[70] Dr Derham says at para 2.80 that: ' The basis of the set-off is the general jurisdiction of the Court over the suitors in it ', citing Mitchell v Oldfield (1791) 4 Term Rep 123; 100 ER 929. There, in a case where each party had recovered judgment against the other for separate debts in separate actions, Lord Kenyon CJ stated that the case did not depend on the statutes of set-off, but the general jurisdiction of the Court over the suitors in it. '
6 I therefore ask what the justice of this case requires by way of exercise of the general jurisdiction of the court over the suitors in it, having regard to the application now before the court.
7 If the court does not intervene in the way sought by Ms Fletcher and Tatlers, they are liable to suffer, at the hands of Mr Davis, execution of the judgment in respect of the present balance of $31,370.00. That vulnerability will subsist in circumstances where Tatlers has an entitlement to payment by Mr Davis of an unquantified sum for costs in the statutory demand proceedings; and Ms Fletcher has a like entitlement to payment by Mr Davis in the bankruptcy proceedings.
8 Argument before me proceeded on the basis that the liability of Ms Fletcher and Tatlers to Mr Davis by virtue of the judgment in these proceedings is joint and several. If that is so and if the balance under that judgment is in truth $31,370.00, the situation can be seen to be one in which:
(a) Mr Davis is entitled to recover of $31,370 from Ms Fletcher.
(b) Mr Davis is entitled to recover $31,370 from Tatlers;
(c) Mr Davis cannot, however, recover $31,370 from each of Ms Fletcher and Tatlers, his right being such that the total recovered from both is limited to $31,370;
(d) Tatlers is entitled to recover a sum as yet unquantified from Mr Davis as a result of the costs order in the statutory demand proceedings; and
(e) Ms Fletcher is entitled to recover a sum as yet unquantified from Mr Davis as a result of the costs order in the bankruptcy proceedings.
9 It is, however, necessary to say more about the circumstances in which Mr Davis's right of recovery against Ms Fletcher and Tatlers arose. The terms of settlement and the orders giving effect to it (see items 2 and 3 of [2] above) expressly contemplated that Ms Fletcher and Tatlers would pay the sum of $75,000 to Mr Davis within 28 days and that the verdict and judgment in his favour for that sum would become enforceable at once if the payment was not made within that period. This regime was not one imposed by the court as a matter of compulsion against the will of the parties bound to pay. It was a regime to which those parties voluntarily and consciously submitted as part of an agreed basis of settlement.
10 Having entered into that agreement and submitted to orders of the court giving effect to it, Ms Fletcher and Tatlers then embarked on a deliberate course of unilateral conduct designed to deprive Mr Davis of the immediate enjoyment of the position into which the terms of settlement and the court's orders placed him. This was done by means of the evasive action involved in the successive application for instalment orders. It was said on behalf of Ms Fletcher and Tatlers that an application of that kind is something that the legislation and the court rules make available to any judgment debtor. That is true. But Ms Fletcher and Tatlers cannot, in the present context, be regarded as simply part of the faceless crowd of judgment debtors against whom judgments are entered in invitum. They are judgment debtors who voluntarily submitted to a particular payment regime (i.e. payment within 28 days after signing of the terms of settlement and the making of the consent orders).
11 The judgment debtors who thus voluntarily submitted to the particular payment regime now come to court asking that they be freed from the consequences of their agreement. They say that the person to whom they, jointly and severally, are bound by order of the court to pay $31,370 owes one of them one unquantified sum and the other of them another unquantified sum. That, they say, is a sufficient ground for the court to intervene to alter the consequences of the agreement they accepted, as reflected in a verdict and judgment of the court to which they consented.
12 The solicitor for Ms Fletcher and Tatlers says in an affidavit of 31 October 200t that the "total amount of the legal costs incurred by" Tatlers in respect of the statutory demand proceedings is $13,677.06, no doubt on the solicitor/client basis. He also says that the "total amount of the legal costs incurred by" Fletcher in respect of the bankruptcy proceedings is $17,504.30, presumably on the same basis. No particulars are given. A later affidavit of the solicitor (16 November 2006) has annexed to it two "bills of costs" prepared by Ms Hardman, a solicitor who operates a legal costing business. These show a total of $15,027.31 costs for the statutory demand proceedings and $18,845.28 for the bankruptcy proceedings. No one can possibly say what will be allowed, by way of costs, on assessment in one case and taxation on the other - although it can obviously be said, having regard to the indemnity principle, that the sum recoverable under the relevant costs order will not exceed the costs actually incurred. It follows that, whatever the costs consultant might say, the maximum will be $13,677.06 in the statutory demand proceedings and $17,504.30 in the bankruptcy proceedings, with experience suggesting that the actual outcome in each case is likely to be somewhat less than the sum calculated by the costs consultant.
13 But the fact that the costs in the statutory demand proceedings have not been assessed and that the costs in the bankruptcy proceedings have not been taxed means that, whether or not it is possible to estimate the amounts that might ultimately be allowed, the party with the benefit of the costs orders does not stand on the same plane as the party with the existing money judgment. Tatlers and Ms Fletcher, as beneficiaries of the respective costs orders, are not in a position to obtain execution. Neither of them could, for example, obtain a charging order over funds in court: Widgery v Tepper (1877) 6 ChD 364. To allow Ms Fletcher and Tatlers to assert their respective costs orders as a basis for denying Mr Davis the ability to obtain satisfaction of his judgment against Ms Fletcher and Tatlers would be to promote them to a position of equal ranking with him which, in the absence of an enforceable judgment for an ascertained sum, they have not in fact achieved.
14 The rationale of set-off is to avoid multiplicity of actions. Set-off operates, on principle, where there are, on each side of the account, what
Cockburn CJ in Stooke v Taylor (1880) 5 QBD 569 (at p.575) referred to as "liquidated debts, or money demands which can be readily and without difficulty ascertained". The entitlements of Ms Fletcher and Tatlers under their respective costs order cannot, as to quantum, be ascertained at this point.
15 The stay order Ms Fletcher and Tatlers seek in this case lies within the discretion of the court, having regard to what is just. In light of the fact that Mr Davis has an immediately enforceable judgment for a defined and uncontroversial amount, that that judgment was the product of an agreement which contained an express promise by Ms Fletcher and Tatlers to pay within 28 days (with the judgment stayed in the meantime), that Mr Davis is now free to proceed to immediate execution (both in terms of the agreement and by force of the judgment itself), that the liability of Mr Davis to each of Ms Fletcher and Tatlers under the particular costs order is unquantified so that neither of them is in any sense free to proceed to execution for any sum, I am of the opinion that it is not just to order the stay of execution sought by Ms Fletcher and Tatlers. Rather, Mr Davis should be free to proceed at once to execution against Ms Fletcher and Tatlers and each of them, in turn, should be free to proceed to execution against him as and when she or it has completed the steps necessary to attain a position where there is a legal right to do so.
16 The defendants' notice of motion filed on 31 October 2006 is dismissed with costs.
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