Frumar v The Owners of Strata Plan 36957

[2010] NSWCA 172

New South Wales

Court of Appeal

CITATION:	FRUMAR v THE OWNERS OF STRATA PLAN 36957 [2010] NSWCA 172
HEARING DATE(S):	21/07/2010
JUDGMENT DATE:	16 September 2010
JUDGMENT OF:	Giles JA at 1; Macfarlan JA at 20; Handley AJA at 21
DECISION:	(1) Appeal allowed with costs. (2) Judgment of the District Court of 18 December 2009 set aside. (3) In lieu thereof substitute judgment for the plaintiff in the sum of $101,815.51 including pre-judgment interest with effect from 26 July 2010 and costs. (4) The respondent is to have a certificate under the Suitors Fund Act if qualified.
CATCHWORDS:	COSTS -- assessment -- certificate -- taken to be judgment when filed in Court -- certificate set aside on appeal -- effect on judgment - JUDGMENTS & ORDERS -- permanent stay of judgment -- effect - LEGAL PRACTITIONERS -- costs -- assessment -- certificate -- taken to be judgment when filed in Court -- certificate set aside on appeal -- effect on judgment - RESTITUTION -- moneys paid under judgment based on costs certificate -- certificate set aside on appeal -- costs respondent entitled to restitution of moneys paid pending fresh assessment
LEGISLATION CITED:	Civil Procedure Act, s 135 Legal Profession Act 1987, s 208KF(1)
CATEGORY:	Principal judgment
CASES CITED:	Allanson v Midland Credit Ltd (1977) 30 FLR 108 Beswicke v Alner [1926] VLR 72 Port of Melbourne Authority v Anshun Pty Ltd (No 1) [1980] HCA 41, 147 CLR 35 TCN Channel 9 Pty Ltd v Antoniadis [No 2] (1999) 48 NSWLR 381 CA Production Spray Painting and Panel Beating Pty Ltd v Newnham [No 2] (1992) 27 NSWLR 659 CA R v P (No 2) [2003] NSWCA 360 Re Marks ex parte The Australian Building Construction Employees and Builders Labourers Federation (1981) 55 ALJR 395 Stollmeyer v Trinidad Lake Petroleum Co [1918] AC 498
PARTIES:	A - Geoffrey Craig Frumar R - The Owners of Strata Plan 36957
FILE NUMBER(S):	CA 2010/4387
COUNSEL:	A - J Knackstredt R - EGH Cox
SOLICITORS:	A - Geoffrey C Frumar & Associates R - HWL Ebsworth Lawyers
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	3137/2009
LOWER COURT JUDICIAL OFFICER:	Curtis DCJ
LOWER COURT DATE OF DECISION:	18/12/2009

2010/4387

Giles JA
Macfarlan JA
Handley AJA

Thursday 16 September 2010

FRUMAR v THE OWNERS - STRATA PLAN No 36957

CATCHWORDS

COSTS -- assessment -- certificate -- taken to be judgment when filed in Court -- certificate set aside on appeal -- effect on judgment
JUDGMENTS & ORDERS -- permanent stay of judgment -- effect
LEGAL PRACTITIONERS -- costs -- assessment -- certificate -- taken to be judgment when filed in Court -- certificate set aside on appeal -- effect on judgment
RESTITUTION -- moneys paid under judgment based on costs certificate -- certificate set aside on appeal -- costs respondent entitled to restitution of moneys paid pending fresh assessment

HEADNOTE

The appellant was ordered to pay the respondent's costs of an action in the District Court. The respondent's costs were reassessed by a review panel under the Legal Profession Act 1987. The respondent filed the panel's certificate in the District court pursuant to s 208FK(2) and it was then "taken to be a judgment".

The respondent moved to enforce its judgment pending an appeal from the certificate. The appellant's application for a stay was compromised on terms recorded in an agreement of 16 December 2005 which provided for payment of part of the "judgment" by instalments. Clause 4 provided that "if after judgment in the Supreme Court proceedings" the amount already paid "exceeds the amount (if any) of the District Court Judgment as varied or substituted" the respondent would refund the excess.

The panel's certificate was set aside by the Court of Appeal [2006] NSWCA 278, 67 NSWLR 321 and a fresh assessment was ordered. The Judicial Registrar of the District Court later granted a permanent stay of the judgment based on that certificate.

The appellant's action in the District Court to recover the amounts paid under the agreement was dismissed. On appeal by leave Held by majority allowing the appeal: (1) The decision of the Court of Appeal setting aside the certificate deprived the "judgment" of its only legal foundation; (2) The permanent stay of the "judgment" deprived it of all legal effect or operation; (3) The amount of the judgment as varied for the purposes of cl 4 of the Agreement was therefore nil; (4) The appellant was entitled to restitution.

ORDERS

(1) Appeal allowed with costs.
(2) Judgment of the District Court of 18 December 2009 set aside.
(3) In lieu thereof substitute judgment for the plaintiff in the sum of $101,815.51 including pre-judgment interest with effect from 26 July 2010 and costs.
(4) The respondent is to have a certificate under the Suitors Fund Act if qualified.

2010/4387

Giles JA
Macfarlan JA
Handley AJA

Thursday 16 September 2010

FRUMAR v THE OWNERS - STRATA PLAN No 36957

Judgment

1 GILES JA: The facts are set out in the reasons of Handley AJA, which I have had the advantage of reading in draft. The issue is whether the respondent was obliged, pursuant to cl 4 of the agreement of 16 December 2005 (“the Agreement”), to refund to the appellant the $75,000 he had paid in accordance with cl 2 of the Agreement. I respectfully differ from my brethren, and for the following reasons consider that the respondent was not obliged to refund the $75,000.

2 Handley AJA has set out relevant provisions of the Agreement. For convenience, I repeat them with the inclusion of cl 3.

“1. The Plaintiff (the Owners of Strata Plan 36957) undertakes to not enforce the judgment debt dated 15.11.2005 until the earlier of:


a. 3 months after judgment is handed down in Supreme Court proceedings 14177 of 2005 between Mr Frumar and the Plaintiff; or

b. Default under clause 2.

2. The Defendant (Mr Frumar) undertakes, subject to clause 6, to pay the Plaintiff $25,000 on the first working day of each of the following 4 months:

i) January 2006;
ii) February 2006;
iii) March 2006; and
iv) May 2006;
in discharge of the judgment debt, which is contested in the Supreme Court Proceedings.


3. Any amounts paid under clause 2 will reduce and set-off any amounts owed by Mr Frumar to the Plaintiff.

4. If after judgment in the Supreme Court Proceedings, the amount already paid by Mr Frumar exceeds the amount (if any) of the District Court Judgment as varied or substituted, then the Plaintiff will refund the excess within 21 days after which interest will accrue.

5. Interest will accrue on any amounts outstanding, under clauses 2 and 4 of this agreement at the rates in Schedule 5 to the Uniform Civil Procedure Rules.

6. The obligations in clause 2 only operate until judgment is handed down in the Supreme Court Proceedings.

7. …”.

3 The critical provision is cl 4, but it must be understood as part of the Agreement as a whole.

4 The Agreement is to be construed objectively, according to what a reasonable person would understand by the language in which the parties expressed their arrangement and with regard to the surrounding circumstances known to the parties and the purpose and object of their transaction. Statements of this approach, expressed in a variety of ways, are legion. It is sufficient to refer to Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at [22] per Gleeson CJ and Gummow, Hayne, Callinan and Heydon JJ; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at [40] also per Gleeson CJ and Gummow, Hayne, Callinan and Heydon JJ; and International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151 at [8] per Gleeson CJ and [53] per Gummow, Hayne, Crennan and Kiefel JJ.

5 It is not necessary to find ambiguity before resorting to the context as an aid to construction: Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 264 ALR 15. In any event, there is ambiguity in cl 4.

6 The agreement was entered into in the circumstances that -

(a) the appellant had been ordered to pay the respondent’s costs of unsuccessful District Court proceedings;

(b) there was dispute over the amount of the costs, or more precisely the amount at which the costs should be assessed, although there could not be dispute that some amount would be assessed and would be payable according to the order;

(c) the costs had been assessed by a review panel at $122,802.67;

(d) the appellant had appealed to the Supreme Court seeking to have the determination of the review panel set aside, and either a remitter for redetermination or that the Court make its own determination;

(e) the respondent had filed the certificate issued by the review panel in the District Court, and the Registrar had certified that the respondent “recovered judgment against” the appellant in the amount of $122,802.67; and

(f) the appellant had applied for a stay of the “judgment” pending the decision of his appeal to the Supreme Court.

7 Some shared misunderstandings are evident in the Agreement.

8 First, as Handley AJA has explained, under s 208KF(2) of the Legal Profession Act 1987 (since repealed, see now s 368(5) of the Legal Profession Act 2004) on the filing of the review panel’s certificate it was taken to be a judgment of the District Court. In truth, there was no District Court judgment. So-called judgments under s 208J(3) of the 1987 Act, which is relevantly replicated in s 208KF(2), have been considered in Doyle v Hall Chadwick [2007] NSWCA 159 at [47]–[54] and cases there mentioned, with recognition of their distinct nature, and while reference to them as judgments is convenient (and I will hereafter refer to the District Court judgment as such) they take their force from the statute and are not judgments of the court.

9 Secondly and consequentially, if the Supreme Court proceedings brought a redetermination of the amount of the costs by a costs assessor or a review panel, or a determination by the Court itself, there would not be a variation of the District Court judgment. At least in the case of redetermination, there would be a fresh certificate which upon registration would be taken to be a judgment – there would be an entirely different judgment. In the case of a determination by the Court, being “such determination in relation to the application as, in [the Court’s] opinion, should have been made by the costs assessor” (s 208L(2)(a)), it is not clear whether and how the result would be a fresh certificate, but if the result instead would be a judgment by the Court for a particular amount again there would not be a variation of the District Court judgment.

10 Whether a redetermination or a determination by the Court would bring a substituted District Court judgment involves regard to the same considerations. Perhaps a judgment upon registration of a certificate for a different amount or the Court’s judgment for a different amount could be regarded as a substituted judgment; but it would not of itself expunge the existing District Court judgment, and to that extent would not be a substituted judgment.

11 These matters were plainly enough not appreciated by the parties, who provided in cl 4 for the refund of an excess ascertained upon variation or substitution of “the District Court Judgment”. However, the purpose of the agreement was clear. The amount of the costs remained in dispute. In settlement of the stay application, the respondent would not enforce the “judgment debt” of $122,802.67 but the appellant would pay by instalments up to $100,000; and when the amount of costs payable was resolved, the appellant would have to pay any balance or if the amount was less than he had paid the respondent would have to repay the excess. The instalments were to be paid and held on account of a liability for costs still to be resolved in amount, with adjustment by further payment or refund when the amount was resolved. It was a sensible arrangement when some amount of costs would be payable pursuant to the order, and $100,000 was no doubt a negotiated amount between the parties’ forecasts.

12 If the appellant was unsuccessful in the Supreme Court proceedings, there would be no effect on the District Court judgment. The appellant would owe $122,802.67 to the respondent, and the instalments paid would reduce and be set off against what he owed (cl 3). (It is not necessary to consider whether “judgment in the Supreme Court proceedings” meant only judgment at first instance, that judgment being adverse to the appellant; it was not suggested that it meant only this). If the appellant was successful in the Supreme Court proceedings, either by obtaining a remitter for redetermination or by obtaining judgment for a particular amount, it was necessary that there be an effect on the District Court judgment whereby the judgment was varied or substituted. If by regard to the amount of the judgment as varied or substituted there was an excess, the respondent had to repay it.

13 It is not clear whether “after judgment in the Supreme Court proceedings” meant by reason of the judgment, that is, by the Court determining the amount of costs, or whether the words were temporal and also allowed for redetermination upon remitter and registration of a fresh certificate. It is not necessary to decide. By the variation or substitution there had to be a District Court judgment for a different amount, from which an excess (if it was an excess rather than a shortfall) was seen.

14 That has not occurred, and so the respondent’s obligation to repay an excess has not been enlivened.

15 The District Court judgment has not been varied in amount, quite apart from the consequence of its distinct nature earlier mentioned. Nor is there a substituted District Court judgment (or any judgment) for a different amount. The District Court judgment has been permanently stayed, and Handley AJA has considered what that involves, but there has not been a fresh certificate nor, if that could occur, has the Supreme Court determined or given judgment for a particular amount. The stay of the District Court judgment does not bring a judgment for $nil, and is not variation or substitution for the purposes of cl 4.

16 Having regard to the purpose of the Agreement, there has not been resolution of the amount of costs payable – that costs in some amount are payable not being in doubt – and there is no amount against which the $75,000 paid by the appellant can be measured in order to arrive at an excess. It remains that the instalments paid are held on account of a liability for costs in an amount yet to be resolved.

17 The appellant placed some emphasis on “if any” in the phrase “the amount (if any) … ”. As part of the Agreement, the words should be given effect if possible. But they are hard to understand when some amount of costs will be payable, and the reference in cl 3 of the Agreement to “any amounts owed by Mr Frumar to the Plaintiff” is similarly at odds with that position. In my opinion, however, even if the words were in contemplation of a varied or substituted District Court judgment for a nil amount that has not occurred. A preferable explanation, in an agreement not tightly drawn, is contemplation that the District Court judgment might not be varied or substituted at all.

18 Failure in the operation of cl 4 of the Agreement does not leave the appellant without remedy. There may yet be a substituted District Court judgment; and apart from cl 4, if in due course an amount less than $75,000 is established for the costs, it is difficult to accept that the appellant will not otherwise be entitled to recover the excess.

19 In my opinion, the appeal should be dismissed with costs.

20 MACFARLAN JA: I agree with Handley AJA.

21 HANDLEY AJA: This is an appeal by leave from the judgment of Curtis DCJ in favour of the defendant in an action by the appellant to recover pre-payments on account of assessed costs.

22 On 3 December 2002 Coorey DCJ entered judgment against the appellant in a negligence action he had brought against the respondent and another defendant. The appellant was ordered to pay the respondent's costs of the action.

23 On 25 November 2004 a costs assessor determined that the fair and reasonable amount of costs to be paid by the appellant was $127,521.49.

24 On 31 August 2005 a panel set aside the assessment, substituted on assessment for $122,802.67, and issued its certificate.

25 On 9 September 2005 the appellant appealed to the Supreme Court seeking to have the determination of the panel set aside.

26 Section 208KF(1) of the Legal Profession Act 1987 (since repealed) provides that on the making of a determination in relation to an application for a review a panel is to issue to each party a certificate of its determination. Subsection 208KF(2) provides:

"If the panel set aside the determination of the costs assessor the following provisions apply:
(a) …
(b) if the amount of costs has not been paid, the certificate is, on filing of the certificate in the office or registry of a court having competent jurisdiction to order the payment of that amount of money, and with no further action, taken to be a judgment of that court to the amount of unpaid costs."

27 On 3 November 2005 the respondent filed the certificate in the District Court and on 15 November the Registrar certified that "in this action the plaintiff recovered judgment against the defendant on 3/11/2005 in the sum of $122,802.67.” There was no action and the respondent had not recovered judgment in any ordinary sense.

28 On 22 November the appellant filed a notice of motion seeking a stay of the "judgment" pending the outcome of the proceedings in the Supreme Court.

29 On 16 December 2005 the parties entered into an agreement which provided:

"1. The plaintiff … undertakes to not enforce the judgment debt dated 15.11.2005 until the earlier of …


(a) 3 months after judgment is handed down in Supreme Court proceedings 14177 of 2005 … ; or

(b) default under clause 2.

2. The defendant (Mr Frumar) undertakes, subject to clause 6, to pay the plaintiff $25,000 on the first working day of each of the following four months:

1 January 2006
2 February 2006
3 March 2006
4 May 2006

In discharge of the judgment debt which is contested in the Supreme Court proceedings.

3. …

4. If after judgment in the Supreme Court proceedings, the amount already paid by Mr Frumar exceeds the amount (if any) of the District Court Judgment as varied or substituted, then the Plaintiff will refund the excess within 21 days after which interest will accrue.

5. …

6. The obligations in clause 2 only operate until judgment is handed down in the Supreme Court Proceedings.

7. …”.

30 The appellant paid the first three instalments.

31 On 4 April 2006 the appeal was dismissed by Harrison AsJ but the appellant appealed to the Court of Appeal.

32 On 7 October 2006 the appeal to the Court of Appeal was allowed: [2006] NSWCA 278, 67 NSWLR 321. The orders of the Associate Justice, and the determination of the panel were set aside, and the panel was ordered to redetermine the application.

33 On 15 March 2007 the appellant filed a notice of motion in the District Court seeking inter alia a permanent stay of the “judgment”.

34 On 27 April 2007 the Judicial Registrar made an order staying the judgment permanently pursuant to s 135 of the Civil Procedure Act and ordered the respondent to pay the appellant’s costs of the motion. The Judicial Registrar added the following to the order in the Court's records: "Note proceedings are now finalised."

35 Section 135 of the Civil Procedure Act relevantly provides:

"(1) The court may, by order, give directions with respect to the enforcement of its judgments and orders.
(2) Without limiting subs (1) the court may make any of the following orders:
(a) …
(b) …
(c) an order prohibiting any other person from taking any further action, either permanently or until a specified day, to enforce a judgment or order of the court.
(d) …”

36 An order granting a permanent stay of an action on the ground that it is frivolous or vexatious is interlocutory, but an order granting a permanent stay on other grounds is final because it finally determines the rights of the parties in the action: Port of Melbourne Authority v Anshun Pty Ltd (No 1) [1980] HCA 41, 147 CLR 35, 38. The principle must apply with added force to a permanent stay of a judgment.

37 The question before Curtis DCJ and this Court concerns the effect of the permanent stay on cl 4 of the agreement of 16 December 2005.

38 Although the Registrar of the District Court signed a certificate of judgment on 15 November 2005 it was not a judgment in an action in the Court (District Court Act s 44). Section 208KF(2)(d) of the Legal Profession Act provides that a filed certificate, “with no further action” is taken to be a judgment. A filed certificate is not a judgment, but is deemed to be one for enforcement purposes. The section does not authorise the entry of judgment on the certificate.

39 Section 133 of the Civil Procedure Act provides:

"(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) …
(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."

40 It may be accepted that a certificate of a panel is a certificate of an adjudication by a person having authority for the purposes of s 133. The section authorises the entry of the certificate in accordance with the uniform rules. Once entered the certificate may be enforced, but entry does not otherwise alter its legal effect and the section does not make it a judgment of the Court.

41 Part 36.10 of the UCPR relevantly provides:

"(1) A cost assessor’s certificate:
(a) …
(b) may be filed in fresh proceedings … in the same court …
(2) If, in relation to proceedings in which a cost assessor’s certificate is filed, there is also filed an affidavit, sworn not earlier than 14 days before it is filed, stating:
(a) if the affidavit is filed with the certificate, how much of the amount of costs included in the certificate has not been paid, and
(b) otherwise, the amount of the costs included in the certificate that, at the time the certificate was filed, had not been paid,
the registrar may enter judgment for the amount of the costs that have not been paid, without a direction of the court or request of a party.”

42 The validity of that part of the rule which authorises the entry of judgment must be doubtful in view of s 208KF(2)(b) of the Legal Profession Act 1987 (and its successor s 368(5) of the 2004 Act) dealing with the effect of filing "with no further action", and s 133(2)(b) of the Civil Procedure Act which only provides for entry of the certificate in accordance with the rules. Accepting, for present purposes, that the rule is valid, it is nevertheless clear that the entry of judgment on a filed certificate is a ministerial act. It makes the certificate enforceable as a judgment but otherwise does not alter its legal effect.

43 The certificate of a panel is a cost assessor's certificate as defined in the Dictionary of the UCPR.

44 The decision of this Court on 17 October 2006 [2006] NSWCA 278, 67 NSWLR 321, which set aside the certificate of the panel, deprived the "judgment" 15 November 2005 of its only legal foundation. The District Court was bound, on a proper application, to set the "judgment" aside. UCPR Pt 36.16(2)(a), (3), and (4) confer the necessary power for this purpose, but in any event the District Court has implied power to correct its records: Doyle v Hall Chadwick [2007] NSWCA 159 at [49]–[52].

45 The Judicial Registrar ordered a permanent stay of the judgment and did not set it aside. Mr Cox for the respondent said that a substantial sum would become due and payable to his client when the costs payable under the order of Coorey DCJ were quantified, but that stage has not yet been reached. In the meantime the debt for costs owed by the appellant is unascertained, contingent, and unenforceable.

46 A new certificate will not confer retrospective validity, in whole or in part,on the old certificate or the earlier "judgment". A new certificate and any "judgment" based on it will be completely independent and the debt will only become due and payable on entry of that certificate.

47 The appellant paid $75,000 to the respondent under the threat of legal process based on the "judgment". The legal basis for those payments was a certificate that has been set aside leaving the respondent without an enforceable debt.

48 If the “judgment” had been set aside by the Court of Appeal the successful appellant would have been entitled to unconditional restitution of moneys paid under it with interest: TCN Channel 9 Pty Ltd v Antoniadis [No 2] (1999) 48 NSWLR 381 CA; Production Spray Painting and Panel Beating Pty Ltd v Newnham [No 2] (1992) 27 NSWLR 659 CA. Orders for restitution were made in those cases although in the first the respondent had other claims against the successful party, and a new trial had been ordered in the second.

49 The Court is concerned with the construction of the agreement of 16 December 2005 which was drafted by lawyers who may reasonably be supposed to have had some knowledge of the right of successful appellants to restitution.

50 The Court of Appeal did not vary the “judgment” or substitute another. The appeal to the Supreme Court was from the determination of the panel, not from the “judgment”. There could be no appeal from that “judgment”: Doyle v Hall Chadwick [2007] NSWCA 159 at [47]; District Court Act s 127(1).

51 The Court of Appeal may have been able to award restitution by vacating “the judgment” and ordering repayment of the $75,000 with interest. It is not necessary to express a final view on that question, but the appellant’s failure to seek and obtain restitution from this Court cannot affect his rights under cl 4: Doyle v Hall Chadwick (above) [53].

52 The words in cl 4 "the amount (if any) of the … Judgment as varied or substituted” show that the parties contemplated that the District Court judgment might be set aside, or reduced to nil. The factual matrix included the pending challenge which was to the certificate, not “the judgment”.

53 The clause refers to the position "after judgment in the Supreme Court". The parties must have contemplated that if the appeal was allowed the orders would either affect the judgment or this would follow as of right if the necessary steps were taken in the District Court.

54 What then is the effect of the order that the District Court judgment of 15 November 2005 be permanently stayed?

55 The case law offers little direct assistance on the effect of a permanent stay but the Courts have considered the effect of a temporary stay of a judgment, as distinct from a stay of execution or a stay of proceedings under it.

56 In Allanson v Midland Credit Ltd (1977) 30 FLR 108 the Full Federal Court considered the effect of a sequestration order being stayed by an appeal to the High Court without reaching a firm conclusion.

57 The question was again considered in Re Marks ex parte The Australian Building Construction Employees and Builders Labourers Federation (1981) 55 ALJR 395, 396 – 7 where Mason J said:

“… the Federation seeks, not a stay of proceedings in the Commission under the orders made there, but a stay of the orders themselves. Mr Ryan QC frankly concedes that he has been unable to discover any case in which a court has in the exercise of inherent jurisdiction stayed an order as distinct from proceedings. … Nonetheless he argues that where the orders sought to be stayed is one which creates rights and does not merely declare rights, the jurisdiction extends to a stay of the order itself. … The distinction between a stay of proceedings and a stay of an order or judgment is perhaps not altogether clear … Speaking generally, the distinction is between a stay of further proceedings in litigation and a suspension of the judgment or order.”

58 In R v P (No 2) [2003] NSWCA 360 at [7] I said:

“… it seems to me that a stay of final orders, that is the suspension of them, must deprive them of continuing legal effect while the stay continues.”

59 Final injunctions are sometimes suspended, when an immediate injunction would cause undue hardship to the defendant, to allow time for remedial works to be carried out or alternative arrangements to be made. In Stollmeyer v Trinidad Lake Petroleum Co [1918] AC 498, 500 Lord Sumner said:

“Their Lordships are, however, of opinion that it would not be right to enforce the injunction at once. The loss to the respondents would be out of all proportion to the appellant’s gain, and on the respondents undertaking, as they had done, to pay from time to time such pecuniary damages as their work may be found to have caused to the appellant on an enquiry before the Court of first instance, they think that justice will be done if the operation of the injunction be suspended for two years to give an ample opportunity to the respondents to carry out any works necessary to remove the causes of complaint …”

60 In my opinion “the operation of the injunction” spoken of by Lord Sumner refers to its legal effect. This is supported by Beswicke v Alner [1926] VLR 72, 80 where Cussen J, giving the judgment of the Full Court, said:

“In order to give the defendant an opportunity to make other arrangements we further order that such injunction not come into operation until the 1 ^st March 1926.”

61 Mason J said that a stay of a judgment suspended it and this is supported by the injunction cases. An injunction which has been suspended does not “come into operation”, that is it has no legal effect, until the suspension has expired.

62 It seems to me therefore that the permanent stay of the “judgment” of 15 November 2005 deprived it of all legal effect or operation. It ceased to be the source of any legal right or duty, there was no judgment debt and nothing was owing under it. The “judgment” had become a scrap of paper.

63 In my judgment therefore the permanent stay consequential on the decision of this Court to set aside the certificate of the panel, meant that “the amount … of the District Court judgment as varied” became nil.

64 The appeal must therefore be allowed.

65 This litigation is a by-product of further problems with the assessment of the costs payable under the order of Coorey DCJ and the later orders in favour of the appellant which have arisen since the judgment of this Court on 7 October 2006.

66 A further assessment dated 19 December 2007 by a different panel of the costs payable to the respondent was the subject of another appeal by the appellant to the Supreme Court. An assessment of the costs payable to the appellant under the orders in his favour was challenged by the respondent by an application for review by a panel. The parties settled this litigation, but not the whole dispute, by a deed in February 2009. They agreed to appoint a costs assessor to undertake “a separate taxation [of all bills] on a party and party basis, not an assessment.”

67 A mutually acceptable assessor was appointed in July 2009 but the costs payable under the various court orders have not yet been quantified. It was not suggested that the deed was relevant to the resolution of the appeal but its recitals help to explain the very great delay that has occurred since the “judgment” was permanently stayed on 27 April 2007.

68 The following orders should be made:

(1) Appeal allowed with costs.
(2) Judgment of the District Court of 18 December 2009 set aside.
(3) In lieu thereof substitute judgment for the plaintiff in the sum of $101,815.51 including pre-judgment interest with effect from 26 July 2010 and costs.
(4) The respondent is to have a certificate under the Suitors Fund Act if qualified.

**********