The operation of a Costs Assessor's Determination is suspended once the Manager, Costs Assessment refers the Application for Review to the panel. This includes the liability to pay an invoice for the original assessor's fees if those fees are also the subject of the review application. The panel may end that suspension if it affirms the original assessor's determination or in any other appropriate circumstances.
8 The plaintiff submits that the demand should be set aside on two bases. The first concerns the provisions for a suspension of the initial determination which are to be found in section 208 KE of the Legal Profession Act. The second basis is that it is alleged there is an offsetting claim in the amount of their claim in the District Court in respect of which they had been awarded $76,011.17. I will turn to each of these matters in turn.
9 It can be seen from the provisions of s 208 J (3) to which I have referred earlier that a certificate of the Costs Assessor may achieve the status of a judgment. That happens when the certificate is filed in the appropriate registry of the court. Until then it merely has in effect as a determination, in other words a decision, on the amount of costs payable.
10 If there is a review then two sections of the act come into play that affect the certificate and a judgment obtained pursuant to it. They are sections 208 KE and sections 208 KF the relevant parts of which are as follows:-
208KE. Effect of review on costs assessor's determination
(1) If the Manager, Costs Assessment refers a determination of a costs assessor to a panel for review under this Subdivision, the operation of that determination is suspended.
(2) The panel may end such a suspension:
(a) if it affirms the determination of the costs assessor, or
(b) in such other circumstances as it considers appropriate.
208KF. Certificate as to determination of panel
(1) On making a determination in relation to an application for review of a costs assessment under this Subdivision, a panel is to issue to each party concerned a certificate that sets out the determination.
(2) If the panel sets aside the determination of the costs assessor, the following provisions apply:
(a) if the amount of costs has already been paid, the amount (if any) by which the amount paid exceeds the amount specified in the determination of the panel may be recovered in a court of competent jurisdiction,
(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 for the amount of unpaid costs,
(c) if the costs assessor issued a certificate in relation to his or her determination under section 208J:
(i) the certificate ceases to have effect, and
(ii) any judgment that is taken to have been effected in relation to that certificate also ceases to have effect, and
(iii) any enforcement action taken in respect of that judgment is to be reversed.
11 It is the referral of the determination of the Costs Assessor to a panel for review that brings into effect the suspension. Until there is that referral there is no suspension.
12 In Scope Data Systems v BDO Nelson Parkhill [2003] NSWSC 137 Barrett J considered section 107 of the Justices Act, which provided for a stay of execution in certain circumstances. For the reasons which he there advanced, and which I adopt, such a stay does not mean that the debt is not due and payable and that therefore there is a genuine dispute. He did however go on to deal with whether such a stay might be a reason to set aside the demand under section 459 J (1) (b). At paragraphs 25 and 26 he concluded his analysis of the cases on this subject in these terms:-
"If, in the present case, a stay of execution of the Local Court orders is in force by operation of s.107 of the Justices Act , reliance upon the statutory demand to produce a statutory presumption of insolvency as a basis for seeking a winding up order will entail for the plaintiff consequences of a serious and adverse kind. The defendant, as a judgment creditor to whom the remedy of execution upon the judgment is expressly denied pending determination of the appeal to this court, will nevertheless be permitted to rely on the judgment as a basis for bringing to bear the pressure for payment and threat of serious and adverse consequences inherent in a statutory demand and a winding up petition, notwithstanding the legislative policy that precludes direct resort to execution. That legislative policy would thereby be circumvented.
If Parliament sees fit to provide that, where a certain type of appeal is initiated in respect of a judgment debt, the judgment creditor is not to be allowed to exercise ordinary judgment creditor remedies by proceeding to execute the judgment, it would, in my view, be inconsistent with the position Parliament has striven to create if the judgment creditor could nevertheless proceed with impunity to initiate winding up proceedings on the basis of the mere existence (even though technically not subject to "genuine dispute") of that judgment debt. Such a course would, in my view, be oppressive in the sense referred to by Austin J in Moutere and by Mullins J in Softex . The circumstances would therefore warrant an order under s.459J(1)(b) setting aside the statutory demand, even though the initiation of action towards winding up was not technically within the black letter operation of s.107 of the Justices Act (cf Australian Cherry Exports Ltd v Commonwealth Bank of Australia (1996) 39 NSWLR 337)."
13 I accept His Honour's analysis of the matter and the cases to which he has referred but the question which has to be considered, in this case, is whether there is a suspension of the judgment. It can be seen that section 208 KE refers to a suspension of the determination. It does not refer to a suspension of the judgment that was entered pursuant to it. The provisions of section 208 KF sub-paragraph (2)(c) would also seem to support the construction that it is only the determination that is suspended. The sub-section specifically considers and allows for the fact that the judgment has continued in effect with enforcement of the judgement taking place prior to the Costs Assessor's certificate ceasing to have effect as a result of the determination of the review panel.
14 There is, of course, scope for the operation of section 208 KE because it could well have effect where a determination of a Costs Assessor has been issued but no application to court for judgment pursuant to that determination has been made. The suspension would prevent an application for Judgement based upon it. It seems that it is a somewhat limited suspension in section 208 KE.
15 Even if this conclusion were not right there is another reason in this case why I do not think that there is a suspension or stay of the judgment as a result of the factual circumstances. I have earlier pointed out that it is when the Manager, Costs Assessment refers the determination of the Costs Assessor to a panel for review that the suspension operates. Under 208 KB once an application for review is duly made the Manager, Costs Assessment is to refer the application to a panel which is to be constituted by two costs assessors. It is apparent from the correspondence that when the initial letter was sent only one costs assessor had been located for the purposes of constituting the panel. The only evidence before me as to when two were located is that in the letter of 11 June. Obviously the reference can not take place until the members of the panel are determined because those members constitute the panel for the purposes of hearing the review. As I have said there is nothing in the evidence other than that letter which might indicate that the reference took place prior to 11 June. This date is, of course, after the expiry of the 21 days allowed for under the statutory demand.
16 In these circumstances it seems that the statutory demand ran its course without there being any suspension of the determination and, accordingly, the statutory presumption of insolvency has arisen. In these circumstances it would seem that the demand should not be set aside. It may be an argument for another day as to whether, if a summons for winding up is filed, the debt is presently due to defendant although, as I have indicated above, if one has regard to the decision of Scope Data Systems this is somewhat unlikely.
Offsetting claim
17 The plaintiff also advanced an offsetting claim and it says it has a claim for damages in at least the sum of $76,011.17. All the affidavit in support does is to refer to that fact without advancing any matters as to the nature of the claim other than annexing a copy of the District Court Statement of Claim.
18 The fact that the plaintiff succeeded before Judge Balla is irrelevant. That judgment has been set aside by the Court of Appeal. I have no evidence and certainly I do not regard the Statement of Claim as evidence as to the facts which might go to the offsetting claim. There was also no evidence before me as to what might be the likely quantification of that claim.
19 Having regard to the total lack of evidence before me as to the facts surrounding the claim or any quantification of it, I cannot conclude that there is an offsetting claim.
Orders
20 I dismiss the proceedings with costs.
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