Mohareb v Palmer

Mohareb v Palmer - [2018] NSWCA 220 - NSWCA 2018 case summary — Zoe

Judgment

THE COURT: This is an application by Mr Nader Mohareb for leave to appeal from a judgment of Lonergan J dated 3 April 2018 ([2018] NSWSC 400). By that judgment, her Honour dismissed a Notice of Motion filed by Mr Mohareb seeking to have her Honour set aside orders made by Adamson J on 1 November 2017 ([2017] NSWSC 1491).
The origin of the present application is in proceedings in the District Court brought by Mr Mohareb against Mr Matthew Palmer, the present respondent. Mr Palmer was successful and obtained costs orders in his favour. His costs were assessed and three cost certificates were issued to him. They were filed in the Local Court on 5 May 2017. This resulted in a judgment of that Court in favour of Mr Palmer against Mr Mohareb in the sum of $12,905.26, which was the total of the three certificates. Mr Palmer then served a bankruptcy notice on Mr Mohareb.
Mr Mohareb disputed Mr Palmer's entitlement to enter judgment and to serve a bankruptcy notice, on the basis that Mr Mohareb had made an application for review of the costs assessments and that this prevented the enforcement of the costs certificates. In consequence, Mr Mohareb filed a Notice of Motion in the Local Court seeking orders that the judgment and bankruptcy notice be set aside and that Mr Palmer pay his costs. In the course of the hearing of the Notice of Motion before Robinson LCM, Mr Mohareb indicated that he would, in the alternative, seek a stay of the judgment pending review of the costs assessments.
Robinson LCM declined to make the orders sought in the Notice of Motion but granted a stay pending review of the costs assessments. Her Honour however rejected Mr Mohareb's application for costs of the motion on the basis that, although he had been successful in obtaining a stay, his application for that order had not been made until the hearing of the Notice of Motion and Mr Palmer had therefore not had the opportunity to consent to it in advance of the hearing.
Mr Mohareb then applied to the Supreme Court for leave to appeal against Robinson LCM's decision to decline to award him costs. He required leave because s 40 of the Local Court Act 2007 (NSW), whilst conferring a right of appeal, requires an appellant to obtain leave to appeal in the case of a challenge to "an order as to costs" (see s 40(2)(c)).
In the Supreme Court, Adamson J rejected at [21] Mr Mohareb's three complaints in relation to Robinson LCM's judgment. First, Adamson J held that Robinson LCM did not act under a misapprehension that she did not have power to make a costs order in favour of a litigant in person.
Secondly, Adamson J rejected at [21] Mr Mohareb's contention that Robinson LCM: "[F]ailed to take into account Mr Mohareb's imperative need to make the application in light of the bankruptcy notice and the alleged abuse of process in seeking to enforce a judgment when there had been an application for review of the costs determinations."
Thirdly, Adamson J rejected Mr Mohareb's contention that Robinson LCM's reasons for decision were inadequate.
A fortnight later, on 15 November 2107, District Registrar Wall of the Federal Court set aside Mr Palmer's bankruptcy notice on the basis that the judgment said to found it was subject to a statutory suspension by reason of s 86 of the Legal Profession Uniform Law Application Act 2014 (NSW) (the "LPULA" Act), which it undoubtedly was.
On the same day, that is within 14 days of Adamson J's judgment of 1 November 2017, Mr Mohareb filed a Notice of Motion in the Supreme Court seeking an order setting aside Adamson J's orders and, in substitution, granting him leave to appeal from Robinson LCM's decision. He provided "particulars" in the Notice of Motion indicating that he contended that the Federal Court's setting aside of the bankruptcy notice had the result that "none of the Manly Court orders made [by Robinson LCM] on 26 May 2017 were open to the Manly Court Magistrate to make them".
As noted earlier, Lonergan J dismissed that Notice of Motion. Her Honour did so on the basis that she had no power to set aside Adamson J's orders because her authority to do so was "excluded by operation of UCPR r 36.16(3)" (at [21]).
It is correct that r 36.16(3) was not an available source of power as that subrule does not apply to a judgment or order that determines any claim for relief, or dismisses proceedings. However r 36.16(3A), in conjunction with r 36.16(1), was applicable. Rule 36.16 is in the following terms: "36.16 Further power to set aside or vary judgment or order (cf SCR Part 40, rule 9) (1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order. (2) The court may set aside or vary a judgment or order after it has been entered if: (a) it is a default judgment (other than a default judgment given in open court), or (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, or (c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order. (3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it: (a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or (b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief. (3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered. (3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered. (3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B). (4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order."
Because Mr Mohareb filed his Notice of Motion within 14 days of the delivery of Adamson J's judgment, the Court had, by reason of subrule (3A), the same power as it would have had under subrule (1) to set aside Adamson J's judgment if the Notice of Motion seeking an order for that to occur had been filed before the entry of judgment.
If this Court granted leave to appeal, it would therefore hold that Lonergan J erred and that it was incumbent on this Court to exercise the discretion that her Honour did not appreciate that she had. If that occurred we would not however set aside Adamson J's judgment. In our opinion, there would be no basis for doing so. The decision of the Federal Court setting aside the bankruptcy notice did not affect the force of Adamson J's reasons for refusing leave to appeal. There is no reason to think that her Honour would have made a different decision if the Federal Court judgment had been delivered before her Honour made her decision.
Robinson LCM's stay order was unnecessary because, as noted above, there was an automatic stay pursuant to s 86 of the LPULA Act. It did not adversely affect Mr Mohareb's rights in any way as it simply confirmed, in his favour, what was already the case. Knowledge on the part of Robinson LCM of s 86 would however have supported her decision not to award costs to Mr Mohareb as, by her Honour's decision to grant a stay in his favour, he did not obtain anything that he did not already have. His argument that Mr Palmer should pay his costs would therefore have been considerably weakened. As a corollary, Adamson J would have been all the less likely to have granted leave to appeal from Robinson LCM's costs decision.
In these circumstances, leave to appeal to this Court from Lonergan J's decision should not be granted: if leave were granted, whilst error would be established, her decision would not be set aside.
As Mr Palmer has not appeared before this Court to seek his costs or disbursements, Mr Mohareb's Summons seeking leave to appeal should simply be dismissed with no orders as to costs or disbursements.

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