(3) Leave to appeal - repayment order
28Although the amount in issue was below the threshold, the margin was relatively small and the Court might have granted leave to appeal had it been demonstrated that there was error on the part of the primary judge in failing to make an order for repayment and that an injustice had been suffered by the applicant as a result. Neither of these elements was made good.
29The consent judgment on 11 July 2011 set aside the two certificates issued by the review panel. The right of the applicant to repayment of the moneys paid on 17 December 2010 depended upon the effect of that order. The certificates of the review panel, it may be recalled, did not purport to set aside the determinations of the costs assessor but merely "affirmed" his determinations. The certificates granted by him had not been varied or discharged. On one view, the effect of the quashing order made in the Common Law Division was to leave unresolved the applicant's application to the Manager, Costs Assessment, for a review of the costs assessor's determinations. On that view, subject to one qualification, the liability of the applicant to make the payment remained unaffected by the quashing order, that liability being derived from the determination of the costs assessor.
30The qualification arises from the statutory provision for "the operation of that determination" to be suspended, which occurs when the Manager, Costs Assessment, refers the original determination to a panel for review: s 377(1). If the effect of the order quashing the determinations of the review panel left the referral on foot, the operation of the original determination remained suspended. If the effect of the quashing order were to set aside the referral, the original assessment would remain operative until a further referral was made.
31The applicant's position in respect of these alternatives was obscure. However, in the course of oral argument he submitted that a referral having once been made, no further referral was possible. That was a startling proposition, which appeared to contradict the usual understanding of the operation of s 48 of the Interpretation Act 1987 (NSW), which provides that a statutory function may be exercised "from time to time as occasion requires": s 48(1). However, the submission appeared to assume that the referral to the review panel had not itself been set aside, although there might be justification for a direction reconstituting the panel. That result might have been an outcome for which the applicant would contend, given the applicant's views as to the manner in which the first review panel had misconducted themselves.
32The effect of a quashing order will generally be to allow the body responsible for the impugned decision to reconsider the unresolved application before it. In most circumstances, the constitution of the body for the purpose of the further consideration will be a matter for the body itself to determine, sometimes after considering the views of the parties as to whether the body should be reconstituted to avoid an apprehension of bias, or for practical reasons arising from the lapse of time since the original hearing.
33At the time the payment was made, the suspension on the operation of the costs assessor's certificate had been lifted by the review panel's order. Once the order was set aside, there was a separate issue as to the effect of acts done in reliance on the order prior to it being set aside. Thus, although at the time he made the payment the applicant already had proceedings on foot challenging the validity of the order, he did not seek to protect his position by obtaining a stay from the Court. A stay might well have been available on the basis that, if successful in his appeal, his liability to pay would continue to be suspended.
34Rather, the applicant took a different line in the hearing in this Court. He relied on four arguments which may be summarised as follows:
(1) according to the principle of merger, the original assessments were incorporated into the review panel's determination and no longer provided any basis for his liability to pay costs once the review panel's determinations were set aside;
(2) the bankruptcy notice issued by the first respondent, which caused the payment, was an abuse of process because Hall Chadwick knew it had no entitlement to claim the debt at that time;
(3) by extension of the decision of this Court in Frumar v Owners of Strata Plan 36957 [2010] NSWCA 172, once the certificates were set aside, the judgments based upon them had no further operation and no debt was payable, and
(4) for Hall Chadwick to benefit from the payment in circumstances where it was obtained through its own wrongdoing would be inequitable and accordingly it was not entitled to retain the payment.
35As the applicant accepted, the first ground was not relied upon before the primary judge, was not identified in the notice of appeal and was not articulated in written submissions. Apart from those procedural flaws, for the reasons briefly noted below, it lacked substance. It could not provide a basis for a grant of leave to appeal.
36The second ground faced the same procedural flaws as the first. The fourth ground was not put in those terms before the primary judge, but did appear in the notice of appeal (as ground 7). However, both relied upon a finding of wrongdoing on the part of the first respondent, an issue which will be addressed in respect of the challenge to the costs orders.
37The third ground formed the basis of the order sought before the primary judge and is an available basis for seeking leave to appeal.
38It is sufficient to deal in this part with the first and third grounds upon which leave was sought and the question whether, if there were arguable error on the part of the primary judge, any injustice has resulted to the applicant.
39Dealing with the substance of the first ground, the applicant submitted that according to the "doctrine of merger" the original costs assessor's determination no longer existed, having been subsumed into the later (but invalid) determination of the review panel. Accordingly, the submission implied, there was simply no outstanding liability in any specified amount as at the date of the payment.
40This argument was not developed by reference to authority, but may have derived by analogy from the established doctrine that a cause of action merges in a judgment and thereafter no longer has an independent existence: Blair v Curran [1939] HCA 23; 62 CLR 464 at 532 (Dixon J) applied in many subsequent authorities, including Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21; 164 CLR 502 at 507. However, the critical condition for that result is that the cause of action has passed into judgment, which judgment is standing at the time that further proceedings are sought to be brought on the cause of action: Chamberlain at 507 and 508 (Deane, Toohey and Gaudron JJ, Brennan and Dawson JJ agreeing).
41Somewhat closer to the present circumstances is the principle in Wishart v Fraser [1941] HCA 8; 64 CLR 470. That case involved an application for prohibition against an order of a magistrate convicting an offender in circumstances where he had appealed the conviction to a Court of Quarter Sessions, which had confirmed the magistrate's order. As explained by Starke J at 478:
"If the Court of Quarter Sessions had reversed the decision of the stipendiary magistrate, its judgment would have held 'the field to the exclusion' of the conviction by the stipendiary magistrate. And when Quarter Sessions affirmed the conviction, its judgment was equally conclusive, for it operated as a judicial determination by a competent and higher authority that the conviction was right. ... That judgment therefore holds the field so long as it stands unreversed, and precludes this court making any judicial determination to the contrary."
42How these principles should apply in respect of a determination by a panel which is clearly not a court need not presently be considered. To speak of a doctrine of "merger" is to conjure physical images of irreversible fusion. However, that image is inapt. The law is replete with examples of quashing orders which set aside one decision, without unravelling all that preceded it. The submission was untenable.
43Secondly, the applicant relied before the primary judge upon the decision of this Court in Frumar as authority for the proposition that once the certificates had been set aside, the judgments registered in the District Court could not be relied upon as a basis for asserting an enforceable debt: Frumar at [47] (Handley AJA). However, Frumar had no direct application in the present case, as the primary judge correctly held. The certificate relied upon as the basis of the judgment in the District Court in that case was the certificate of the review panel, which was set aside leaving the respondent in those proceedings without an enforceable debt. In this case the source of the debt was the certificate of the costs assessor which was not set aside by the review panel, nor affected (except in respect of the suspension of its operation) by the setting aside of the determination of the review panel. This argument may be seen to depend on acceptance of the submission as to merger (rejected above), without which it is untenable.
44The primary judge acted on the basis that the suspension of the operation of the assessor's determination was still in existence: at [42]. However, because the determination was still on foot, the liability was extant, even though not enforceable. Her Honour proceeded on the basis that the applicant would be entitled to restitution from Hall Chadwick only if the costs assessor's decision were to be set aside.
45An order for repayment was not a necessary consequence of the quashing order, but there may have been a question as to whether repayment may have been available if the payment had been made under a mistake as to the enforceability of the debt, based on the validity of the review panel's order ending the suspension. However, there was no evidence before either the primary judge or this Court as to the reason for the payment, other than an inference that it was a response to the threat implicit in the service of the bankruptcy notice.
46Thirdly, even if the applicant had an arguable case that the primary judge failed to consider factors relevant to an order for repayment, there were a number of steps necessary before leave would be granted in such a case. To the extent that the matter was argued before the primary judge (and in this Court) on the basis of some equitable entitlement to repayment or restitution, that approach was not open given the nature of the relief sought as consequential upon the quashing order. There was no pleading of any equitable basis for relief, nor was there any evidence relied upon other than an inference that Hall Chadwick was, in some sense, acting abusively in retaining the payment. That contention will be addressed (and rejected) below.
47Fourthly, the applicant failed to demonstrate that he suffered an injustice by the refusal of the order for repayment. The applicant has a current and unchallenged liability to pay an amount on account of costs. The amount has not been agreed, but it has been assessed. Until the assessment is varied, that liability stands, although it may not be presently enforceable. However, the lack of enforceability is, in one sense, irrelevant once the payment has been made. In addition, the liability will only be varied if a review panel so determines. The determination of the first review panel was set aside on 11 July 2011. There is no evidence before this Court as to why a further determination has not yet been made. Not only did the applicant not complain of the delay, but his submissions to this Court suggested that he did not wish the review to proceed. Nor did he suggest in this Court that there was any egregious error on the part of the costs assessor making it likely that his assessment would be reduced by a significant amount. Finally, the applicant did not suggest that he had any concerns as to the ability of Hall Chadwick to repay the amount of any overpayment if the assessment were significantly reduced.
48In these circumstances, the applicant failed to demonstrate any reasonable doubt attending the judgment below in respect of the repayment claim, nor any practical injustice from the failure to make such an order. For these reasons the Court declined to grant leave to appeal from the refusal of the primary judge to order repayment.