Windsor v Sydney Medical Service Co-Operative Ltd [2010] FCA 599 (11 June 2010)

Last Updated: 17 June 2010

FEDERAL COURT OF AUSTRALIA

Windsor v Sydney Medical Service Co-Operative Ltd [2010] FCA 599

Citation:		Windsor v Sydney Medical Service Co-Operative Ltd [2010] FCA 599
Appeal from:		Application for leave to appeal: Windsor v Sydney Medical Service Co-Operative Ltd (No 3) [2010] FCA 364
Parties:		GINA NICOLE WINDSOR v SYDNEY MEDICAL SERVICE CO-OPERATIVE LIMITED
File number:		NSD 460 of 2010
Judge:		BENNETT J
Date of judgment:		11 June 2010
Catchwords:		PRACTICE AND PROCEDURE – costs – applicant’s original pleadings were struck out and applicant was ordered to pay costs of the strike out motion – respondent’s costs were taxed and applicant paid the costs voluntarily – applicant later filed amended pleadings and successfully resisted motion for summary judgment – primary Judge acknowledged that he applied impermissible criteria in original strike out application and should not have struck out original pleadings – primary Judge declined to set aside the original strike out order and costs order due to no utility – primary Judge declined to set aside certificate of taxation or order the repayment of costs – application for leave to appeal interlocutory judgment – whether any error in the exercise of discretion – whether substantial injustice will be suffered
Legislation:		Federal Court Rules O 62 r 3(3)
Cases cited:		Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397 applied House v the King (1936) 66 CLR 499 cited
Date of hearing:	11 June 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	26
Counsel for the Applicant:	Mr G Blake SC, Mr B Ilkovski
Solicitor for the Applicant:	Auslegal
Counsel for the Respondent:	Mr D A C Robertson, Ms P Clingan
Solicitor for the Respondent:	Unsworth Legal Pty Ltd

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 460 of 2010

BETWEEN:	GINA NICOLE WINDSOR Applicant
AND:	SYDNEY MEDICAL SERVICE CO-OPERATIVE LIMITED Respondent

JUDGE:	BENNETT J
DATE OF ORDER:	11 JUNE 2010
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application for leave to appeal be dismissed.
2. The applicant pay the respondent’s costs of the application.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 460 of 2010

BETWEEN:	GINA NICOLE WINDSOR Applicant
AND:	SYDNEY MEDICAL SERVICE CO-OPERATIVE LIMITED Respondent

JUDGE:	BENNETT J
DATE:	11 JUNE 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Background

1. The background of this matter, in summary, is as follows. The respondent Sydney Medical Service Co-Operative Limited (SMS) filed a notice of motion in 2007 seeking orders pursuant to O 11 r 16 of the Federal Court Rules (the Rules) that the statement of claim of the applicant, Dr Windsor, be struck out (the 2007 motion). On 17 March 2008, the primary Judge ordered that the statement of claim be struck out and that Dr Windsor pay SMS’ costs of the 2007 motion (the 2008 orders). That costs order was not and has not been entered. On 11 April 2008, Dr Windsor’s solicitors forwarded a proposed amended application and statement of claim. However, no amended statement of claim was filed until December 2008. On 23 May 2008, SMS filed a bill of costs in relation to the 2008 orders and served the bill of costs, a certificate under O 62 r 40(2) of the Rules and a notice to practitioners issued under O 62 of the Rules. Subsequently, the Court issued a certificate of taxation for $22,800 (the certificate of taxation). On 13 and 14 August 2008 those costs were paid, apparently without objection, by Dr Windsor’s solicitor into the trust account of SMS’ solicitors. The amended statement of claim pursuant to O 13 r 3(1) of the Rules was subsequently filed, as I have said, on 1 December 2008.
2. A notice of motion by SMS seeking, inter alia, summary judgment pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) was unsuccessful. The primary Judge ordered that that motion be dismissed with costs (the 2009 judgment).

The 2009 motion

3. Dr Windsor then filed a motion seeking to set aside the 2008 orders (the 2009 motion). The primary Judge declined to make the orders sought in the 2009 motion. His Honour noted that Dr Windsor had not appealed his previous judgment or sought to have it set aside initially but chose instead to file an amended pleading which she was successful in defending. In those circumstances the primary Judge said that he could see no utility in setting aside the 2008 orders as now sought in the 2009 motion.
4. Dr Windsor also applied in the 2009 motion to set aside the certificate of taxation. The primary Judge accepted that SMS had no entitlement to have its bill of costs taxed by reason of O 62 r 3(3) of the Rules, which provides that ‘an order for costs of an interlocutory proceeding shall not, unless the Court otherwise orders, entitle a party to have a bill of costs taxed until the principal proceedings in which the interlocutory order was made is concluded or further order’. SMS had not proceeded with an earlier application for an order that the bill of costs be taxed forthwith but his Honour noted at [17] that the taxation was on the basis that the matter had ended – a view apparently shared by the Court and SMS’ solicitors. As noted, Dr Windsor’s solicitors paid the costs in August 2008 despite O 62 r 3(3). This was all, of course, prior to the filing of the amended statement of claim.
5. The primary Judge concluded that setting aside the certificate of taxation would not reverse or otherwise alter the legal basis for the payment of the costs, as his Honour had declined to set aside the costs order that was part of the 2008 orders. The primary Judge also concluded that the setting aside of the certificate of taxation would not provide some basis upon which Dr Windsor’s payments of SMS’ costs as taxed could be reversed pending the conclusion of the principal proceedings (at [64]). The basis for that payment of costs remained unchanged in the absence of the 2008 costs order being set aside (at [78]). That is, there was a liability on the part of Dr Windsor to pay those costs. His Honour observed that all that the certificate of taxation did was to quantify the costs to be paid and that the parties could equally have agreed an amount. Had they done so, his Honour could see no basis, absent the costs order itself being set aside, upon which SMS could be ordered to repay to Dr Windsor the monies received for the costs.
6. The primary Judge dismissed Dr Windsor’s 2009 motion with costs.

The application for leave to appeal

7. Dr Windsor seeks leave to appeal against the interlocutory judgment of the primary Judge on the 2009 motion. She accepts that she must establish that the primary Judge’s decision is attended with sufficient doubt to warrant the grant of leave and that substantial injustice would result from a refusal of leave to appeal (Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397 at 398-399). Both parties acknowledge that the primary Judge’s decision involved an exercise of discretion.
8. Dr Windsor draws attention to the primary Judge’s acknowledgment in the 2009 Judgment that he had ‘applied impermissible criteria in deciding the 2007 notice of motion’ (at [20]). His Honour had also acknowledged that, had he applied the correct test, he would have dismissed the 2007 motion. That is, he would not have struck out the statement of claim. It follows that he would not have ordered Dr Windsor to pay the costs of the 2007 motion.
9. Dr Windsor contends that the primary Judge ignored or gave insufficient weight to that concession. Clearly his Honour did not ignore it. Dr Windsor says that his Honour made no reference to it, again, in his Honour’s reasons on the 2009 motion. It is clear that the fact that the 2008 orders would not have been made if his Honour had correctly considered the 2007 motion was the very basis for the 2009 motion. His Honour turned to consider whether there was utility in setting the 2008 orders aside and, at [47]–[49], explained why, in his view, there was not. This turned, primarily, on the fact that Dr Windsor had already filed an amended pleading, which withstood a summary judgement application by SMS, so that there was no utility in reinstating the original pleading which was no longer relied on.
10. Dr Windsor now emphasises that his Honour did not separately consider the utility in setting aside the costs order alone. She says that this relief would not replicate earlier relief obtained, nor is the future prosecution of the principal proceedings relevant to the question of that order for costs. The primary Judge did not say that setting aside the costs order would replicate the relief she had secured. When his Honour observed at [48] that there would be a replication of relief, his Honour was referring to the setting aside of the order to strike out the original pleading when an amended pleading had been filed.
11. The reasoning of the primary Judge is clearly set out. His Honour explained the reasons for the exercise of the discretion not to set aside the 2008 orders. The primary Judge recited the parties’ submissions before him in detail. That recitation of the submissions put to his Honour has not been shown to be in error. SMS submits that, before the primary Judge, the question was the setting aside of the 2008 orders. SMS contends that his Honour was not asked to consider, as a separate question, whether even if he declined to set aside the order striking out the statement of claim, the order for costs should be set aside. SMS says that his Honour was not asked to re-exercise his discretion as to the costs of the 2007 motion even if there was no utility in setting aside the strike out of the statement of claim. There is no record of such a separate submission. As it has not been shown to have been put to his Honour, the primary Judge was not in error in not considering it.
12. Dr Windsor contends that the primary Judge gave weight to an extraneous consideration, namely the effect of obtaining the relief sought in the 2009 motion on the prosecution of the principal proceedings. That factor, the fact that the statement of claim was not necessary where an amended pleading had been filed, has not been shown to be an irrelevant consideration in the exercise of his Honour’s discretion. No separate consideration was given to such a consideration in the context of the costs order made in the 2008 orders for the reasons given above.
13. Dr Windsor submits that the primary Judge made an error of principle in failing to consider the consequence of a costs liability arising from a misapplication of the law and an erroneous judgment. First, I do not accept that his Honour failed to consider the consequences of the costs liability. In the circumstances of this case, where payment had been made, and in the context of the history of the matter, other considerations were also relevant. Further, while his Honour accepted that there had been a misapplication of the law, as SMS points out, it has not been established that the error was entirely that of the primary Judge or that his Honour did other than to consider the 2007 motion as it was run before him.
14. In the 2009 motion, the primary Judge was asked to set aside the 2008 orders. His Honour did consider the matters placed before him. He declined to set aside the substantive orders that the statement of claim be struck out. The costs order followed that event. His Honour concluded that, as the substantive order should not be said aside, the costs order also should not be set aside. That was the question before him. The principle now relied upon was not a matter shown to have been raised.
15. Dr Windsor also sought an order that the certificate of taxation issued in respect of the 2008 order for costs be set aside. Dr Windsor contends that his Honour made an error of principle in failing to consider the consequences of a failure of a party to comply with the rules where that party obtains an advantage and the other party a disadvantage through the payment of money.
16. The primary Judge recited all of the matters relevant to the liability for costs, including the fact that the underlying liability remained, but also the history that preceded the payment of the costs by Dr Windsor in the face of O 62 r 3(3). That included notice to Dr Windsor’s solicitors of the steps being taken by SMS to have the costs taxed and to obtain a certificate of taxation, the fact that an amended pleading, though foreshadowed, had not been filed for an extended period of time and the fact that payment was made. Dr Windsor paid SMS’ costs after the certificate of taxation was served upon her. SMS did not obtain an order pursuant to O 62 r 45(3). The payment of costs may have been based upon an understanding of the correctness of the certificate of taxation but it was, strictly, voluntary. SMS also referred to costs it had incurred in obtaining the certificate of taxation.
17. In those circumstances, his Honour considered all of the matters relevant to the exercise of his discretion. It cannot be said that the issue before the primary Judge was simply a demonstrated failure by one party to comply with the rules to its advantage.
18. Dr Windsor contends that the primary Judge acted on a wrong principle in not setting aside the certificate of taxation where O 62 r 3(3) of the Rules had not been complied with. As Dr Windsor noted, the primary Judge was fully aware of the fact that SMS did not have an entitlement to have the bill of costs taxed. In elaborating that contention, Dr Windsor submits that the decision of the taxing officer is subject to review by a Judge and that the Rule should be read as restraining a party to the principal proceeding from taxing costs prior to final resolution. Dr Windsor submits that, having found that SMS had no entitlement to have the costs taxed, his Honour should have set aside the certificate of taxation on that basis alone. This does not meet his Honour’s reasoning or affect it.
19. The next contention is that the primary Judge acted on a wrong principle in holding that Dr Windsor’s payment of SMS’ costs of the 2007 motion could be reversed only if the costs order were set aside. Dr Windsor submits that the primary Judge ‘elided’ two matters, namely the liability for costs and the obligation to pay those costs once assessed. In fact the primary Judge in his reasons did not consider a liability to pay the costs consequent upon a certificate of taxation. Rather, his Honour looked to the fact that there was an obligation to pay the costs of the 2007 motion, as his Honour had declined to set that order aside. Until that order was set aside, the liability to pay the costs remained.
20. Dr Windsor contends that the order she sought was not futile as it would have enabled her to use that money until the conclusion of the proceedings. There is no suggestion in his Honour’s reasons that evidence of such a need was before the primary Judge. His Honour noted that the money had in fact been paid. Dr Windsor’s contention does not meet or demonstrate an error in his Honour’s conclusion that he could see no basis, absent the costs order being set aside, upon which SMS could be ordered to repay to Dr Windsor the amount of the costs paid on the basis of the taxed amount.
21. Dr Windsor now contends that his Honour should have considered an implied power to order repayment of the moneys that had been paid but has not established that such a submission or issue was raised before the primary Judge. SMS contends, and Dr Windsor has not established the contrary, that it was never put to the primary Judge that there was an implied power to order restitution where the underlying liability for payment remained and there had been no payment under compulsion. There is no reference to it in the primary Judge’s recitation of Dr Windsor’s submissions. As it has not been shown to be an issue before his Honour, there is no error in failing specifically to consider it.
22. The next contention is that the decision to refuse to set aside the certificate of taxation was so unreasonable and plainly unjust in that it deprived Dr Windsor of the benefit of the use of her money in circumstances where the certificate of taxation was issued contrary to the requirements of the Rules. Dr Windsor submits that as a consequence of paying monies to which SMS had no statutory entitlement, she made a payment that SMS was not entitled to receive, as a result of which she was deprived of the benefit of the use of her money. There is no evidence to suggest that there was any particular disadvantage to Dr Windsor from the refusal of the orders, other than the fact that she did not obtain a repayment of the $22,800 paid to SMS.
23. To the extent that his Honour exercised a discretion, Dr Windsor submits that there is sufficient doubt as to the correctness of the exercise of that discretion but, apart from general assertions that the consequence of that exercise was ‘unreasonable and plainly unjust’, Dr Windsor has not demonstrated how that is so. There is no suggestion that the sum of money involved, $22,800, in any way affects Dr Windsor or her ability to continue the litigation. She points to the injustice of the underlying prejudice that was clearly a factor taken into account by the primary Judge, to be weighed with other considerations.
24. Dr Windsor has not established that the primary Judge’s decision was based upon any erroneous principle. In the exercise of his Honour’s discretion, having determined that he would not set aside the original costs order and having determined that a setting aside of the certificate of taxation would not have the consequence that the monies paid by the applicant will be repayable, it followed, logically as his Honour determined, that the setting aside of the certificate of taxation would be futile.
25. The reasoning of the primary Judge in the exercise of his Honour’s discretion is clearly set out (House v the King (1936) 66 CLR 499 at 505). His Honour explained the reasons for the exercise of his discretion not to set aside the orders of 17 March 2008. Dr Windsor has failed to show that the judgment of the primary Judge is attended with sufficient doubt to warrant the grant of leave or that a substantial injustice will result from the refusal of leave to appeal.
26. It follows that the application for leave to appeal should be refused with costs.

I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett.

Associate:

Dated: 16 June 2010