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[2011] NSWCA 252
Court of Appeal (NSW)
2011-07-12
Allsop P, Beazley JA
Original judgment source is linked above.
Judgment 1ALLSOP P: This is an application for leave to appeal from the dismissal of a motion of the defendant in the District Court for a stay of the enforcement of any orders related to terms of settlement that had been filed in the District Court in November 2008. The appeal, should leave be given, was heard concurrently. 2The matters in dispute raise significant issues about the meaning of some of the Uniform Civil Procedure Rules 2005 (NSW) (the "UCPR") and the practice of the District Court in recording orders in its computerised record system. In particular, it raises questions about when a judgment or order is taken to be entered and what is required to be recorded for the purposes of the UCPR, r 36.11. 3Before coming to the terms of the motion filed by the defendant in the District Court, being the subject of the appeal, it is necessary to refer to the facts as they unfolded. The appreciation of those facts, however, must take place in the context of the Civil Procedure Act 2005 (NSW) (the "CPA") and the UCPR.
The facts here 4The applicant, Ms Jay Mills, had a dispute with Ms Greta King and Ms King's company, the respondent, Futhem Pty Ltd ("Futhem"), over the lease of a restaurant known as "The Snooty Fox". The details of the dispute need not be described at length. It is more than adequate to repeat what the learned primary judge said at [4]-[7] of her reasons: "[4] On 17 May 2007 the plaintiff commenced proceedings against the defendant as guarantor under a lease of retail premises at Windsor commencing 1 October 2005 and terminating 30 September 2008. The amount claimed was $125,415 plus interest under the lease. [5] In July 2007 the defendant filed a defence denying liability under the guarantee and raised a number of issues including wrongful termination of the lease and relief was sought under the Contracts Review Act 1980. [6] On 15 July 2008, for the reasons expressed in a written judgment, Judge Delaney refused the defendant's application to remove the proceedings to the Residential Tenancies Tribunal. [7] The matter came before His Honour again on 23 October 2008, when it was noted on the file that the action was settled and it was stood over on the basis that terms of settlement would be filed with the Registrar." 5On 25 November 2008, the parties signed a document entitled "terms of settlement". The first page of the document was so entitled and it bore the form of a document in prescribed form (although no relevant form of the UCPR is entitled "terms of settlement"). The annotation on the top left-hand corner of the first page said that it was Form 33 (version 2) referable to UCPR, r 36.11. Form 33 of the prescribed forms deals with notices of discontinuance. The nearest relevant form would be either Form 43 for a judgment or order, or Form 44 for a consent judgment or order. The first page was inscribed with the names of the parties and the relevant case number. The second page contained the same heading "terms of settlement". Under this document were the signatures of Ms King as the sole director of the respondent and the signature of the applicant, Ms Mills, above which there was the following: "BY CONSENT AND WITHOUT ADMISSION
The primary judge's decision 18The primary judge (Truss DCJ) noted that the defendant asserted that the judgments referred to in paragraphs 2A and 2B of the notice of motion were entered irregularly or illegally in that they were entered contrary to the requirements of Pt 36. The first argument of the defendant relied upon r 36.1A. That rule provides for the entry of judgment by consent orders. Sub-rule 2 enjoins the court from giving or entering judgment in terms restricting disclosure of the judgment unless the court, for special reasons, orders otherwise. Sub-rule 3 makes plain, however, that this does not affect an agreement inter partes not to disclose the terms of the agreement. The nature of the argument rejected by her Honour can be seen from the terms of [26]-[28] of her Honour's reasons: "[26] The form of the judgment as entered on 29 April 2010, in my view, substantially complies with the prescribed form (Form 44). The judgment, which was purportedly entered, was clearly of the nature contemplated by subr (1) being in the terms of an agreement dated 23 November 2008. The fact that [4] of the terms provided that they not be disclosed is a matter contemplated by subr (3) and was part of the agreement between the parties. [27] The defendant relied upon [4] of the terms which provided that they not be disclosed and submitted that there was an irregularity in that the judgment as entered does not reflect the parties' agreement. I am not persuaded by this submission given that there clearly was an agreement that there be judgment for the plaintiff for $76,000 inclusive of costs and it appears that no order in accordance with [4] of the terms has ever been made. [28] The defendant relied upon Commonwealth of Australia v Gretton [2008] NSWCA 117, in particular [92]. That decision concerned the costs consequences of a refusal of a Calderbank offer which contained a non-disclosure clause. I do not consider that this decision assists the defendant's case." 19The primary judge then referred to an argument based on r 36.11(2A). In answer to this argument the learned primary judge said the following at [30] and [31] of her reasons: "[30] The evidence before the Court does not enable me to determine if and when the judgment was entered into the Court's computerised record system (subr(2)). In any event, to the extent that the defendant relies on r (2A), in this case the Court did not direct that judgment be entered. The Court did, in fact, enter the judgment [on] 16 December 2008 (on the front page of the terms of settlement). [31] The defendant relied upon the statement, which appears at [36.11.5] in Ritchie's Uniform Civil Procedure NSW , that the approved form for registration or filing of a judgment is Form 45 and submitted that there was no evidence of such form being filed. I do not however consider that this assists the defendant's argument given s 80 of the Interpretation Act 1987 which relevantly provides: 80 Compliance with forms (1) If a form is prescribed by, or approved under, an Act or statutory rule, strict compliance with the form is not necessary but substantial compliance is sufficient. " 20For these reasons, the primary judge refused relief.
Submissions before this Court 21The essential elements of the applicant's argument before this Court were as follows: (a) No judgment was in fact or in law ever entered in the District Court. (b) If entered, the judgment was in breach of the mandatory provision of UCPR, r 36.1A(2) prohibiting non-disclosure of the judgment. (c) No judgment was "signed" by the Registrar as required by UCPR, r 36.11(2A). (d) The form of the document dated 29 April 2010 was not a proper reflection of the terms of settlement. It was an interpretation done in the absence of a party by the Registrar. Apart from the absence of that element of procedural fairness, it did not reflect the nature of the terms of settlement. 22The respondent, Futhem, argued as follows: (a) The orders were made and entered on 16 December 2008, there being evidence of entry into the computer system on 16 December 2008 being consistent with the sealed copy. (b) No error was disclosed in the primary judge's reasons.
Determination 23It is perhaps convenient first to set out rr 36.1, 36.1A, 36.11 and 36.12 of the UCPR. "36.1 General relief (cf SCR Part 40, rule 1; DCR Part 31, rule 8; LCR Part 26, rule 1) At any stage of proceedings, the court may give such judgment, or make such order, as the nature of the case requires, whether or not a claim for relief extending to that judgment or order is included in any originating process or notice of motion. 36.1A Consent orders (1) The court may give judgment, or order that judgment be entered, in the terms of an agreement between parties in relation to proceedings between them. (2) Unless the court, for special reasons, otherwise orders, the court must refuse to give judgment, or order that judgment be entered, in terms that restrict, or purport to restrict, any disclosure of the terms of the judgment or order. (3) Subrule (2) does not limit the effect of any agreement between the parties that contains provisions that restrict the parties, or purport to restrict the parties, from disclosing the terms of the agreement or of the judgment or order. ... 36.11 Entry of judgments and orders (cf SCR Part 41, rule 11) (1) Any judgment or order of the court is to be entered. (2) Unless the court orders otherwise, a judgment or order is taken to be entered when it is recorded in the court's computerised court record system. (2A) If the court directs that a judgment or order be entered forthwith, the judgment or order is taken to be entered: (a) when a document embodying the judgment or order is signed and sealed by a registrar, or (b) when the judgment or order is recorded as referred to in subrule (2), whichever first occurs. (3) In this rule, a reference to a judgment or order of the court includes a reference to any judgment, order, determination, decree, adjudication or award that has been filed or registered in the court, or of which a certificate has been filed or registered in the court, as referred to in section 133 (2) of the Civil Procedure Act 2005. (4) This rule does not limit the operation of rule 36.10. 36.12 Registrar to furnish copies of judgments and other documents (cf SCR Part 41, rule 15; DCR Part 31, rule 16; LCR Part 26, rule 7) (1) Unless the court orders otherwise, on payment of the fee prescribed by the regulations under the Civil Procedure Act 2005, the registrar must: (a) furnish a sealed copy of any judgment or order that has been entered in the proceedings to any person who applies for such a copy, or (b) seal a document provided by the person that, in the opinion of the registrar, accurately sets out the terms of the judgment or order. (1A) A document sealed by a registrar in accordance with subrule (1) (b) is taken to be a sealed copy of the relevant judgment or order. (2) Unless the court orders otherwise, on payment of the fee prescribed by the regulations under the Civil Procedure Act 2005, the registrar: (a) must furnish to any party to any proceedings, and (b) may furnish to any other person appearing to have a sufficient interest in the proceedings, a copy of any pleading or other document that has been filed in the proceedings. (3) Despite subrules (1) and (2), the registrar must not furnish a copy of an adoption order made in proceedings under the Adoption Act 2000 to any person, except the plaintiff in those proceedings, unless the court orders otherwise." 24It is necessary to ascertain what in law occurred on 16 December 2008. It appears to be clear what happened, factually. A Registrar dated and stamped, but did not sign, the terms of settlement and an entry was made on the District Court file and in the computerised records of the Court in the fashion I have set out. It is also clear that at no time was there an entry into the Court's record system of the full terms of the terms of settlement. It remains to be determined, therefore, whether the terms of settlement have been entered in the sense of the entry of a judgment or order. 25As stated above, r 36.1A provides that the court may give judgment or order that judgment be entered in terms of an agreement between the parties. There appears no reason why the terms of settlement do not fall within that description. By the terms of the document, the parties have not made clear the status of the four paragraphs. In content and text, paragraphs 1 and 4 appear to be by way of judgment or order. (I leave to one side the obvious difficulty with paragraph 4 under r 36.1A(2).) The parties did not state that paragraphs 2 and 3 were qualifying agreements. All four paragraphs were part of the document titled "terms of settlement", which was filed. In argument, Mr de Robbillard for Ms Mills submitted that paragraphs 2 and 3 were paragraphs which qualified the nature of the verdict and judgment provided for in paragraph 1. Therefore, it was submitted, there was an implied limitation on the verdict and judgment in paragraph 1 by the contents of paragraphs 2 and 3 such that, upon the default by Ms Mills on any two monthly instalments, the only enforcement remedy was leave to issue a writ of execution forthwith. Thus the applicant argued that paragraphs 2 and 3 were more than a mere agreement of the parties providing for qualification contractually, inter se, of the effects of verdict and judgment in paragraph 1. 26I will return to the proper meaning of the terms of settlement in due course. Whatever the document's meaning, was it entered into the computerised court record system? The answer to this question is, no. The entry in the computerised court record system did not amount to what is contemplated by Pt 36, r 36.11(2) of the UCPR. What needs to be recorded in the court's computerised record system is the judgment or order. Given that the only document that had been filed and that the parties had sought the Court to deal with was the document entitled "terms of settlement", for that agreement to be the basis of the Court's judgment for the purposes of r 36.1A, there must have been a recording of the judgment or order, in its terms. It can be accepted that the Court would not make a judgment or order in terms of paragraph 4. But the parties, by filing the document, have requested it (or such of it that lawfully can be made) to be made as a record of the Court. This would require for entry under r 36.11(2) the recording of the judgment or orders in the terms of settlement. 27The proper construction of r 36.11 is, it seems to me, that unless a court orders otherwise for r 36.11(2) or unless a court directs, in the manner set out in r 36.11(2A), entry under the Rules is not effected otherwise than by recording in the court's computerised court record system contemplated by r 36.11(2). Recording the orders means just that: setting them out. There is no recording of the orders if all that is stated is that some orders exist. It would undermine the integrity of a computerised record system to have mere references to pieces of paper in files treated as a recording of the judgment or order in the computerised record system. In my view, that is not what the rule means. To the extent that the record in the computerised system might be seen as some form of incorporation by reference, it does not record the judgment or orders. One cannot even ascertain the amount of the judgment in order 1. One can put the two together, by looking at the file, but that is not adequate. 28In Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133; 75 NSWLR 462 Basten JA (with whom Giles JA and Ipp JA agreed) noted that entry of judgment and orders now occurs in the computerised court record system. It was unnecessary in that case to deal with the question of whether this was the only method of entry (subject to any direction of the court under r 36.11(2) or (2A)). In my view, however, this must follow. If it were otherwise and the "paper" entry of an order was entry (absent any order otherwise for sub-rule (2) or direction contemplated by sub-rule (2A)), there would be entry at one date and then, if, but only if, the judgment or order were to be recorded in the court's computerised record system there would be another and later date for the entry of the order by reason of the phrase "taken to be entered". 29The UCPR was not promulgated against the background of a well-entrenched practice in all courts of settlement and entry of orders. The practice and rules for entry were quite different in the Supreme Court and the District Court under the previous Supreme Court Rules 1970 (NSW) (Pt 41) and the previous District Court Rules 1973 (NSW) (Pt 31), the latter not providing for perfection of orders by way of entry. 30The previous District Court Rules provided in Pt 31, rr 14 and 15: "14 Judicial notice of order (1) In any proceedings, the Court may take judicial notice of any order of ... the Court in the proceedings. (2) In any proceedings, the Court may be informed of an order of ... the Court in the proceedings by (amongst other things) reference to a note made: (a) by the Judge making the order ... or by his Associate or by any other proper officer, or (b) by the registrar making the order ... 15 Form of judgment or order (1) A form of judgment, and a form of order for signature by the registrar, shall when filed be sealed with the seal of the Court. (2) Except where otherwise provided by the rules or required by the Court, it shall not be necessary to file a form of judgment or order unless application is made for a certified copy thereof." 31In Palmer v Clarke (1989) 19 NSWLR 158 at 168 Kirby P, who gave the principal judgment, said: "Under Pt 31, r 15 of the District Court Rules it is not ordinarily necessary for a party to file a form of judgment or orders. It takes effect from the moment it is pronounced. Rights and obligations then attach to it. Execution may, unless stayed, be levied." 32UCPR, r 36.11 in its original form in Sch 7 to the CPA provided: "(1) Any judgment or order of the court is to be entered. (2) Unless the court orders otherwise, a judgment or order is taken to be entered: (a) in the case of a court that uses a computerised court record system, when it is recorded in that system, or (b) in any other case, when it is recorded, in accordance with the practice of the court, as having been entered." Sub-rule (2) preserved the former practice in the District Court. This was changed by the amendment to r 36.11(2) by the Uniform Civil Procedure Rules (Amendment No 23) 2008 (NSW), which brought it into its present form. The effect of the new sub-rule (2) on the District Court, which had no other system for the entry of orders, was to make entry on the computer record the only way orders could be entered. That amendment was made on 3 November 2008 and gazetted on 7 November 2008, shortly before the terms of settlement were signed. It seems that the parties and the District Court followed the earlier practice, although in view of s 133 and the new sub-rule it was inappropriate and indeed dangerous to do so. 33The UCPR are uniform rules. They exist and were made in an era of growing computerisation. The rule (r 36.11) makes ample room for flexibility for methods of entry by the initial qualification in both sub-rules (2) and (2A). If neither of those qualifications is made, entry is by recording the orders in the computerised record system of the court. Here, there has been no recording of the orders in the terms of settlement for the purposes of rr 36.11 and 36.1A. 34For these reasons the orders in the document of 25 November 2008, filed on 27 November 2008 and stamped with a seal by the Registrar on 16 December 2008 have not been entered. 35It is necessary therefore to turn to the document bearing the date of 29 April 2010. The "judgment/order" dated 29 April purports to be a sealed copy of a judgment or order entered on 16 December 2008. For the reasons I have already given no judgment or order was entered on 16 December 2008 and therefore this document is not a copy of it, because such judgment or order does not exist as entered. 36Rule 36.12(1A) says that a document sealed by a Registrar in accordance with sub-rule (1)(b) is taken to be a copy of the relevant judgment or order. This cannot be conclusive if, in all the circumstances, it has been demonstrated that there is no judgment or order that has been entered. 37Further, the document is inaccurate, insofar as it seeks to set out the terms of settlement. It reflects an interpretation of the document of November 2008 that the only judgment is in paragraph 1 and that paragraphs 2 and 3 are instalment orders (otherwise than as provided for in the CPA, s 107 and the UCPR, Pt 37). It is to be noted, however, that an instalment agreement under Pt 37, r 37.1A has no effect unless the signature of each person executing it is witnessed by a Registrar or other officer of the court or by a solicitor or barrister, unless the signatures (which was not the case here) were of a solicitor or barrister. 38Rule 36.12(1) provides that the Registrar must (a) furnish a sealed "copy" of any judgment or order that has been entered or (b) must seal a document provided by a person that in the opinion of the Registrar accurately sets out the terms of the judgment or order. It is not clear whether (a) or (b) was undertaken here. In either case, the document does not reflect the terms of settlement. Nor has any judgment or order been entered. Thus the document is not a "copy" of the orders that have been entered. If anything was purported to be entered on 16 December 2008, it was the existence of terms of settlement. If the Registrar acted under r 36.12(1)(b), the document does not accurately set out the terms of the judgment or order. The judgment or order in r 36.12(1)(b) is the same judgment or order referred to in r 36.12(1)(a), that is one "that has been entered". This has not occurred. 39In my view, the learned primary judge was wrong to conclude that anything had been entered. Her Honour was also wrong to conclude that the April 2010 document was a copy of a judgment or order that had been entered. 40Section 133 of the CPA is in the following terms: " Judgments and orders unenforceable until entered (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) any judgment, order, determination or decree of a court, and (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. (3) In subsection (2), law includes: (a) a law of the Commonwealth, and (b) a law of another State or Territory, and (c) in relation to the Supreme Court, a law of a foreign country." 41Since there has been no entry, there is no order that could be enforced: the CPA, s 133. Ms King and Futhem were attempting to enforce orders that have not been entered, and the applicant is entitled to an order preventing that. 42That does not mean, however, that Futhem is without remedy. Futhem drafted the terms of settlement. There now appears to be a significant dispute as to the meaning of the terms and the proper form of order to be entered consequent upon the terms of settlement being filed. The District Court has control of its own proceedings. No final order has been entered disposing of them. To the extent that there is a lack of clarity in the terms of settlement, that can be resolved by the District Court construing the terms of settlement. Were they proposed orders (paragraphs 1 and 4) with a side agreement (paragraphs 2 and 3)? Or were they a body of composite orders (paragraphs 1-4)? There is much to be said for assuming that the former was the case. However, this Court does not have the surrounding material to construe the orders. Nor is the application or the appeal the proper place for that process. 43Section 73 of the CPA is in the following terms: " Power of court to determine questions about compromises and settlements (1) In any proceedings, the court: (a) has and may exercise jurisdiction to determine any question in dispute between the parties to the proceedings as to whether, and on what terms, the proceedings have been compromised or settled between them, and (b) may make such orders as it considers appropriate to give effect to any such determination. (2) This section does not limit the jurisdiction that the court may otherwise have in relation to the determination of any such question." Given that the parties are in dispute about the nature of the compromise and the consequences of the settlement, it is for the District Court to resolve that dispute by reference to the background facts and the documents in question, in order to identify the appropriate orders and to provide for their entry. 44That gives rise to the question as to the proper relief in this Court. 45In the light of the above reasons, the proper order to give effect to the CPA, s 133 is to restrain the respondent seeking to enforce either the terms of settlement dated 16 December 2008 and sealed with a stamp of the District Court of New South Wales and the document dated 29 April 2010 purporting to be a copy of entered orders, until such time as orders are entered pursuant to the terms of settlement signed by the parties on 25 November 2008 and filed with the District Court of New South Wales on 27 November 2008. I would remit the matter to the District Court for resolution of the present dispute as to the effect of the compromise and as to the proper form of order to be entered pursuant thereto. 46As to costs, the applicant has been successful in the application and appeal and should have her costs of the appeal. 47The resolution of this matter is far from satisfactory. The unsatisfactory nature of the position has been brought about, in substance, by the unsatisfactory form of the terms of settlement. The document so entitled does not make clear which paragraphs are orders and which, if any, of the paragraphs are side agreements. The parties did not attend to the preparation of a minute of order. Further, the District Court did not comply with r 36.11. 48The orders of a court are official acts of the judicial branch of government. The court should ensure that its records are both accurate and made in a timely way. Parties should be familiar with the Rules. Should some flexibility from the operation of r 36.11 be required, an order of the court or a direction of the court should be made in accordance with r 36.11(2) or (2A). 49The orders I would make are:
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 August 2011
Mills
Futhem Pty Ltd