First Applicant v Respondent

Supreme Court of Victoria|2016-07-18|Before: DERHAM AsJ

PRACTICE AND PROCEDURE - Application to set aside warrant of execution - Warrant issued pursuant to order of the Costs Court on a taxation of costs between solicitor and client and Barrister and client - Order not an order for payment of costs - Warrant issued irregularly - Warrant set aside - Scott v Evia Pty Ltd [2008] VSC 324 distinguished.

The Second Applicant appeared in person (pursuant to leave)

1 By summons filed on 13 July 2016, the respondent ('Ms Liu') applies for an order that a warrant of seizure and sale issued by the Court on 16 May 2016 be set aside. The application is supported by an affidavit of Ms Liu affirmed on 4 July 2016 ('Liu affidavit').

2 Mr Pippett appeared and represented himself. Ms Wald of Counsel, who is a party to the proceeding, but not a party to the application before me today, applied for leave to appear, which in the circumstances I granted.

3 The first applicant ('Mr Pippett') is a solicitor who acted for the respondent in family law proceedings. Mr Pippett commenced proceedings in the Magistrates' Court of Victoria claiming payment of legal costs said to be due to him. By order of the Magistrates' Court at Melbourne made on 12 May 2015, the Magistrates' Court proceeding was stayed until further order and each party was given liberty to apply on giving 21 days written notice to the other.[1] Ms Liu obtained that stay on the basis of Mr Pippett's failure to fulfil his disclosure obligations under the Legal Profession Act 2004 ('LPA').[2]

4 Mr Pippett commenced proceedings in the Costs Court by summons filed 30 September 2015 seeking a taxation of the legal costs said to be due to him.[3] After some interlocutory orders were made the taxation took place on 22 February 2016. The result of the taxation was declared by order made on 22 February 2016.[4] The order provided:

1. Janine Wald be added as a second applicant.

The applicants' costs be taxed at $16,046.01, together with the sum of $800 representing the first applicant's costs of the day on 19 January 2016, making a total of $16,846.01.
There be no order as to costs of the proceeding.

5 The order was authenticated on the day by Associate Justice Wood.

6 Mr Pippett applied for the issue of a warrant of seizure and sale. The application was supported by an affidavit sworn by Mr Pippett on 9 May 2016 and re-sworn on 16 May 2016.[5] In the affidavit, Mr Pippett states that he is the applicant and that it is his costs that were taxed by the order in question. The warrant was issued and dated 16 May 2016.

TO THE SHERIFF:

In respect of the Order dated 22 February 2016 by which it was ordered that Ting Liu pay $16,846.01 to the Applicant and the Second Applicant, Levy On The Property of Ting Liu which is authorised by law to be taken in execution for -...

(a) $16,846.01 being now due and payable for taxed costs;

(b) [an amount for interest on the taxed costs];

(c) [the costs of the warrant];

(d) [the Sherriff's fees and expenses for the warrent]

And Pay the amount so levied other than your fees and expenses to the Applicant Bruce Pippett or otherwise as the law requires And indorse on this warrant immediately after you have performed all your obligations under it a statement of the date, time and place at which you had executed or attempted to execute the warrant and the results of the execution and send a copy of the statement to the Applicant, Bruce Pippett.

*For the purposes of section 52(2) of the Transfer of Land Act 1958, the land in the folio or folios of the Register kept under that Act identified by folio number(s) Volume 10683 Folio 308 is effected by this warrant. [emphasis added]

8 By letter dated 17 May 2016, the Sheriff notified Ms Liu that to avoid any further costs that may be incurred in the seizure and sale of her property, the debt shown in the letter should be paid immediately.[6] By letter dated 28 June 2016 from the Sheriff, Ms Liu was advised that the Sheriff's Office has been instructed to sell by public auction the interest of Ms Liu in the property situate at and known as 4 Woodlands Grove, Mitcham in Victoria (Certificate of Title Volume 10683 Folio 308).

9 As I have mentioned, the taxation of Mr Pippett's costs (and as it also turned out. the taxation of the barrister's fees engaged in the Family Court proceedings - Ms Janine Wald) took place on 22 February 2016. In the taxation Mr Pippett was represented initially by Mr M Bearman of Counsel and Ms Liu was represented by Mr J Korman of Counsel (pursuant to the Duty Barristers' Scheme). The taxation took the bulk of the day.

10 It turned out that in the course of the taxation hearing that Ms Wald had provided a costs disclosure to Ms Liu on 5 March 2014 and Ms Liu and Ms Wald entered into a costs agreement directly on that day. Nevertheless, the Bill of Costs filed by Mr Pippett included as disbursements the costs charged under that costs agreement between Ms Wald and Ms Liu. His Honour Associate Justice Wood determined that it was appropriate to add Ms Wald as an applicant because:

(a) he was not satisfied that there was any liability between her and Mr Pippett, but it was clear that there was a costs agreement between her and Ms Liu; and

(b) it was in the interests of the cost effective resolution of the disputes as to costs to deal with the costs of Ms Wald at the same time as the costs claimed by Mr Pippett.[7]

11 Mr Bearman then announced that he had instructions to appear for Ms Wald as well as Mr Pippett.[8] Then evidence was given by several witnesses, including Ms Wald, Mr Pippett and Ms Liu. After lunch, Mr Pippett was represented by a specialist costs lawyer and the Bill of Costs and Notice of Objections were considered, argued and his Honour made his assessment. Costs of the taxation were argued by reference to the amount taxed off the Bill and an offer of compromise by Mr Pippett. After giving reasons for his determination that there should be no order as to costs of the taxation, Associate Justice Wood expressly stated that, by his order, he was not making an order as to payment of the costs so taxed.[9]

12 Ms Liu relied on her affidavit and contended that the liability for the payment of the costs was a matter before the Magistrates' Court and the warrant should not have been issued.

13 Mr Pippett submitted that the order was an order for costs and it was implicit that payment of the costs was to be made in accordance with the order. He also submitted that even if the taxation of the costs as between him and Ms Wald, on the one hand, and Ms Liu, on the other hand, was not an order for payment of those costs, the order for the payment of the costs of $800.00 in respect of the first applicant's costs of the day (in the Costs Court) on 19 January 2016, was an order for the payment of costs, just as an order of costs of the taxation itself would have been had the Associate Judge been persuaded to make one.

14 Ms Wald submitted that although she had not been served with the summons she was interested in the subject matter of the proceeding and the enforcement of the warrant because her costs as a barrister were mixed into the total of the costs taxed by the Costs Court and thus the subject of the warrant. However, she was concerned to inform the Court that she had nothing to do with the issue of the warrant. She had not instructed Mr Pippett to issue the warrant on her behalf.

15 By s 3.4.17(1) of the LPA, it is provided that if a law practice does not disclose to a client anything required by Division 6 of Part 3.4 of that Act to be disclosed, the client need not pay the legal costs unless they have been reviewed under Division 7. It was presumably this provision that was invoked by Ms Liu in order to obtain a stay of the claim in the Magistrates' Court.

16 By s 3.4.40(1) of the LPA, a law practice that has given a bill in accordance with Division 6 is entitled to apply to the Costs Court for a review of the whole or any part of the legal costs to which the bill relates. It was this provision that Mr Pippett invoked in his application for a review of his Bill of Costs after the stay granted by the Magistrates' Court.

17 Where on a taxation of costs in the Costs Court an amount is found to be due, the result shall be stated in the form of an order: see r 63.56(1) of the Supreme Court (General Civil Procedure) Rules 2015 ('the Rules').[10] Formerly, the result of a taxation was stated in the form of a certificate.[11] Under the current procedure, where the Costs Court taxes a bill, or otherwise taxes or assesses an amount for costs, the result is stated in the form of an order. That result is a quantification and, without express words, it is not an order for payment.

18 An obligation to pay the costs so quantified requires the Court's order to say so, and as I have said, the Costs Judge explicitly said he would not do so. Had his Honour done so then to r 63.11 of the Rules would, in this case, have provided the source of his power. Under that rule, where costs are taxed otherwise than under a judgment or order for costs, an order of the Costs Court for payment of any amount found to be due may be enforced in the same manner as a judgment for the payment of money.

19 The order made by Associate Justice Wood on 22 February 2016, and the transcript of the hearing of the taxation, make clear that the order is, subject to one qualification, no more than an order as to the amount found to be due by Ms Liu to Mr Pippett and Ms Wald as a result of the taxation and not an order for payment pursuant to r 63.11 of the Rules.

20 The qualification concerns that part of the order that provides for Mr Pippett's costs of the day on 19 January 2016. With the understanding gained by reference to the background to the order and the course of the proceeding, one can readily infer that it is very likely that the learned Associate Judge intended to make an order for payment of this sum by Ms Liu to Mr Pippett. But the order does not distinguish between the taxed costs and the costs of the day of 19 January 2016. In both cases there is no order for the payment of those sums.

21 It is worth contrasting the order made by his Honour with the order under consideration in the decision of Hansen J (as he then was) in Scott v Evia Pty Ltd; Scott v Charitopoulos.[12] That was an appeal from an order made by the Taxing Master.[13] The order the subject of appeal was the taxation of an order for costs made by a Judge of the Court. The Taxing Master's order stated:

The costs of the plaintiffs are taxed and allowed in the sum of $123,587.41 to be paid by the Second and Thirdnamed Defendants. [emphasis added]

22 At issue was the power of the Taxing Master to make the order for payment. Hansen J concluded that the Taxing Master had that power.[14]

23 In this case, the taxation occurred in the context of a review on the application of the lawyer where his proceeding to recover the legal costs had been stayed for non-compliance with the disclosure requirements of the LPA. The Magistrates' Court proceeding was still on foot and that is where any Court order for payment of the legal costs was intended to be made and should be made. All that the Costs Court was doing by the order was declaring the amount of the costs. It did not deal with issues of breach of contract by the lawyer (issues that Ms Liu attempted to raise in the taxation) and other claims raised in answer to the proceedings for recovery of the costs.

24 A warrant of execution must accord with the judgment or order upon which it is based. If it does not accord with the judgment or order it may be set aside or amended as irregular.[15] The power to set aside a warrant arises either under r 2.01 of the Rules or pursuant to the inherent jurisdiction of the Court.

25 The warrant in this case does not accord with the order. The order is not an order that Ms Liu pay the costs taxed, yet the warrant states that it is and is a process for the enforcement of payment. That is a sufficient basis to set aside the warrant as being irregular. It is no answer to this proposition that the Associate Judge intended to provide for payment of the sum of $800.00 in respect of the costs of the day on 19 January 2016, as there is no order for payment of this sum either.

26 There is an additional problem with the warrant which itself may have formed a ground to set it aside as irregular. The warrant is issued in respect of the costs taxed for the benefit of Mr Pippett and Ms Wald. The warrant recognises this fact in its opening words[16] but goes on to require the Sheriff to pay the amount levied (other than the Sheriff's fees and expenses) to the Applicant Bruce Pippett or otherwise as the law requires.

27 Ms Wald has provided no instructions for the issue of the warrant and, I note, Mr Pippett's affidavit in support of the issue of the warrant states that he is the applicant and that it is his costs that were taxed by the order in question. That statement is not correct. It has led to the issue of a warrant that could have led to the payment of costs due to Ms Wald being paid to Mr Pippett. Moreover, the order does not distinguish between the amounts due to each lawyer as set out in the Bill of Costs. That process is yet to be undertaken, and can be undertaken, by reference to the Bill of Costs and the transcript of the taxation review before the Costs Court Judge.

28 The order made by Associate Justice Wood on 22 February 2016 does not provide a proper basis for the issue of the warrant of seizure and sale. The issue of the warrant was therefore irregular and should be set aside. The appropriate course for Mr Pippett was to cause the proceeding in the Magistrates' Court to be brought back on for hearing pursuant to liberty to apply.

29 In relation to the payment of the costs of the day on 19 January 2016, it may be that an application could be made under the 'slip rule'[17] for amendment of the order, depending on the course taken in the Magistrates' Court proceeding. It is, however, not necessary or appropriate to say anything conclusive about that matter.

[4] Liu affidavit [6] and Exhibit TL-2 to the Liu affidavit.

[5] The affidavit was re-sworn because, it appears, it originally made no reference to any land under the operation of the Transfer of Land Act 1958 registered in the name of Ms Liu. A paragraph was added to the affidavit in handwriting identifying the land in Ms Liu's name.

[7] Transcript, 22 February 2016 ('Transcript'), p 13-14.

[10] Rule 63.56(1) of the Rules provides 'If the Cost Court taxes a bill or otherwise fixes or assesses an amount for costs, the result shall be stated in the form of an order.'

[11] Section 161 of the Supreme Court Act 1958 and former O 65 r 19 of the Rules.

[12] [2008] VSC 324 ('Scott').

[13] the predecessor of the Costs Court Judge.

[14] Scott at [32] and [35]-[37].

[15] O'Neill v Hart (No.2)[1904] ArgusLawRp 97; [1905] VLR 259; Webber v Hutchins [1841] EngR 645; (1841) 8 M&W 319; 151 ER 1060; Crowley v Union Bank [1904] VicLawRp 54; (1903) 29 VLR 385 (Order for two persons jointly against two persons jointly and an execution issued for one creditor only against one debtor only).

[16] It recites "In respect of the Order dated 22 February 2016 by which it was ordered that Ting Liu pay $16,846.01 to the Applicant and the Second Applicant..."

Supreme Court (General Civil Procedure) Rules 2015

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