Clarke v Mako'ochieng
[2017] VCC 136
•30 March 2017
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-14-00641
| Camille Clarke | Plaintiff |
| v | |
| Bernard Mako'ochieng | Defendant |
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JUDGE: | Lewitan | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 27 February 2017 | |
DATE OF JUDGMENT: | 30 March 2017 | |
CASE MAY BE CITED AS: | Clarke v Mako'ochieng | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 136 | |
REASONS FOR JUDGMENT
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Subject:Review of refusal to make an order that the judgment debtor pay the judgment debt by instalments
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APPEARANCES: | Counsel | Solicitors |
| For the Judgment Debtor | Mr Mako’ochieng appeared in person | |
| For the Judgment Creditor | Mr Morrow (solicitor) | John Morrow |
HER HONOUR:
1 On 27 October 2016 judgment was entered against Bernard Mako’ochieng (the judgment debtor) in the sum of $10,000 in favour of Camille Clarke (the judgment creditor).
2 On 16 November 2016 the judgment debtor made an application for an order for payment of the judgment debt by instalments:
$550 payable monthly.
Date of first instalment - 21 November 2016.
Last instalment - 21 April 2018.
Total number of instalments -18.
3 On 7 December 2016 the Deputy Registrar refused the judgment debtor’s application.
4 On 23 December 2016 the judgment debtor filed a Notice of Objection dated 14 December 2016 to the order of the Deputy Registrar.
5 This is a hearing de novo.
6 On 23 February 2017 the judgment debtor made a payment to the judgment creditor of $550 which has reduced the amount of the judgment debt.
7 In his application the judgment debtor describes himself as self-employed and states that his gross wage is $3167 and that his average pre-tax earnings for the last 12 months was $38,000. He stated that he held a deposit with the Commonwealth Bank of $500 and that Elmar Jewelry owed him $9000. He said that he had a $20,000 interest in a partnership or business and that the market value of his furniture, household and personal goods was $25,000. He said that his weekly expenses were $633.42.
8 When asked to give particulars of “any other circumstances which affect the financial situation of the Judgment Debtor”, the judgment debtor stated “ongoing legal costs for another proceeding involving Mr Morrow solicitor”.
9 In support of his application the judgment debtor made an affidavit on 27 February 2017 (the judgment debtor’s affidavit). The judgment debtor submitted that based on his income, he has the financial capacity to meet the proposed payment instalments.
10 In his affidavit the judgment debtor referred to the gemstones business which he operates in the name of Solomon & Sheba Gemstones. The business is a start-up business which is currently supported by the Commonwealth Government of Australia under the New Enterprise Incentive Scheme (NEIS). The schedule to the NEIS participation agreement indicates that the judgment debtor receives a fortnightly allowance of $527.60 and a fortnightly rental allowance of $86.93 from the Commonwealth in the period from 14 July 2016 to 30 March 2017. These payments are reflected in the judgment debtor’s complete access account with the Commonwealth Bank. The judgment debtor referred to exhibit K to the judgment debtor’s affidavit which shows the financial plans of the gemstones business for two years. The judgment debtor submitted that he is meeting the business targets. The judgment debtor submitted from the bar table that he has stock in the form of saphires and emeralds estimated between $60,000 to $70,000.
11 The judgment debtor referred to cash deposits of $3000 on 9 February 2017 and $4909.86 on 21 February 2017 made to his Business Transaction Account with the Commonwealth Bank. He also referred to a business deposit of $25,000 which was not reflected in his Foreign Currency Account because some of the money was withdrawn and the balance transferred to other accounts.
12 The judgment debtor also stated that he used to operate a bar business for eight years and has assets such as fridges and other bar items stored in a warehouse which he has not sold. The judgment debtor estimated the value of those assets to be more than $100,000. He said that he could always liquidate those assets but has chosen not to do so. On the other hand the judgment debtor said that the equipment is owned by his business and not him.
13 The judgment debtor has also commenced a second business supplying booking services for international artists touring Australia. The judgment debtor is currently organising a tour by overseas artists and submitted that this business will earn $2500 per show and a percentage of the net profit after the tour is finished.
14 Mr Morrow, the solicitor for the judgment creditor, submitted that the judgment debtor has money available to pay the debt of $10,000 and simply does not want to.
15 In an affidavit in opposition to the judgment debtor’s application, Mr Morrow referred to the judgment debtor’s existing liabilities which include unpaid judgment debts in excess of $211,000 as follows:
a. Judgment debt of 6 November 2013 for $385 being an order of the Magistrates Court of Victoria in Kirk v Mako’ochieng and Ors Case No. D11624070 (the Kirk debt proceedings)
b. Judgment debt of 21 November 2013 for $1,011 being an order of the Magistrates Court in the Kirk debt proceedings.
c. Judgment debt of 24 June 2014 for $1402 being an order of the Magistrates Court of Victoria in the Kirk debt proceedings.
d. Judgment debt of 14 May 2014 for $26,412.84 (the appeal costs judgment) being an order of the Supreme Court of Victoria in Mako’ochieng and Ors v Kirk Case No.SCI2013 06013, being an appeal on a matter of law against entry of judgment in the Kirk debt proceedings (the first Kirk appeal).
e. Judgment debt of 17 June 2016 for $182,307.14 being an order of the Magistrates Court of Victoria in the Kirk debt proceedings (the final Kirk judgment).
16 Mr Morrow submitted that although the judgment debtor is earning more money than the amounts stated in his statement of financial situation dated 3 November 2016, the judgment debtor is not able to satisfy the $211,000 he owes in judgment debts. Mr Morrow submitted that in order for the Court to permit a debtor to pay the debt by instalments, the Court must be satisfied that in all the circumstances he would have sufficient assets to pay off his debt by instalments which he could not do if he has a pre-existing debt of over $211,000.
17 Mr Morrow submitted that the judgment debtor’s significant liabilities would constrain his ability to meet the proposed instalment payment terms. The judgment debtor submitted that Mr Morrow’s objection is without foundation given that the judgment debtor had successfully paid the settlement sum in full to the judgment creditor pursuant to the settlement agreement dated 14 October 2015.
18 The judgment debtor submitted that his current liabilities are not a threat to his capability to meet the proposed payment instalments.
19 The judgment debtor referred to a judgment debt with Mrs Kirk obtained against him in the Magistrates Court on 16 June 2016 in the sum of $10,672.38 and costs of $166,343.05. He stated that he has appealed against that judgment on the basis that the judgment was obtained by fraud. The appeal is listed for hearing on 20 June 2017. The judgment debtor submitted that the judgment obtained by Mrs Kirk against him on 16 June 2016 and the liabilities claimed by Mr Morrow in Mr Morrow’s affidavit dated 20 February 2017 will not affect his ability to meet the instalment payments proposed in the application for judgment debt relief.
20 I do not accept the judgment debtor’s submissions.
21 In an affidavit made by Mr Morrow on 20 February 2017 (Morrow’s affidavit), Mr Morrow stated that he acts for Susan Elizabeth Kirk in the Kirk debt proceedings. He submitted that the appeal costs judgment of $26,412.84 in the first Kirk appeal relates to the respondent’s (Kirk’s) costs of the first Kirk appeal as taxed by the Costs Court in May 2014. The first Kirk appeal was an appeal on a matter of law. The second Kirk appeal is being conducted on a greater scale than the first Kirk appeal with the need for the judgment debtor’s lawyers to examine and rely upon 2500 pages of transcript covering 28 hearing days. In the second Kirk appeal the costs of the judgment debtor (the appellant) will be much greater than the respondent’s costs in the first Kirk appeal and are likely to be in the order of $70,000.
22 As stated by Barrett AJA in In the matter of Australian Institute of Fitness (VIC & TAS)[1] :
While an instalment order obviously mitigates the severity of the situation in which the judgment debtor is placed, that is not the real issue. The principal concern, as I say, is to discover whether an instalment arrangement will be more conducive to the judgment creditor’s achieving payment in full in a reasonable time. The issue is thus not one of indulgence to the judgment debtor because the judgment debtor somehow deserves an indulgence. The issue is whether indulgence to the judgment debtor will enhance the prospects of full recovery by the judgment creditor.
[1] [2016] NSWSC 1143, [11].
23 Mr Morrow submitted that the judgment debtor currently has ownership of assets and businesses and is financially capable of paying off the judgment debt without the necessity of a judgment debt relief from the Court.
24 In Hellier Capital Pty Ltd v Albarran[2] McDougall J held that “an instalment order ought not be made if the judgment debtor’s means are sufficient to enable him or her to pay the judgment debt immediately and in full.”
[2] [2009] NSWSC 403, [8].
25 In Davidson v Greedy & Anor[3] Mukhtar AsJ stated:
The Act does not contemplate “see-how-we-go” interim orders. The Act is concerned with judgment debt recovery.
[3] [2012] VSC 202, [16].
26 In G and L Tierney Pty Ltd v Endos Pty Ltd (In Liq), Alexander William Moorby and Margaret Moorby[4] Southwell J refused to make an instalment order because he regarded “the proposal as one which is quite unrealistic, and based more on pious hope than reasonable expectation.”
[4] Unreported (1991, Supreme Court) BC9100606.
27 Having considered the evidence and the submissions made by the judgment debtor and counsel, I am not satisfied that the judgment debtor has demonstrated that he will have the means to comply with the instalment proposal. The judgment debtor’s existing liabilities which include unpaid judgment debts are in excess of $211,000.
28 It is for those reasons that I refuse the judgment debtor’s application for payment of the judgment debt by instalments. I order that the application by the judgment debtor is refused.
Costs
29 The judgment debtor referred to an updated itemised bill of costs which Mr Morrow prepared in relation to this application. The judgment debtor submitted that the total amount of the bill of costs is $10,768.20 when the amount in dispute is less than $10,000. The judgment debtor submitted that in presenting these costs, Mr Morrow had breached his overarching obligation under s24 of the Civil Procedure Act 2010 (the Act) to use reasonable endeavours to ensure that the costs incurred in the proceeding were reasonable and proportionate to the complexity and importance of the issues and the sums in dispute.
30 Section 24 of the Act provides:
24 Overarching obligation to ensure costs are reasonable and proportionate
A person to whom the overarching obligations apply must use reasonable endeavours to ensure that legal costs and other cost incurred in connection with the civil proceeding are reasonable and proportionate to –
(a) the complexity or importance of the issues in dispute; and
(b) the amount in dispute.
31 In this case the judgment debtor filed a Notice of Objection to the order of the Deputy Registrar’s refusal of the judgment debtor’s application for payment of the judgment debt by instalments. On 20 February 2017 Mr Morrow made an affidavit in response to the Notice of Objection filed by the judgment debtor. The judgment debtor filed an affidavit made 27 February 2017 (the judgment debtor’s affidavit) in support of his application. The affidavit consisted of 15 pages and contained 14 exhibits which ran for 143 pages.
32 It was necessary for Mr Morrow to consider and address the allegations made in the judgment debtor’s affidavit. It was necessary for Mr Morrow to have regard to the material contained in the exhibits.
33 The judgment debtor referred to Yara Australia Pty Ltd v Oswal (Oswal) [5]. In that case the applicants sought leave to appeal from the order of Whelan J setting aside the orders made by Efthim AsJ that the respondents provide security for costs. The application for leave to appeal was heard in one day, there being five senior counsel, six junior counsel and five firms of solicitors representing the parties. The material in the application exceeded 2700 pages. The Court of Appeal held that the overarching obligation under s24 to ensure that costs were reasonable and proportionate had been breached by the filing of excessive material. The facts in Oswal are different from the facts in this case. In this case the only material filed by the judgment creditor was an affidavit made by Mr Morrow containing 18 paragraphs and 4 exhibits. The judgment creditor did not file excessive material.
[5] [2013] VSCA 337.
34 Having regard to the issues in this and the materials which were filed, I am satisfied that the overarching obligation under s24 to ensure that costs were reasonable and proportionate has not been breached.
35 I order that the judgment debtor pay the costs of the judgment creditor to be taxed in default of agreement on a standard basis.
Certificate
I certify that the preceding 8 pages are a true copy of the revised reasons for decision of Her Honour Judge Lewitan delivered on 30 March 2017.
Dated: 28 April 2017
…………………….
Nicola Ojerholm
Associate to Her Honour Judge Lewitan
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