Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3]

[2011] WASCA 80

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE COURT OF APPEAL (WA)

CITATION:   PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD -v- COMPUTER ACCOUNTING AND TAX PTY LTD [No 3] [2011] WASCA 80

CORAM:   PULLIN JA

DELIVERED          :   10 MARCH 2011

FILE NO/S:   CACV 76 of 2008

BETWEEN:   PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD

First Appellant

DONALD CAMPBELL-SMITH as Executor of the Estate of MARTIN PAUL BANNING
Second Appellant

AND

COMPUTER ACCOUNTING AND TAX PTY LTD
Respondent

ON APPEAL FROM:

Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA

Coram  :SIMMONDS J

Citation  :COMPUTER ACCOUNTING AND TAX PTY LTD -v- PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD [2008] WASC 133

File No  :CIV 2265 of 2006

Catchwords:

Practice and procedure - Application for an order suspending the enforcement of a costs order - Test for suspension order - Turns on own facts

Legislation:

Civil Judgments Enforcement Act 2004 (WA), s 15

Result:

Application dismissed

Category:    B

Representation:

Counsel:

First Appellant               :     Mr S V Forbes

Second Appellant          :     Mr S V Forbes

Respondent:     No appearance

Intervening Applicants    :     In person

Solicitors:

First Appellant               :     Holborn Lenhoff Massey

Second Appellant          :     Holborn Lenhoff Massey

Respondent:     No appearance

Intervening Applicants    :     In person

Case(s) referred to in judgment(s):

Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [2010] WASCA 171

Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308

Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183

1. PULLIN JA:   This is an application by Angela and Hartmut Frigger, who are not parties to the appeal, seeking an order suspending payment of taxed costs in the sum of $6507.77.  Although there is a long history, it is only necessary for the purpose of this application to begin with the judgment following the publication of reasons by the Court of Appeal in Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183. The orders made were that a judgment of Simmonds J be set aside in part and in lieu that Professional Services pay to the company associated with the Friggers, that is Computer Accounting, just under $300,000 plus interest, but on the other hand, that Computer Accounting pay to the appellants a sum in excess of $700,000 plus interest.

2. Before the appeal, Professional Services had paid approximately $1.15 million pursuant to the judgment of Simmonds J.  I am informed that as a result of the appeal, Computer Accounting was obliged to repay about $800,000.  That has not happened.  Computer Accounting is now in liquidation and Professional Services is in administration.

3. It seems then that the lawyers acting for Computer Accounting ceased to act after the Court of Appeal decision and Mrs Frigger then made an application to suspend the judgment of the Court of Appeal pursuant to s 15 of the Civil Judgments Enforcement Act 2004 (WA). This application was dismissed by consent and also by consent on 11 August 2010, Mr Frigger and Mrs Frigger were ordered to pay the costs of the application as taxed or agreed. The bill of costs was then taxed and allowed at $6,507.77. Mr and Mrs Frigger seek to suspend execution for the recovery of those costs.

4. In Mrs Frigger's affidavit she contends that the judgment creditors are insolvent, which appears to be the case, and in relation to other proceedings involving the judgment creditors, Mrs Frigger believes that she and her husband will be awarded costs, and if that occurs then the judgment creditors are likely to owe more to Mr and Mr Frigger than they owe on the bill of costs taxed on 3 December 2010.  Mrs Frigger also contends that the bill of costs when taxed contained 'identified clerical and manifest errors'.  In fact, there was no objection to the signing of the allocator and that document was signed, so the costs are payable.  That is, the $6,507.77.

5. The other proceedings that Mrs Frigger refers to are proceedings where Professional Services and Banning sought a freezing order against Mr and Mrs Frigger.  It seems that a freezing order was made in December 2009; it was made subject to an undertaking as to damages.  Eventually on 7 July 2010, the freezing orders were discharged; there was then an argument about costs; both parties applied for costs and eventually the costs question was argued before Simmonds J on 14 October 2010 and his Honour reserved his decision and it has not yet been handed down.  If Professional Services and Banning obtain a costs order then it will simply add to the debt that the Friggers owe; it will not support the Friggers' argument in this case.  If, however, the Friggers obtain the costs orders, questions then arise; first as to whether the moneys could be recovered from the estate of Banning, as to which Mrs Frigger says prima facie that would not be possible because in the case of Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [2010] WASCA 171 there is an indication in that set of reasons that the estate of Banning is insolvent.

6. However, the other question that arises is whether or not there is any right of set-off in relation to costs ordered in relation to the application that had been made by Mrs Frigger and Mr Frigger, and which had resulted in the dismissal of that application and in the costs of $6,507.77 being paid, and the costs that might be ordered in relation to the freezing order proceedings.  The parties to this application have not come ready to argue that point and there is a relatively small amount involved.  It would be a factor relevant to the exercise of discretion as to whether the small amount involved would warrant sending the parties off to do research and come back and argue on another day the question about whether or not there is any right of set‑off in the circumstances.

7. Now, a court may only make a suspension order if there are special circumstances justifying the making of the order.  The general principles that apply are set out in Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308 and those principles have been applied to applications under the Civil Judgments Enforcement Act.  It is for the applicant for a stay to move the court to a favourable exercise of its discretion.  The first issue which usually has to be confronted is whether or not a stay is necessary to preserve the subject matter or integrity of the litigation where a refusal of a stay could create practical difficulties in respect of the relief, usually in circumstances were there is an appeal on foot but, in this case, in circumstances where it is said there is a potential for a costs order and a right of set-off.

8. In this matter there is, of course, no appeal from the costs order which resulted in the taxation of costs.  No application has been made by the judgment debtor to set aside the certificate of taxation.  There are at present no costs orders in other proceedings which have been made in favour of the judgment debtors, nor any orders made where costs have been quantified by taxation.  The costs in the proceedings before Simmonds J concerning the freezing order may, as I have already said, add to the indebtedness of the judgment debtors and, as I have indicated, the costs order that might be made in favour of the Friggers then would require consideration of the law relating to equitable set‑off.

9. The appellants are entitled to receive the benefit of the order made by the Chief Justice on 19 July 2010.  There is no genuine issue of convenience which lies in favour of the judgment debtors.  There are no special circumstances which justify the making of a stay order and, as a result, the application will be dismissed and I would so order.