Allen v Cgi Holdings Pty Ltd (No. 3)

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DISTRICT COURT OF QUEENSLAND

CITATION: 

Allen v CGI Holdings Pty Ltd (No. 3) [2022] QDC 133

PARTIES: 

REECE JUSTIN ALLEN  
(Plaintiff)

v
CGI HOLDINGS PTY LTD ACN 156 152 359
(Defendant)

FILE NO:

1465/21

DIVISION:

Civil

PROCEEDING:

Application (ex parte)

ORIGINATING COURT: 

Brisbane District Court

DELIVERED ON:

1 June 2022

DELIVERED AT:

Brisbane (ex tempore)

HEARING DATE: 

1 June 2022

JUDGE:

Porter QC DCJ

ORDERS:
  1. The order of the Court dated 20 September 2021, staying the Enforcement Warrant - Seizure and Sale issued on 12 August 2021, in relation to the 155 Ordinary Shares in CGI Kingaroy Pty Ltd (ACN 156 607 555) and the 120 Ordinary Shares in CGI Water Pty Ltd (ACN 166 625 412) (the Enforcement Warrant), be lifted.
  2. The Court declares that:
    1. The conditions stated in Order 2 of the Orders of the Court dated 2 March 2022 have not been complied with; and
    2. The default judgment of this Court dated 27 July 2021, as amended by Order 1 of the orders made on 2 March 2022, is of full force and effect.
  3. The Enforcement Officer is directed to seize 155 Ordinary Shares in CGI Kingaroy Pty Ltd (ACN 156 607 555) owned by the defendant by the Enforcement Officer delivering a notice of seizure in the form provided in Annexure A to:
    1. BURNETT BUSINESS CENTRE, 67 Fitzroy Street, NANANGO QLD 4615;

and

    1. 5 First Avenue, KINGAROY QLD 4610.
  1. If there is no person to whom the notice can be delivered at either address, the Enforcement Officer may deliver the notice by leaving it at the address.
  2. The Court declares that upon service of a notice in accordance with Order 3, 155 Ordinary Shares in CGI Kingaroy Pty Ltd held by the defendant are taken to have been seized for the purpose of sale under the Enforcement Warrant.
  3. An Enforcement Officer is directed to seize 120 Ordinary Shares in CGI Water Pty Ltd (ACN 166 625 412) owned by the defendant by the Enforcement Officer delivering a notice of seizure in the form provided in Annexure A to:
    1. POOLE & PARTNERS PTY LTD, Level 1, 8 Innovation Parkway, BIRTINYA QLD 4575; and
    2. 56 Stirling Drive, ROCKYVIEW QLD 4701.
  4. If there is no person to whom the notice can be delivered at either address, the Enforcement Officer may deliver the notice by leaving it at the address.
  5. The Court declares that upon service of a notice in accordance with Order 6, 120 Ordinary Shares in CGI Water Pty Ltd held by the defendant are taken to have been seized for the purpose of sale under the Enforcement Warrant.
  6. The sole director of the defendant, Michael Alexander Eddie, be issued an enforcement hearing summons requiring him to attend an enforcement hearing at Brisbane at a date and time to be fixed and stated in the summons.
  7. The defendant, by its sole director, Michael Alexander Eddie, complete and return to the Plaintiff a Form 71A – Statement of Financial Position by 4:00 PM on 20 June 2022.
  8. The…
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Details
Case
[2022] QDC 133
Decision Date

CaseChat Overview and Summary

In the case of Allen v Cgi Holdings Pty Ltd (No. 3), the plaintiff, Allen, sought to enforce a default judgment against the defendant, CGI Holdings Pty Ltd, by seizing and selling certain shares. The dispute arose after CGI Holdings failed to comply with the conditions set by the court for setting aside the default judgment. Allen applied to the court for stays in relation to an enforcement warrant for seizure and sale of shares to be lifted, and the court was required to decide whether to grant the application and direct the enforcement officer on the process for seizing shares in proprietary limited companies.

The court found that CGI Holdings had substantive worth and was managed and controlled by Mr Eddie's brother. Allen submitted that the court should exercise its judicial power and aid in enforcing the judgment, which was now unconditional and final. The court agreed with Allen's submission that it had the power to ensure the efficacy and enforceability of its judgments, and that the inherent judicial powers of enforcement were unconstrained except where limited by statute. The court found that the conditions set by the court for setting aside the default judgment had not been complied with, and that the default judgment was of full force and effect.

The court lifted the order staying the enforcement warrant and directed the enforcement officer on the process for seizing shares in proprietary limited companies. The court also issued an enforcement hearing summons to the sole director of the defendant, Michael Alexander Eddie, and required him to complete and return a Statement of Financial Position to the plaintiff. The court found that the plaintiff or the enforcement officer had liberty to apply for further orders.

The court's decision was based on its power to ensure the efficacy and enforceability of its judgments, and its inherent judicial powers of enforcement. The court found that CGI Holdings had failed to comply with the conditions set by the court for setting aside the default judgment, and that the default judgment was of full force and effect. The court's orders aimed to enforce the judgment by seizing and selling the defendant's shares and obtaining financial information from the defendant.

Orders

Orders of the court

1. The order of the Court dated 20 September 2021, staying the Enforcement Warrant - Seizure and Sale issued on 12 August 2021, in relation to the 155 Ordinary Shares in CGI Kingaroy Pty Ltd (ACN 156 607 555) and the 120 Ordinary Shares in CGI Water Pty Ltd (ACN 166 625 412) (the Enforcement Warrant), be lifted.

2. The Court declares that:

1. The conditions stated in Order 2 of the Orders of the Court dated 2 March 2022 have not been complied with; and

2. The default judgment of this Court dated 27 July 2021, as amended by Order 1 of the orders made on 2 March 2022, is of full force and effect.

3. The Enforcement Officer is directed to seize 155 Ordinary Shares in CGI Kingaroy Pty Ltd (ACN 156 607 555) owned by the defendant by the Enforcement Officer delivering a notice of seizure in the form provided in Annexure A to:

1. BURNETT BUSINESS CENTRE, 67 Fitzroy Street, NANANGO QLD 4615;

and

1. 5 First Avenue, KINGAROY QLD 4610.

1. If there is no person to whom the notice can be delivered at either address, the Enforcement Officer may deliver the notice by leaving it at the address.

2. The Court declares that upon service of a notice in accordance with Order 3, 155 Ordinary Shares in CGI Kingaroy Pty Ltd held by the defendant are taken to have been seized for the purpose of sale under the Enforcement Warrant.

3. An Enforcement Officer is directed to seize 120 Ordinary Shares in CGI Water Pty Ltd (ACN 166 625 412) owned by the defendant by the Enforcement Officer delivering a notice of seizure in the form provided in Annexure A to:

1. POOLE & PARTNERS PTY LTD, Level 1, 8 Innovation Parkway, BIRTINYA QLD 4575; and

2. 56 Stirling Drive, ROCKYVIEW QLD 4701.

4. If there is no person to whom the notice can be delivered at either address, the Enforcement Officer may deliver the notice by leaving it at the address.

5. The Court declares that upon service of a notice in accordance with Order 6, 120 Ordinary Shares in CGI Water Pty Ltd held by the defendant are taken to have been seized for the purpose of sale under the Enforcement Warrant.

6. The sole director of the defendant, Michael Alexander Eddie, be issued an enforcement hearing summons requiring him to attend an enforcement hearing at Brisbane at a date and time to be fixed and stated in the summons.

7. The defendant, by its sole director, Michael Alexander Eddie, complete and return to the Plaintiff a Form 71A – Statement of Financial Position by 4:00 PM on 20 June 2022.

8. The Plaintiff or the Enforcement Officer have liberty to apply.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

There was evidence before me in the March 2022 hearing that at least CGI Kingaroy has substantive worth and is managed and controlled by Mr Eddie’s brother. Mr Allen did some helpful research on the question of how to seize shares in a proprietary limited company. The gravamen of his submission was:[2] The Plaintiff submits the court should exercise judicial power and aid the Plaintiff in the enforcement of the judgment, a judgment which is now unconditional and final.The very essence of judicial power is that decisions of a court are binding and authoritative, which means that decisions must be enforceable either by execution or contempt. As such, “judicial power includes with the decision and the pronouncement of judgment the power to carry that judgment into effect between the contending parties”: Australian Pipeline Limited v Alinta Limited [2007] FCAFC 55 (20 April 2007) (Full Federal Court)[3]. In that case Justice Finkelstein stated:82. Going back to Griffith CJ’s formulation [in Huddart Parker & Co Pty Ltd v Moorehead [1909] HCA 36; (1908) 8 CLR 330, 357 ], an important attribute of a judicial decision is that it must be "binding and authoritative". This raises several considerations. First, decisions that are subject to general judicial review are usually not binding in the sense that judicial determinations are: Precision Data Holdings (1991) 173 CLR at 191; The Attorney-General for the Commonwealth v Breckler [1999] HCA 28; (1998) 197 CLR 83, 108.8.3 Secondly, to be "binding and authoritative", a decision must be enforceable. The doctrine of enforcement is of ancient pedigree. It is the formal process by which a party entitled to the benefit of a judgment may obtain that benefit. It is the "practical forcing power of the law" which carries the judgment into effect: Freeman on Executions, 2nd ed, 1888, 2. In Re A Company [1915] 1 Ch 520, 527 Phillimore LJ explained that "it is the old common law process by which the sheriff in obedience to one of the common law writs procures for a judgment creditor the fruits of his judgment."By these submissions the Plaintiff seeks the assistance of the court, in the exercise of its judicial power, to put the judgment of the court (money order[4]) in this proceeding into effect by the enforcement by the enforcement officers of the Enforcement Warrants. The Plaintiff submits the inherent judicial powers of enforcement, including those exercised by an enforcement officer for a court, are unconstrained, except where any powers are limited by statute[5]. Simply, the court should not create a right in the Plaintiff (a judgment) without a remedy to put the judgment into effect (enforcement).[2] Plaintiff’s outline of argument at [21] to [23][3] Per Finkelstein J (dissenting with Gyles and Lander JJ) at [83] – [86], in particular at [85][4] Civil Proceedings Act 2011 s 83[5] Civil Proceedings Act 2011 s 101 I agree with his submission that this Court has power (incidental to its power to hear and determine matters) to ensure the efficacy and enforceability of those judgments. That is the underlying basis for the Court’s power to make Anton Piller orders and asset preservation orders.

Ratio Decidendi

Legal Principle Established

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