995
(1) Appeal dismissed.
(2) Ms Dubow to pay FFA's costs of the proceedings.
Proceedings 2011/39253
(1) Order that the judgment entered on 7 February 2011 be, and hereby is, set aside.
(2) Order that no judgment be entered consequent upon the filing of the document entitled "Registration filing of Certificate of Judgment/Order" in these proceedings by Ms Dubow.
(3) Order that Ms Dubow be, and hereby is, restrained from filing the Certificate of Determination of Costs dated 9 November 2010 in assessment 2009/11832, in the Supreme Court or in any other Court of competent jurisdiction.
(4) Order that Ms Dubow be and hereby is, restrained from filing the Certificate of Determination of Costs of Costs Assessment dated 9 November 2009 in assessment number 2009/11832, in the Supreme Court or in any other Court of competent jurisdiction.
(5) Order Ms Dubow pay FFA's costs of these proceedings including reserved costs.
Proceedings 2011/152563
(1) Order that, there be substituted for and in lieu of, the determination of the costs assessor, Mr Vincent Goldrick, set out in the Certificate of Determination of Costs issued on 9 November 2010 in assessment number 2009/11832, a determination assessing the costs to be paid to the Costs Applicant [Ms Dubow] by the Costs Respondent [FFA] in the sum of $NIL.
(2) Order that there be substituted for, and in lieu of the determination of the costs assessor, Mr Vincent Goldrick, set out in the Certificate of Costs of the Costs Assessment in assessment number 2009/11832, a determination assessing the costs to be paid to the Costs Applicant [Ms Dubow] by the Costs Respondent [FFA], in the sum of $NIL.
(3) Order that the application for leave to appeal be otherwise dismissed.
(4) Order that Ms Dubow pay FFA's costs of the proceedings.
Proceedings 2011/211563
(1) A declaration that upon the true construction of the Deed dated 5 November 2010 between the plaintiff and first defendant:
(a) The first defendant [Ms Dubow] has released the plaintiff [FFA] in respect of all liability for costs in accordance with the orders of Hulme J in proceedings 2005/30095;
(b) The first defendant [Ms Dubow] has released the plaintiff [FFA] in respect of all liability arising from the cost assessment matter numbered 2009/11832, and including all liability in respect of the Costs Certificates issued by Mr Goldrick on 9 November 2010;
(2) An order restraining the first defendant [Ms Dubow] from taking any step or steps in any Court to enforce any order for costs made by Hulme J in proceedings 2005/30095.
(3) Summons otherwise dismissed.
(4) An order that Ms Dubow pay FFA's costs of the proceedings.
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Decision last updated: 27 February 2012
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