Commonwealth Bank of Australia v Saggese
[2018] VSC 40
•12 February 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2016 02402
| COMMONWEALTH BANK OF AUSTRALIA | Plaintiff |
| v | |
| RAYMOND SAGGESE (BY HIS LITIGATION GUARDIAN MS MORENA SAGGESE) | Defendant |
---
JUDGE: | DERHAM AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 November 2017 |
DATE OF JUDGMENT: | 12 February 2018 |
CASE MAY BE CITED AS: | Commonwealth Bank of Australia v Saggese |
MEDIUM NEUTRAL CITATION: | [2018] VSC 40 First Revision: 22 February 2018 |
---
PRACTICE AND PROCEDURE – Warrants of execution – Appeal from refusal of a Judicial Registrar to grant leave to issue warrant of execution to enforce judgment – Where six years had elapsed since judgment took effect – Where change had taken place, by assignment, in the identity of the person entitled to execution under the judgment – Whether legal assignment required by the rules or equitable assignment sufficient – Appeal requiring hearing of application de novo – Evidence showing reasons for delay not satisfactory – discretion to grant or refuse leave – Discretion exercised to refuse leave – Supreme Court (General Civil Procedure) Rules 2015, r 68.02; Hammon v Kampfhenteel [1895] 21 VLR 202; In the estate of Carter; Re Ascot Timber Co Pty Ltd v Carter [1928] VLR 290; Solic v Bertossa [1969] VR 594; Dennehy v Reasonable Endeavours Pty Ltd [2001] VSC 447; World Square Pty Ltd v Taylor [1990] 1 Qd R 583; WT Lamb & Sons [1948] 2 KB 331.
ASSIGNMENT OF CHOSES IN ACTION – Assignment of judgments – Requirements for valid legal assignment of a judgment for debt – Assignment in equity – Notice of assignment to the debtor not essential to the validity of equitable assignment of a presently existing legal chose in action – In equity and at law a judgment may be the subject of an assignment – Assignment of a legal chose in action, for value, which fails to satisfy the requirements for an assignment at law is effectual as an equitable assignment – Property Law Act 1958 (Vic), s 134; William Brandt’s Sons & Co v Dunlop Rubber Co Ltd [1905] 2 AC 454; Gould v Skinner [1983] 1 Qd R 377; Thomas v National Australia Bank Ltd [2000] 2 Qd R 448; Alma Hill Constructions Pty Ltd v Onal (2007) 16 VR 190.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff/Appellant | Mr G O’Hara | Gadens |
| The Defendant/Respondent appeared by his litigation guardian Ms Morena Saggese |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 1
Summary of conclusions................................................................................................................... 2
The decision below............................................................................................................................ 3
Litigation guardian appointment.................................................................................................... 7
Applicable Law................................................................................................................................... 8
Reasons for delay........................................................................................................................ 11
Assignment.................................................................................................................................. 12
Entitlement of applicant and liability of judgment debtor.................................................. 15
Self-Represented Litigant............................................................................................................... 17
Defendant’s personal circumstances............................................................................................ 18
Submissions and consideration.................................................................................................... 20
Assignment.................................................................................................................................. 21
The chain of the assignment...................................................................................................... 24
Identity of the plaintiff............................................................................................................... 26
Notice of assignment.................................................................................................................. 27
Reasons for the delay................................................................................................................. 30
Prejudice....................................................................................................................................... 37
Conclusion......................................................................................................................................... 38
HIS HONOUR:
Introduction
Credit Corp Services Pty Ltd (‘Credit Corp’), as assignee of a debt from the plaintiff (‘CBA’), appeals from a decision of a judicial registrar made on 6 December 2016. The Judicial Registrar refused Credit Corp leave, pursuant to r 68.02 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’), to issue a warrant to enforce a judgment of the Magistrates’ Court of Victoria given in favour of CBA on 13 November 2009 against the defendant/respondent (‘defendant’ or ‘Raymond’).
The judgment in the Magistrates’ Court entered on 13 November 2009 was for the sum of $34,523.16, inclusive of interest and costs (‘the judgment’). The judgment was registered in this Court pursuant to s 112 of the Magistrates’ Court Act 1989 (Vic) (‘MCA’) by filing a certificate under that section on 22 June 2016. On the next day Credit Corp issued a summons directed to the defendant applying to this Court for leave pursuant to r 68.02(1)(a) of the Rules to enforce the judgment, which was said to have been assigned to it on 18 December 2009. The application was supported by the affidavit of Adam Carpenter sworn 15 June 2016. Service was by mail upon the defendant at 16 Crispe Street, Reservoir, Victoria. On 21 July 2016 an appearance was entered for the defendant by solicitors who have since ceased to act. After some adjournments the matter came on for hearing before the Judicial Registrar on 6 December 2016. The Judicial Registrar gave ex tempore reasons included in the order made that day.
Under the Rules an appeal from any determination made by the Court constituted by a judicial registrar lies to the Trial Division constituted by a judge of the Court, subject to some qualifications not presently relevant.[1] Such an appeal is conducted by way of a hearing de novo, involving a complete rehearing of the application. In this case, the notice of appeal is against the whole of the determination of the Judicial Registrar and was filed on 19 December 2016, within the 14 day period allowed by the Rules.[2] Notwithstanding that by the Rules the appeal is to a judge of the Trial Division, pursuant to r 77.05 of the Rules, Justice J Forrest referred the matter for hearing and determination to an Associate Justice.[3] By r 84.10 of the Rules, each party to the appeal may rely upon the affidavits used before the Judicial Registrar and, with the leave of the Court, on affidavits not used before the Judicial Registrar.[4]
[1]Rules 84.05(1) and (3).
[2]See r 84.06(1)(a).
[3]Order made 16 August 2017.
[4]The rule also refers to oral evidence in each case but there was no oral evidence given either before the Registrar or before me.
In the appeal, both parties sought to rely on affidavits not used before the Registrar. Neither party objected to the other relying on the affidavits that were not before the Judicial Registrar. The further affidavits filed on behalf of the defendant were of little real utility in the resolution of the disputes. The further affidavits filed on behalf of Credit Corp sought to deal, both by way of evidence and, in effect, by submission, with the reasons given by the Judicial Registrar for refusing leave. As some of the matters dealt with in those affidavits go to matters of substance relevant to the assignment of the judgment, it is in my view in the interests of the administration of justice generally, and in this particular case it is in accordance with the overarching purpose in the Civil Procedure Act 2010 (Vic) (‘CPA’), to allow Credit Corp to rely upon the further affidavits. They relate to events long past and overcome some doubts that led, in part, the Judicial Registrar to refuse the leave sought.
Summary of conclusions
For the reasons that follow, the appeal by Credit Corp will be dismissed and the application for leave to issue execution will be refused. Essentially, the refusal of leave to Credit Corp under r 68.02 of the Rules, which is an the exercise of the Court’s discretion, is because Credit Corp’s reasons for the delay since the judgment was entered in 2009 do not support the grant of leave.
Notwithstanding that conclusion, however, many of the issues concerning the nature and validity of the assignment have been resolved in Credit Corp’s favour, in part because of the leave granted to rely on affidavits not relied on before the Judicial Registrar.
The decision below
At the time of the determination by the Judicial Registrar the material before the Court was as follows:
(a) affidavit of Adam Carpenter affirmed 15 June 2016 (‘Carpenter’s first affidavit’);
(b) affidavit of Raymond Michael Saggese sworn 25 August 2016 (‘Raymond’s first affidavit’);
(c) affidavit of Morena Saggese sworn 25 August 2016 (‘Morena’s first affidavit’);
(d) affidavit of Adam Carpenter affirmed 24 November 2016 (‘Carpenter’s second affidavit’);
(e) affidavit of Adam Carpenter affirmed 30 November 2016 (‘Carpenter’s third affidavit’); and
(f) affidavit of Raymond Michael Saggese sworn 2 December 2016 (‘Raymond’s second affidavit’).
Subsequent to the determination of the Judicial Registrar the following further affidavits purport to have been filed:
(a) affidavit of Adam Carpenter affirmed 5 April 2017 (‘Carpenter’s fourth affidavit’);
(b) affidavit of Morena Saggese sworn 29 September 2017 (‘Morena’s second affidavit’); and
(c) affidavit of Adam Carpenter affirmed 12 October 2017 (‘Carpenter’s fifth affidavit’);
(d) Affidavit of Morena Saggese sworn 31 October 2017 (‘Morena’s third affidavit’)
Each of Carpenter’s affidavits was made on information and belief. He is, or was at the time he affirmed each affidavit, the head of Operational Services of Credit Corp. In relation to the evidence he gives in several of his affidavits of the efforts made to enforce the judgment debt, he relies on Credit Corp’s Account Summary Notes. These notes appear to be business records within the meaning of s 69(1) and (2) of the Evidence Act 2008 (Vic) and to be admissible in this application. Moreover, the application is undoubtedly interlocutory[5] so that hearsay evidence is admissible under s 75 of the Evidence Act providing the source of the evidence is also adduced, as in the case of the Account Summary Notes, it is.
[5]See WT Lamb & Sons v Rider [1948] 2 KB 331, 337 (‘WT Lamb & Sons’).
The reasons of the Judicial Registrar were stated succinctly. After introductory matters (including the fact that the matter was initially adjourned because the defendant had filed an application in the Magistrates’ Court to set aside the judgment – which was unsuccessful - and to enable the plaintiff and Credit Corp to address certain matters by way of any supplementary affidavit) the reasons proceeded as follows:
Allegations in Defendant’s affidavit material
8.Much of the Defendant’s affidavit material goes to matters concerning his apparent lack of knowledge about the debt the subject of the Judgment and the circumstances in which that Judgment arose. In addition, the Defendant’s affidavits paint a picture of alleged financial exploitation and “identify theft” by his estranged sister. He also deposes to having made a report of fraud to the Victoria Police. Much of this evidence was not ultimately relied on at the final hearing of the application.
9.In contrast to the position in the Court of Bankruptcy, this Court is not satisfied that it has the power or discretion to go behind the judgment of the Magistrates’ Court on the basis of fraud, miscarriage of justice or on any other recognised ground in order to assess whether in “truth and reality” there is a debt owing (cf: Corney v Brien (1951) 84 CLR 343 at 347-348 and, more recently, Compton v Ramsay Health Care Australia Pty Ltd [2016] FCAFC 106 at [67] – [70] and [78]). Further, it has been held that the only function of the Court on an application for leave is to ensure that the party who is applying is entitled as a matter of legal right to seek execution: Solic v Bertossa [1969] VR 594 at 595. A critical question here is whether Credit Corp has discharged the onus of establishing that legal right. That matter is addressed further below.
10.In addition, the Defendant has been afforded the opportunity to ventilate his arguments in relation to the Judgment on his application for rehearing. That application was refused by the Magistrates’ Court on 22 November 2016. The Judgment is therefore unaffected and remains unpaid.
Sufficient proof of assignment
11.Pursuant to rule 68.02(1)(b) of the Rules, an assignee of a judgment debt must obtain leave to issue execution. Further, rule 68.02(4) requires that evidence be filed in support of the change in identity of the party entitled to execution of the judgment.
12.Mr Carpenter is in the employ of Credit Corp as the Head of Operational Services. He deposes in his affidavit of 24 November 2016 that on 18 December 2009, the Plaintiff “assigned the beneficial rights, title and interest” (emphasis added) in the Judgment to Credit Corp. This is said to have been effected pursuant to the operation of the terms of an earlier Master Debt Sale Agreement executed on 26 February 2009 (as varied) which entailed the assignment of tranches of debts between those parties over a period of time (including the Judgment). A document styled “Notice of Assignment” dated 22 December 2009 and addressed to the Defendant also refers to the assignment being a beneficial assignment of rights in a debt owed to the Plaintiff. However, clause 2.1 of the Master Debt Sale Agreement suggests that the Plaintiff assigned “all its legal and beneficial rights, title and interests” (emphasis added) in each tranche of debts. In other words, the principal instrument of assignment suggests a legal assignment and not simply a beneficial assignment.
13.Given this confusion as to the precise nature of the assignment, there is some doubt as to the correct identity of the plaintiff. For example, a complete legal assignment of the Judgment would likely entail that Credit Corp be identified as the proper plaintiff. An equitable assignee of a chose in action, such as a judgment debt, may also be entitled to enforce it by action and execution (see Francis v Eggleston Mitchell Lawyers Pty Ltd [2014] FCAFC 18 at [21] – [22]) but again, it is unclear whether Credit Corp is the legal or equitable assignee in this case.
14.The ambiguity about the proper plaintiff is reflected in the Summons which was issued in the name of the Plaintiff but seeks leave for the benefit of Credit Corp. That ambiguity was not resolved as a consequence of Credit Corp’s supplementary affidavit material. Nor was there any application to amend the name of, or substitute, the Plaintiff.
15.The Judgment is not referred to in the Master Debt Sale Agreement but is said to be contained in a later tranche of debts. An email dated 18 December 2009 is said to identify the Judgment as being one of the debts assigned between the Plaintiff and Credit Corp. However, the email does not, on its face, refer to the earlier Master Debt Sale Agreement. While the Defendant’s name can be deciphered in an annexure to the email, the annexure does not apparently refer to the Judgment or the amount of the debt the subject of the assignment.
16.Counsel for the Defendant submits that there is also difficulty with respect to the Notice of Assignment dated 22 December 2009. It is said that the Notice of Assignment refers to a debt owing to the Plaintiff by reference to an account number but ought instead refer to the Judgment itself. It may have been desirable for the Notice to have referred to the Judgment and for the Judgment to have been annexed to the Notice but the Court does not consider that omission to be fatal. However, the evidence does not adequately establish the manner and circumstances in which the Notice of Assignment was apparently sent to the Defendant. For example, there is no evidence of the mailing practices of Credit Corp, or a mail record relied on to demonstrate if and when the Notice of Assignment was sent. Finally, in his affidavit of 25 August 2016, the Defendant positively deposes to only becoming aware of the matter on 2 July 2016 and denies having received any earlier documentation in relation to the debt the subject of the Judgment.
17.On balance, the Court is not satisfied that the affidavit material sufficiently demonstrates: (a) the nature of the assignment which is said to have taken place between the Plaintiff and Credit Corp; (b) the correct identity of the plaintiff depending on the nature of the assignment; (c) the documentary chain of that assignment; and (d) the provision of a notice of assignment to the Defendant.
Delay in enforcement of judgment
18.An application for leave under rule 68.02(1)(a) requires a plaintiff to sufficiently explain its delay in seeking to enforce a judgment: Dennehy v Reasonable Endeavours Pty Ltd [2001] VSC 447 (“Dennehy”) at [11]. For example, an explanation might support a grant of leave where there is an initial inability to enforce a judgement (through no fault of the plaintiff) and a subsequent prompt attempt to recover the judgment: Dennehy at [11].
19.Since the judgment was obtained, numerous legal notices and correspondence are said to have been sent to both an address at which the Defendant resides (13 Edgar Street, Reservoir, Victoria) and to a property which the Defendant owns (16 Crispe Street Reservoir, Victoria). The Defendant deposes to not having received these documents. Further, throughout April and May 2015, Credit Corp organised for field agents to attend at each of these addresses with the intention of making contact with the Defendant. However, the Court considers that, unlike in Dennehy, Credit Corp has not adequately demonstrated an initial inability to enforce the Judgment or a prompt attempt to recover the Judgment.
20.A certificate for the Supreme Court issued on 18 May 2016 pursuant to s 112 of the Magistrates’ Court Act 1989 (Vic) records the Judgment being made and remaining unpaid. It also notes that “a warrant to seize property to satisfy the order was returned unsatisfied.” However, the affidavit material provides no further detail in relation to this warrant, such as the date of its issue and when it was returned unsatisfied.
21.In his supplementary affidavit of 24 November 2016, Mr Carpenter suggests that “in or about 2010” Credit Corp conducted a search which revealed the Defendant to be the owner of the property at the 16 Crispe Street Reservoir address. It is unclear why Credit Corp or the Plaintiff did not seek to execute the Judgment on this property from this time.
22.The Court notes that there is some evidence that Credit Corp was apparently informed by relatives of the Defendant in or about September 2012 that there were concerns about his “health and wellbeing…and ability to manage his affairs”. This may explain its reluctance to proceed against the Defendant between September 2012 until at least August 2014 when it was apparently made aware of the Defendant’s “whereabouts, capacity and affairs” and “decided to resume further legal enforcement”. However, none of this adequately explains the absence of clear attempts to enforce the Judgment from late 2014 to date.
23.Whilst the Court is not of the view that the Plaintiff or Credit Corp as assignee have clearly abandoned their rights since the Judgment was obtained, the various attempts to recover the debt the subject of the Judgment appear to have been somewhat sporadic and haphazard at times. Overall, the Court is not satisfied that the explanation given provides adequate justification for the delay in proceeding to execution.
Prejudice
24.Demonstrated prejudice may be a factor for the Court to consider in the exercise of its discretion to grant or refuse leave: World Square Pty Ltd v Taylor [1990] 1 Qd R 583 at 588.
25.There is some evidence before the Court that the Defendant will suffer financial hardship should leave be given and the Judgment enforced. Further, it is also observed that the delay in enforcement has contributed to accrual of a significant amount of statutory interest since Judgment was entered, further contributing to this potential hardship. Whilst by no means determinative, the Court considers this form of prejudice to be another factor which tends against the granting of leave.
For these reasons the Judicial Registrar exercised his discretion to refuse leave to Credit Corp to issue a warrant of execution to enforce the judgment. The defendant’s costs were ordered to be paid by Credit Corp.
Litigation guardian appointment
The appeal was initially fixed for hearing on 10 May 2017. Shortly before the date fixed for the hearing of the appeal the defendant’s solicitors applied for leave to cease acting for the defendant. I required the application to be served on the defendant and on Credit Corp because of the risk that it would be necessary to vacate the appeal date and fix a new day for hearing. The defendant’s solicitor’s application came on for hearing on 5 May 2017. The defendant did not attend the hearing on that day. His sister, Ms Morena Saggese (‘Morena’), applied to appear on his behalf and leave was granted. It appeared from the affidavit material filed by the defendant, the history of the proceeding, in particular the assistance given to the defendant by Morena in this proceeding, and a report of a clinical psychologist Dr Phillip Greenway (handed to the Court by Morena) that the defendant may be incapable, by reason of mental infirmity, of managing his affairs in relation to this proceeding.
The proceeding was adjourned to 9 May 2017 for the purpose of the Court considering whether to appoint a litigation guardian. The defendant was required to attend in person so that the Court was able to assess: whether he should have a litigation guardian appointed; whether he understood the role of a litigation guardian; whether his sister was an appropriate person to be his litigation guardian; and whether he agreed to the appointment. Orders were made giving leave to the defendant’s solicitors to cease acting. On the adjourned date, upon hearing the defendant in person, considering the medical evidence, and obtaining Morena’s written consent, I appointed her as the defendant’s litigation guardian.[6] I noted at the same time that the appeal would be delayed because of an application by the defendant to the Credit and Investment Ombudsman. After further delays the appeal came on for hearing on 13 November 2017.
[6]The order involved and implied dispensation, pursuant to r 2.04 of the Rules, with the requirement of r 15.02(3) of the Rules that the litigation guardian act by solicitor. This will be regularised by the final orders made on the appeal.
Applicable Law
A judgment creditor may enforce a judgment of the Magistrates’ Court in this Court once the judgment is registered in this Court pursuant to s 112 of the MCA. That section provides:
(1) If—
(a)an order is made by the Court in a civil proceeding for the payment of money; and
(b)a warrant to seize property has been returned unsatisfied in whole or in part—
a registrar must, on the application of the person entitled to enforce the order, give that person a certificate of the order and of the amount remaining unpaid under the order and record the fact of the giving of the certificate in the register of the Court.
(2)A person who is given a certificate under subsection (1) may file the certificate in the Supreme Court and, on the filing of the certificate, judgment is deemed to have been entered in the Supreme Court for the sum mentioned in the certificate as being unpaid together with all fees paid for obtaining and filing the certificate and the prescribed amount for costs.
(3)After the issue of a certificate under subsection (1) no further proceedings (other than proceedings under the Judgment Debt Recovery Act 1984) must be taken in the Magistrates’ Court but, on the filing of the certificate in the Supreme Court, the judgment deemed to have been entered may be enforced by the same means as any other judgment entered in the Supreme Court, including enforcement under the Foreign Judgments Act 1962.
Order 68 of the Rules governs warrants of execution generally. A warrant of execution is a process of the Court which issues to enforce a judgment or order. Rule 68.02 of the Rules provides:
(1)Notwithstanding Order 66, a warrant of execution to enforce a judgment shall not be issued without the leave of the Court in the following cases—
(a)where six years have elapsed since the judgment took effect;
(b)where any change has taken place, whether by assignment or death or otherwise, in the identity of the persons entitled or liable to execution under the judgment;
(c)where the judgment is against the assets of a deceased person coming to the hands of the deceased's executor or administrator after the date of the judgment, and it is sought to issue execution against assets of that description;
(d)where under the judgment a person is entitled to enforce it subject to the fulfilment of a condition;
(e)where the warrant is against property in the hands of a receiver appointed by the Court or of a sequestrator;
(f)where the judgment is for a sum in a currency not Australian dollars.
(2)Paragraph (1) does not affect any provision of or under any Act requiring the leave of the Court before a judgment may be enforced.
(3)An application for leave under paragraph (1) may be made without notice to any person, unless the Court otherwise orders.
(4)The application shall be supported by evidence on affidavit showing-
(a)where the judgment is for the payment of money, the amount, including any interest, due on the date of the application;
(b)where paragraph (1)(a) applies, the reasons for the delay;
(c)where paragraph (1)(b) applies, the change which has taken place;
(d)where paragraph (1)(b), (1)(c) or (1)(d) applies, that a demand to satisfy the judgment has been made on the person liable to satisfy it and that the person liable has not satisfied it;
(e)that the applicant is entitled to proceed to execution on the judgment; and
(f)that the person against whom execution is sought is liable to execution on the judgment.
By s 5(4) of the Limitation of Actions Act 1958 (Vic) (‘LAA’), an action shall not be brought upon any judgment after the expiration of fifteen years from the date on which the judgment became enforceable.[7] It has been held, under the equivalent rule in the United Kingdom, that the requirement under the Rules for leave to issue execution on a judgment after 6 years have elapsed is not invalid on the grounds of inconsistency with the LAA.[8] Essentially, that is because the limitation statute limits the right to sue on a judgment, a matter of substantive law, whereas the Rules are concerned with execution on a judgment, a matter of ‘procedural machinery for enforcing a judgment when obtained’.[9]
[7]Sub-section 5(7) further provides ‘…an action shall not be brought to recover any arrears of interest in respect of any sum of money … in respect of a … judgment…or any damages in respect of such arrears, after the expiration of six years after they became due’.
[8]WT Lamb & Sons [1948] 2 KB 331, 337.
[9]Ibid (Scott LJ).
Rule 68.02(4) of the Rules requires that an application for leave be supported by evidence on affidavit showing a number of matters. In this case, Credit Corp needs to show:
(a) the amount due, including interest, on the date of the application (r 68.02(4)(a));
(b) because six years have elapsed since the judgment took effect, the reasons for the delay (r 68.02(4)(b));
(c) because a change has taken place, by assignment, in the identity of the person entitled to execution under the judgment:
(i) the change which has taken place (r 68.02(4)(c)); and
(ii) that a demand to satisfy the judgment has been made on the person liable to satisfy it and that the person liable has not satisfied it (r 68.02(4)(d));
(d) that it is entitled to proceed to execution on the judgment (r 68.02(4)(e)); and
(e) that the defendant is liable to execution on the judgment (r 68.02(4)(f)).
Reasons for delay
The purpose of the requirement to provide reasons for the delay in enforcing the judgment was explained by Pagone J in Dennehy v Reasonable Endeavours Pty Ltd[10] :
The purpose of the requirement is to put the Court in the position of being able to assess whether it should grant the leave being sought. Delay due to abandonment of rights or indifference to them would tend against the grant of leave. The purpose of the requirement is not simply for a tardy judgment creditor to be embarrassed by a statement of the delay. A mere statement of inactivity might amount to a statement of delay, and on one view of the word "reasons" such a statement might even be said to show the reasons for the delay. The plaintiff seeking leave needs to show reasons for the delay which, as the Rule states, supports the application.[11]
[10][2001] VSC 447 (‘Dennehy’).
[11]Ibid [11].
In that case the plaintiff provided an explanation which supported the grant of leave by showing an initial inability to enforce the judgment (through no fault of the plaintiff), a subsequent prompt attempt to recover upon the judgment and a course of dealing with the defendant that sought to accommodate his requests and situation in order to ensure payment.
Assignment
The evidence on affidavit required by rr 68.02(4)(c) and (d)[12], is evidence of a valid and enforceable assignment and that a demand to satisfy the judgment has been made on the person liable to satisfy it and that the person liable has not satisfied it.
[12]Consequent upon a change by assignment in the identity of the persons entitled to execution under the judgment.
Generally speaking, a judgment at law for a sum of money creates an obligation of its own force. The pre-existing obligation, which the judgment is intended to enforce, merges in the new obligation so created, and, for most purposes as between the parties, the judgment is conclusive evidence of the existence of the obligation which it creates. It may, in some circumstances, be set aside by the Court which entered it, but unless and until it is set aside it is generally speaking conclusive evidence of the existence of the obligation which it creates.[13]
[13]Corney v Brien (1951) 84 CLR 343, 353 (Fullagar J). See also Blair & Perpetual Trustee Co Ltd v Curran (Adams’ Will) (1939) 62 CLR 464; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, 597, Chamberlain v DCT (1988) 164 CLR 502, 511, 510, 512.
As the Judicial Registrar rightly noted, it is, as a general rule, only in proceedings in bankruptcy that a Court may go behind the judgment and enquire into the existence of the debt upon which it is said to be founded. In this case the defendant has sought to set aside the judgment in the Magistrates’ Court and has been unsuccessful. In those circumstances, it is not open to the defendant in this application to go behind the judgment, as he sought to do, to contest the underlying debt, no matter how sympathetic to the plight of the defendant the Court might be having regard to the uncontested facts advanced by him.
It is clear that both in equity and at law a judgment may be the subject of an assignment.[14] The legal assignment of things in action is governed by s 134 of the Property Law Act 1958 (Vic) (‘PLA’). By that section, so far as is relevant:
Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, shall be and shall be deemed to have been effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice –
(a) the legal right to such debt or thing in action;
(b) all legal and other remedies for the same; and
(c)the power to give a good discharge for the same without the concurrence of the assignor…
[14]Gould v Skinner [1983] 1 Qd R 377 (McPherson J) and the cases there cited at 385-389; see also McIntosh v Shashoua (1931) 46 CLR 494, 503.
In the case of a valid legal assignment of a judgment, the section places the assignee in the same position as the assignor to enforce the judgment by execution.[15]
[15]Goodman v Robinson (1886) 18 QBD 332.
Express notice (to distinguish implied or constructive notice) is required by the section for the acquisition of the legal title to the property and also to determine priority from competing assignments.[16] The notice may be given at any time and may be given either by the assignor or by the assignee.[17] The date of the notice referred to in the section is the date upon which the debtor received it.[18] The language of the notice is immaterial if the meaning is plain, but the plain meaning must be that the debt and the right to receive it have been transferred to the third party.[19] This involves clearly identifying the fact of the assignment, the assignee, the amount of the debt and the date of the assignment.[20]
[16]Marchant v Morton Down & Co [1901] 2 KB 829; S Robinson, The Property Law Act Victoria (Law Book Co 1992) 319.
[17]Holt v Heatherfield Trust Ltd [1942] 2 KB 1; LexisNexis, Halsbury’s Laws of Australia, (at 7 February 2018) 315 Personal Property, ‘Express Notice’ [315-450].
[18]Holt v Heatherfield Trust Ltd [1942] 2 KB 1; S Robinson, The Property Law Act Victoria (Law Book Co 1992) 320.
[19]Tallcott Ltd v Lewis & Co Ltd [1940] 3 All ER 592, 595, 599-600; William Brandt's Sons & Co v Dunlop Rubber Company Ltd [1905] 2 AC 454, 462; Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423, 438-9 (Dixon and Evatt JJ).
[20]LexisNexis, Halsbury’s Laws of Australia, (at 7 February 2018) 315 Personal Property, ‘Express Notice’ [315-450]and the cases there cited.
A person may still make an equitable assignment of a debt (or judgment) for which notice is unnecessary.[21] The giving of notice to the debtor is not essential to the validity of an equitable assignment of a presently existing legal chose in action, in contra-distinction to the requirement in s 134 of the PLA.[22] A purported assignment of a legal chose in action, for value, which fails to satisfy the requirement of s 134 of the PLA of ‘express notice in writing’ will be effectual as an equitable assignment.[23]
[21]William Brandt’s Sons & Co v Dunlop Rubber Co Ltd [1905] 2 AC 454, 461.
[22]J D Heydon, M J Leeming & P G Turner, Meagher, Gummow and Lehane’s Equity Doctrines & Remedies (LexisNexis Butterworths, 5th ed, 2015)[6-435] and the cases cited at fn 430.
[23]Thomas v National Australia Bank Ltd, [2000] 2 Qd R 448; Alma Hill Constructions Pty Ltd v Onal (2007) 16 VR 190, [8].
It is noted that the requirements of r 68.02(4)(d) (that demand has been made on the judgment debtor) is not the same as the notice requirement for a legal assignment, that is the notice of assignment required by s 134 of the PLA. This shows, in my opinion, that the rule is not concerned with whether or not the assignment is legal or equitable. The rule is neutral in regard to that. What is required is merely that the demand to satisfy the judgment has been made on the debtor and that that person has not satisfied it.
The rule that an equitable assignee suing on an assigned debt must join the assignor before entering the final judgment so that the debtor is protected and given a full release[24] has little work to do in a case where, as here, judgment has already been entered by the assignor and what is assigned is the judgment. The requirement to join the assignor is a rule of practice or procedure in proceedings to recover the assigned debt.[25] Moreover, the purpose of the requirement is to bind the assignor to the judgment between the assignee and the debtor, so that the assignor might not later dispute the assignment, or the right of the assignee to receive direct payment of the assigned debt from the obligor.[26] This is not such a proceeding. It is, as Scott LJ observed in WT Lamb & Sons, a matter of procedural machinery for enforcing a judgment when obtained.[27] In any event, the assignor, CBA, is the named plaintiff. Its name is used by Credit Corp with the authority of CBA under the Master Debt Sale Agreement (‘MDSA’) (as to which see below at 45 to 61).
[24]Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 [78] (Gummow and Bell JJ); Westbourne Grammar School v Sanget Pty Ltd [2007] VSCA 39 [9] (Nettle JA); Alma Hill Constructions v Onal (2007) 16 VR 190 [11], [13], [41], [43] –[44]; Timbercorp Finance Pty Ltd v FTM Nominees Ltd [2015] VSC 498 [8]-[12]
[25]Thomas v National Australia Bank Ltd, [2000] 2 Qd R 448; Alma Hill Constructions v Onal (2007) 16 VR 190 [44].
[26]Alma Hill Constructions v Onal (2007) 16 VR 190, [14].
[27]WT Lamb & Sons [1948] 2 KB 331, 337.
Entitlement of applicant and liability of judgment debtor
In relation to the requirements that the applicant show that it is entitled to proceed (r 68.02(4)(e)), and the defendant is liable to execution on the judgment (r 68.02(4)(f)), the purpose is to show an existing legal right to issue execution,[28] and a corresponding liability on the part of the judgment debtor. In Dennehy[29] Pagone J dealt with the two requirements together as a matter of convenience. In doing so he referred to and relied upon the decision of Menhennitt J in Solic v Bertossa.[30] In Solic[31] the application was made under the former Rules of Court[32] (Order 42, rule 23) where the only express requirement was that the applicant was entitled to issue execution. There was no corresponding requirement for the applicant to support the application for leave ‘by evidence on affidavit showing… that the person against whom execution is sought is liable to execution on the judgment’. Nevertheless, the extra requirement under the current Rules does not seem to alter what the applicant must show by its evidence. In my view the observations of Menhennitt J in Solic, and Pagone J in Dennehy remain apt to describe the requirements of the combined operation of rr 68.02(4)(e) and (f).
[28]Dennehy [2001] VSC 447 [12]-[13].
[29][2001] VSC 447.
[30][1969] VR 594, 595 (‘Solic’).
[31][1969] VR 594.
[32]General Rules of Procedure in Civil Proceedings 1957 (Vic).
That is because, as Menhennitt J observed in Solic,[33] the purpose of the applicant showing its entitlement to proceed to execution on the judgment is to give the judgment debtor an opportunity of having the judge investigate whether the applicant is still entitled to issue execution, in the sense that the applicant has an existing legal right to issue execution.[34] It is difficult to see why, once that is shown, at least at a prima facie level, it does not also show a corresponding liability on the part of the judgment debtor to that execution.
[33][1969] VR 594, 595.
[34]Solic [1969] VR 594, 595.
The judgment debtor may be able to show the existence of some agreement or arrangement entered into between the debtor and the applicant which would negative the presence of an existing right or make it inequitable or unjust for execution to issue.[35] Such an event might be an accord and satisfaction of the judgment debt (by way of compromise for example). The burden of proof of the applicant that it is entitled to proceed to execution on the judgment will usually be discharged by proof of the judgment, that it is not statute barred and is in force and evidence on affidavit that some or all of it remains unpaid.[36] The proof of those matters would also seem, in the main, to satisfy the requirement that the debtor is liable to execution on the judgment. The onus is then on the defendant to show ‘some arrangement entered into between him and the judgment [creditor] which would make it inequitable or unjust for execution to issue’.[37]
[35]Solic [1969] VR 594, 595; Dennehy [2001] VSC 447 [12]-[13]; Hammon v Kampfhenteel [1895] 21 VLR 202, 203.
[36]Solic [1969] VR 594, 595; Dennehy [2001] VSC 447 [16].
[37]Solic [1969] VR 594, 596; Dennehy [2001] VSC 447 [17].
The power to grant leave pursuant to r 68.02 is discretionary.[38] Like all discretions, it must be exercised judicially, that is, not by reference to irrelevant or extraneous considerations, but upon facts connected with or leading up to the matter.[39]
[38]WT Lamb & Sons v Rider [1948] 2 KB 331; World Square Pty Ltd v Taylor [1990] 1 Qd R 583, 588 (‘World Square’).
[39]See for example in relation to costs, Latoudis v Casey (1990) 170 CLR 534, 537; cited with approval in Oshlack v Richmond River Council (1998) 193 CLR 72, 86.
In In the estate of Carter; Re Ascot Timber Co Pty Ltd v Carter,[40] there was an application for leave to issue execution against an executor. It was held that the only function of the Court on an application for leave under a predecessor of this provision is to ensure that the party applying is entitled as a matter of legal right to issue execution.[41] That case arose under the former Rules of Court (to which I have earlier referred) where the only requirement under the rule was for the applicant to establish an entitlement to execution on the judgment.
[40][1928] VLR 290 (Irvine CJ).
[41]See also Solic [1969] VR 594 ; Dennehy [2001] VSC 447.
In World Square,[42] Lee J in the Supreme Court of Queensland, considered the question of the scope of the discretion under the Queensland rules, which were similar to the former Victorian Rules of Court. After reviewing the authorities,[43] he concluded:
It seems to me that the foregoing authorities indicate that notwithstanding that the plaintiff establishes a legal right which the defendant has not negatived, the court has a general discretion under its rules of procedure whether or not to grant leave to the plaintiff to issue execution. Either party is entitled to place before the court matters which are relevant to the exercise of the discretion. There is an evidentiary onus on the defendant to show some other arrangement or reason why it would be inequitable or unjust for the plaintiff to issue execution…Likewise, demonstrated prejudice may be a factor for the court to take into account in the exercise of its discretion.
[42][1990] 1 Qd R 583.
[43]Including Solic [1969] VR 594; WT Lamb & Sons [1948] 2 KB 331; Hammon v Kampfhenteel [1895] 21 VLR 202.
Self-Represented Litigant
The defendant became self-represented after the hearing of the application by the Judicial Registrar. A judge has a duty to represented and unrepresented litigants alike to ensure that the hearing is conducted fairly and in accordance with law.[44] It is a frequent consequence of self-representation that the Court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy.[45] What a judge must do to assist a litigant in person depends on the litigant, the nature of the case, and the litigant’s intelligence and understanding of the case.[46] The judge cannot be the advocate of the self-represented litigant, for the role of the judge is fundamentally different to that of an advocate. The judge must maintain the reality and appearance of judicial neutrality at all times and to all parties. The assistance must be proportionate in the circumstances — it must ensure a fair trial and not afford an advantage to the self-represented litigant.[47]
[44]MacPherson v The Queen (1981) 147 CLR 512, 523; Dietrich v R (1992) 177 CLR 292; Werden v Legal Services Board (2012) 36 VR 637 [53].
[45]Neil v Nott (1994) 121 ALR 148, 150; Minogue v HREOC (1999) 84 FCR 438 [27]-[29],[33]; Platcher v Joseph [2004] FCAFC 68 [104].
[46]Abram v Bank of New Zealand (1996) ATPR 41–507, 43,341, 43,347.; Minogue v HREOC (1999) 84 FCR 438 [27]-[29], [33]; Platcher v Joseph [2004] FCAFC 68 [104]; Tomasevic v Travaglini (2007) 17 VR 100, 130.
[47](2007) 17 VR 100, 130 (Bell J).
The advice and assistance which a self-represented litigant ought to receive from the Court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which they will ordinarily suffer when faced by a lawyer, and to prevent destruction from the traps which the adversary procedure offers to the unwary and untutored. The Court should be astute, however, to see that it does not extend its auxiliary role so as to confer upon a litigant in person a positive advantage over the represented opponent. The Court must be patient in explaining the procedures to the self-represented litigant and may be lenient in the standard of compliance which it exacts. But it must see that the rules are obeyed, subject to any proper exceptions. To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent.[48]
[48]Rajski v Scitec Corporation Pty Ltd, Unreported, Court of Appeal, NSW, Full Court, No CA 146 of 1986, (16 June 1986) 14.
In Loftus v Australia and New Zealand Banking Group Ltd (No 2)[49] the Court of Appeal quoted with approval from its decision in Trkulja v Markovic:[50]
In determining the proper scope of assistance to be offered to a self‑represented litigant, the touchstones are fairness and balance. The assistance may extend to issues concerning substantive legal rights as well as to issues concerning the procedure that will be followed.[51] In some cases, it may be necessary for the judge to identify the issues and the state of the evidence in relation to them so as to enable the self-represented litigant to consider whether he or she wishes to adduce evidence.[52] It is elementary that a judge ought to ensure that the self-represented litigant understands his or her rights so that he or she is not unfairly disadvantaged by being in ignorance of those rights. Notwithstanding this, the judge should refrain from advising a litigant as to how or when he or she should exercise those rights.[53]
[49][2016] VSCA 308 [27]-[28].
[50][2015] VSCA 298 [39].
[51]McWhinney v Melbourne Health (2011) 31 VR 285, 293 [25] (Neave, Redlich and Mandie JJA), quoting Tomasevic v Travaglini (2007) 17 VR 100, 130 [141] (Bell J).
[52]Werden v Legal Services Board (2012) 36 VR 637, 651 [57] (Redlich JA; Tate JA agreeing).
[53]Pamamull v Albrizzi (Sales) Pty Ltd (No 2) [2011] VSCA 260 [102] (Neave, Harper and Hansen JJA).
I have endeavoured to apply these precepts in this case and to afford the defendant and his litigation guardian such assistance as is appropriate.
Defendant’s personal circumstances
The evidence which lead to the appointment of Morena as Raymond’s litigation guardian was partly contained in Raymond’s and Morena’s affidavits. It shows that he has been unable to manage his financial affairs since about 1985 and suffers a range of medical conditions.
Morena deposes that Raymond lived in a converted garage at the rear of 13 Edgar Street, Reservoir (‘the Edgar Street address’).[54] Because of Raymond’s mental health ‘issues’, from about 1980 (or 1985, it is unclear) his sister Claudia assisted him to manage his affairs. She received his mail, reminded him to pay his bills and helped him with day to day matters.[55] In 2002, Raymond won over a million dollars in Tattslotto, and Claudia assisted him in managing the winnings. With the winnings, he purchased 16 Crispe Street, Reservoir and placed moneys on deposit with banks, including the CBA.[56] Claudia’s management of Raymond’s financial affairs ended in about 2011-2012 following a family dispute of some kind. In about 2014 Morena assumed responsibility for Raymond’s medical care and management of his finances. Morena and Raymond attended the CBA on a number of occasions after 2014 to request banking documents and records, and were never informed of any credit card debt or judgment.[57] Moreover, it appears that Claudia had used Raymond’s funds without his knowledge pursuant to an authority he maintains is forged.[58] This lead to a complaint being made to the Victoria Police at Heidelberg and then the Preston Crime Investigation Unit.[59]
[54]Morena’s first affidavit [9].
[55]Ibid [7].
[56]Raymond’s second affidavit [5]-[6].
[57]Ibid [11]-[13].
[58]Ibid [19]-[38].
[59]Ibid [39]-[57].
The affidavits of Raymond and Morena give a long account of their attempts to find out what happened to deposits made in Raymond’s name with the CBA and when the credit card that gave rise to the judgment was obtained. Comparing the efforts of Raymond and Morena during the period from 2014 to 2016 to find out what had happened to his deposits with the CBA, and the efforts of Credit Corp to find Raymond, exposes a serious disconnect, no doubt a result of the assignment of the judgment debt. At the time of the assignment the CBA handed over all the information it had about Raymond, and thereafter naturally ceased to be interested as it was no longer entitled to recover under the judgment. Thus, the criticism made by the defendant in his and Morena’s affidavits of the lack of knowledge by Credit Corp of his health, place of living and financial circumstances is evidently a product of the fact that the defendant was seeking to deal with the CBA over his personal affairs at a time when the Bank had already parted with the judgment and had no interest in it.
Submissions and consideration
It can be seen from the reasons of the Judicial Registrar that the refusal to grant leave was based on the applicant not satisfying the Court of the following:
(a) the nature of the assignment which is said to have taken place between the plaintiff and Credit Corp;
(b) the correct identity of the plaintiff depending on the nature of the assignment;
(c) the documentary chain of that assignment;
(d) the provision of a notice of assignment to the defendant;
(e) the reasons for the delay in proceeding to execution.
The defendant was not capable of conducting his case on the appeal, and his sister Morena, although capable and conscientious, did not grasp (at least at first) the limited scope of the matters capable of being considered in the appeal. So, for example, she filed an affidavit (Morena’s second affidavit) which canvassed the matters said to undermine the judgment given in the Magistrates’ Court, where that Court had refused to set aside that judgment.
Morena did raise, in one way or the other, the matters that were considered by the Judicial Registrar and that moved him to refuse the leave sought by Credit Corp. I will not repeat them here as they are sufficiently summarised in the extract from the reasons given above. It is those matters that were attacked on the appeal by Credit Corp, so I will treat them as the issues in the appeal.
I should mention that the evidence given in Carpenter’s first affidavit substantially satisfied the first requirement, that is the amount due, including interest, on the date of the application (r 68.02(4)(a)). By s 101 of the Supreme Court Act 1986 (Vic), the judgment carries interest at the rate for the time being fixed under s 2 of the Penalty Interest Rates Act 1983 (Vic) from the time the judgment was given. The interest so calculated amounted to $23,605.49 as at 15 June 2016. The amount of interest accruing between 15 June and the date of the application, 23 June 2016, was readily calculable in accordance with the evidence given.
Assignment
Credit Corp maintained that it had established that on 18 December 2009, pursuant to the MDSA, CBA assigned to Credit Corp all its right title and interest in the debt of $34,816.37, and that included the judgment.
In Carpenter’s first affidavit, the evidence was restricted to a statement of belief based on a perusal of the MSDA, which was executed on 26 February 2009, and a subsequent Amendment Schedule which extended the date range of the debts assigned.[60] Carpenter also gave evidence that he believed that on 22 December 2009 a Notice of Assignment of Debt (‘Notice’) was sent to the defendant at the Edgar Street address, and produced a copy of that Notice.[61]
[60]Carpenter’s first affidavit [6].
[61]Carpenter’s first affidavit, exhibit AC-3. Carpenter’s second affidavit, exhibit AC-5.
A redacted copy of the MDSA was exhibited to Carpenter’s second affidavit.[62] Carpenter describes the MDSA as a ‘Forward Flow Agreement’ whereby a bundle of debts contained in a Debt Tranche are offered for sale by the CBA to Credit Corp over a term specified in the MDSA. The redactions and the justification for them were explained in Carpenters fourth affidavit. I consider the explanations for redactions, and the other matters addressed in that affidavit make it appropriate for leave to be given for it to be relied on in the appeal. I will mention the other matters in that affidavit later.
[62]Exhibit AC-1.
The MDSA is a complex document and I will not set out all its relevant terms and conditions. The MDSA provided for CBA to sell and assign Debt Tranches[63] to Credit Corp, and Credit Corp agreed to acquire Debt Tranches from CBA on a monthly basis in respect of the credit card and personal loan Account Facilities contemplated by the agreement, or as otherwise agreed by the parties from time to time, in accordance with the terms and conditions of the agreement. On each occasion that CBA and Credit Corp agreed to a sale of a Debt Tranche, they must execute a Sale Authority detailing the volume, nature and type of the Debt Tranche and the Purchase Price for the same in the form set out in Annexure C to the MDSA.[64] The initial term of the MDSA was to 30 June 2009.[65]
[63]Defined in clause 1.1 of the MDSA to mean ‘a tranche of Account Facilities and Bad Debts offered for sale by CBA to the Acquirer under the Sale Authority in accordance with this document.’
[64]Each of the capitalised terms is defined. For present purposes it is not necessary to go into the detail of those definitions.
[65]Clause 14.1.
The actual assignment clause in the MDSA provided:
Subject to the payment of the Purchase Price, CBA assigns to the Acquirer on and from the Assignment Date, all its legal and beneficial rights, title and interest in and to each Account Facility and Bad Debt comprising the Debt Tranche, together with the benefit of any judgment obtained by CBA.
The MDSA provided also for assignment of judgments as follows:
In the event that CBA has obtained judgment in any State or Federal court against any of the Debtor(s) in respect of a Bad Debt, then CBA authorises the Acquirer in the name of CBA, but at the expense of the Acquirer to take all steps and institute all procedures and proceedings necessary for the recovery of that Bad Debt, including execution of judgment, and for that purpose, CBA must do all things reasonably necessary and execute all Relevant Documents reasonably required by the Acquirer to this end, and the Acquirer will ensure that the Court is aware of the assignment of the Account Facility and Bad Debt.[66]
[66]Clause 2.5 of the MDSA, exhibit AC-1 to Carpenter’s second affidavit.
On or about 7 July 2009, CBA and Credit Corp entered into an agreement to vary the MDSA for Debt Tranches offered for sale from 1 July 2009 which had the effect of amending the MDSA so that its term continued until 30 June 2010.[67]
[67]Carpenter’s second affidavit [8], exhibit AC-2.
On 18 December 2009, CBA assigned to Credit Corp the debt owed by Raymond to CBA, together with the judgment, by way of a Sale Authority specifying the assignment date to be 18 December 2009 and the Debt Tranche to be as specified in an annexure. The assignment was effected by CBA sending to Credit Corp an email on Friday 18 December 2009 stating so far as relevant:[68]
Please find the attached debt load for Credit Cards.
There are 111 files totalling [redacted amount]. Amount payable is [redacted amount]
The Annexure C will be sent with the Personal Loan debt load on Monday
[68]Carpenter’s second affidavit [10], exhibit AC-3.
Attached to the email was a form of Annexure A, in the form required under the MDSA, setting out the categories of debts assigned (Credit Card and Personal Loan debts) and the text in Annexure A referred to the Bad Debts being detailed in a compact disc attached to the Annexure. Under this Annexure A there were further compact discs to be provided containing complete files of all account documentation and contact information. In Carpenter’s fourth affidavit further detail was given as to the content of the compact disc that accompanied the 18 December 2009 email, it being an excel spreadsheet containing particulars of the debts to be sold and assigned and particulars of the debtors.
On Monday 21 December 2009, a further email was sent by CBA to Credit Corp attaching Annexure C, the Sale Authority. That Sale Authority provided, so far as relevant:[69]
In accordance with the terms of the Master Debt Sale Agreement between the Commonwealth Bank of Australia … and Credit Corp Services Pty Ltd (‘the Acquirer’) (‘Agreement’), each time the parties agree to a sale of Bad Debt Tranche, the parties will execute this Sale Authority, which will be governed by the terms of the Agreement.
By the Acquirer making the Payment of the Purchase Price pursuant to this executed Sale Authority, the parties agree to the sale by CBA to the Acquirer of the Bad Debt Tranche comprised in Annexure A attached, for the Purchase Price and with effect from the Assignment Date as described below in accordance with the terms and conditions of the Agreement.
Assignment Date: 18/12/2009
Bad Debt Tranches: Bad Debts and relevant Account Facilities specified in Annexure A attached.
Purchase Price: [redacted] cents in the Australian dollar per each Australian dollar of a parcel of Bad Debts purchased by the Acquirer for Credit Cards (forward flow).
Size of parcel of Bad Debts being sold: AUD (Australian dollars) [redacted].
[69]Carpenter’s second affidavit [10], exhibit AC-3.
Carpenter’s second affidavit also produced a printout of the excel spread sheet which set out the Bad Debts included in the Debt Tranche the subject of the Assignment of 18 December 2009.[70] In Carpenter’s fourth affidavit he gave a further explanation of the printout of the excel spread sheet and produced a further printout which contained only the column headings and the information listed in relation to the defendant’s debt and the defendant.[71]
[70]Carpenter’s second affidavit [11], exhibit AC-4.
[71]Carpenter’s fourth affidavit [12], exhibit AC-1.
At the time of the assignment, CBA provided to Credit Corp notes in relation to the defendant and his debt to the CBA. These notes were incorporated into the Account Summary Notes which were subsequently maintained by Credit Corp since the Assignment. Carpenter’s fourth affidavit also refers to payment by Credit Corp to CBA for the Bad Debt Tranche which included the defendant’s debt and judgment.[72]
[72]Carpenter’s fourth affidavit [16].
Credit Corp submitted that, contrary to the findings of the Judicial Registrar, there was no confusion as to the precise nature of the assignment. It comprised all the legal and beneficial rights, title and interest which the CBA held in the judgment. Nor was there any ambiguity about the proper plaintiff. However, the validity of any legal assignment depends on the assignee being given express written notice of the assignment as required by s 134 of the PLA, otherwise it remains equitable in nature. This is so notwithstanding that the MDSA purports to effect a legal assignment.
The chain of the assignment
Having regard to the above analysis of the MDSA and the Sale Authority given pursuant to it, it is not strictly necessary to deal with the issue of the so called chain of the assignment. Nevertheless, Credit Corp made detailed submissions on the matter and I should in fairness deal with them, if only for the benefit of the defendant.
Credit Corp submitted that the chain of the assignment was established by Carpenter’s affidavits and the documents exhibited to those affidavits. There were two matters which caused the Judicial Registrar to find that the chain of assignment had not been established. First, the Judicial Registrar mentioned that the email dated 18 December 2009 from CBA to Credit Corp did not, on its face, refer to the earlier MDSA.[73] However, it is apparent from the following matters that the assignment took place pursuant to the MDSA:
[73]Carpenter’s second affidavit [10], exhibit AC-3.
(a) the MDSA was in force as at December 2009;
(b) only the MDSA was in evidence as the operative agreement between CBA and Credit Corp;
(c) there was no evidence that at the time CBA was selling debts to Credit Corp under any other agreement;
(d) the emails dated 18 and 21 December 2009 from CBA to Credit Corp contained attachments which were identified as Annexure A and Annexure C, which were in substantially the same form as Annexure A and Annexure C to the MDSA;
(e) Mr Carpenter deposed that the judgment had been assigned under the MDSA.[74]
[74]Carpenter’s second affidavit [10], Carpenter’s fourth affidavit [6].
I agree with these submissions. The text of the Sale Authority set out in paragraph 54 above leaves no room for doubt that it was given pursuant to the MDSA.
Second, the Judicial Registrar mentioned that the annexure to CBA’s email to Credit Corp, a redacted version of which is exhibit AC-4 to Carpenter’s second affidavit, did not refer to the judgment or the amount of the debt the subject of the assignment. In fact, the annexure listed a debt of the defendant in the sum of $34,816.37.[75] The difference between the amount of the judgment and the amount specified in the annexure to the email (which was, as delivered, a compact disc containing an excel spreadsheet) is small and, I would infer, attributable to interest on the judgment debt since it was entered. In my view nothing turns on this discrepancy. It is clear on a detailed analysis of the MDSA and the documents annexed to the emails of 18 and 21 December 2009 that the Bad Debt Tranche assigned by the Sale Authority included the judgment.
[75]Carpenter’s fourth affidavit, exhibit AC‑1.
Identity of the plaintiff
Credit Corp submitted that:
(a) it was abundantly clear from the affidavits filed on behalf of Credit Corp that the application for leave to enforce the judgment was made on behalf of Credit Corp and not CBA.
(b) where a correctly named plaintiff enters judgment, there is neither power nor reason to amend the judgment by reason of events which post-date it, such as an assignment of the judgment. Moreover, r 68.02(1)(b) of the Rules does not require or envisage that an assignee who seeks leave to enforce a judgment will be added or substituted as a plaintiff.
Clause 2.5 of the MDSA (quoted above at [50]) plainly authorises Credit Corp to use CBA’s name in enforcing the judgment. That includes registering the judgment in the name of CBA with the Supreme Court. But, because Credit Corp maintains that it is the assignee at law of the judgment, and not just in equity, it would be misleading and perhaps wrong for it proceed in the name of CBA to apply for leave under r 68.02 of the Rules. Thus, because the judgment is in the name of CBA, it is registered in this Court under that name by Credit Corp pursuant to the authority given in the MDSA, and then in its own name Credit Court applies for leave to execute on the judgment. The difficulty of amending the judgment in the Magistrates’ Court, and the expense that would entail, or registering the judgment in this Court and then seeking to amend the name of the judgment creditor, would seem to me to be wholly unnecessary and not in accordance with the overarching purpose of the rules of Court prescribed by s 7 of the CPA, to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute.
In any event, as I have said, CBA is the named plaintiff. Its name is used by Credit Corp with the authority of CBA under the Master Debt Sale Agreement (‘MDSA’). In those circumstances, CBA could not itself recover under the judgment in addition to Credit Corp because if the judgment is enforced by the issue of a warrant in this Court, that warrant will be in, or include, its name.
I agree with the submission of Credit Corp that the language of r 68.02(1)(b), and rr 68.02(4)(c) and (d) does not require or envisage that an assignee who seeks leave to enforce a judgment will be added as a party or substituted as a plaintiff. When the MDSA is read and understood, there is no confusion about who is entitled, at least in equity, to the judgment. It can only be Credit Corp. Whether the legal assignment pursuant to s 134 of the PLA is effective, however, turns upon the effectiveness of the giving of the notice in writing of the assignment to the defendant.
Notice of assignment
Credit Corp submitted that, in contradistinction to the requirements of s 134 of the PLA, the giving of a notice to a debtor is not essential to the validity of an equitable assignment of a legal chose in action.[76] Despite notice to the defendant not being a requirement to the efficacy of the assignment, in any event, Credit Corp contended, the affidavits of Adam Carpenter that were served in the proceeding constituted notice of the assignment.
[76]J D Heydon, M J Leeming & P G Turner, Meagher, Gummow and Lehane’s Equity Doctrines & Remedies (LexisNexis Butterworths, 5th ed, 2015) [6]-[435].
The notice said to have been sent to the Edgar Street address dated 22 December 2009 provided:[77]
[77]Carpenter’s first affidavit, exhibit AC-3; Carpenter’s second affidavit, exhibit AC-5.
Account details: Commonwealth Bank of Australia 5353185274597104
Reference No: DT881655 Balance Outstanding: $34,816.37
Notice of Assignment of Debt
Dear Raymond Saggese,
Notice is hereby given that on 18 December 2009 Commonwealth Bank of Australia assigned to Credit Corp Services Pty Ltd all its beneficial rights, title and interest in the above listed debt. This Notice refers to the amount due and claimed herein, or any further amount which may become due by you on the above account.
We further advise that you are in default of your credit contract the subject of this account. If your personal details have not already been listed with a Credit Reporting Bureau under the terms of this credit contract, they may be listed any time after thirty (30) days of the day of the this letter.
You are now advised that we require immediate payment of this debt by one of the payment options listed overleaf. If you are unable to pay this debt in full, or you have any queries in relation to it, you must contact the writer immediately quoting reference number DT881655.
Yours faithfully,
Jeremey McCann
Customer Relations Manager
1300 303 983
The mode of sending is not given in Carpenter’s affidavits. Presumably it was sent by ordinary mail. The evidence of Raymond is that he did not receive it. He had no knowledge of the debt or the judgment until July 2016.[78] It is possible that the mail sent to this address never got to him, it being intercepted by his sister Claudia, or that he simply did not understand what he received if he received it.
[78]Raymond’s first affidavit [16].
The Judicial Registrar was correct when he concluded that Credit Corp’s evidence did not adequately establish the manner and circumstances in which the notice of assignment was apparently sent to the defendant. There was no evidence of the mailing practices of Credit Corp, or a mail record relied on to demonstrate if and when the notice of assignment was sent. The evidence of the defendant that he never received the notice of assignment, combined with the lack of evidence as to delivery, means that I am not satisfied that the notice was given before the application was made, in the sense relevant to the operation of s 134 of the PLA. But as I have said, that means the assignment does not take effect as a legal assignment, only as an equitable assignment. The giving of notice to the debtor is not essential to the validity of an equitable assignment of a presently existing legal chose in action. So the absence of proper proof of the Notice merely has the result that Credit Corp can only establish a valid assignment of an existing legal chose in action, the judgment, as an equitable assignment. The fact that the notice of assignment refers only to the debt, notwithstanding that the debt has merged in the judgment, does not detract from the fact that the terms of the MDSA clearly effect a valid assignment of the judgment. The failure to prove the giving of the notice of assignment means that it is unnecessary to consider whether the reference to the debt alone is sufficient notice to effect a legal as opposed to equitable assignment of the judgment.
The terms of r 68.02 of the Rules do not, in my view, require an assignment to be a legal assignment. It is sufficient if the assignment is equitable, as is this case. As I have said above at [27], the rule is not concerned with whether the assignment is legal or equitable. What is required is that a demand to satisfy the judgment has been made on the defendant and he has not satisfied it. In this case, the application by summons supported by Carpenter’s first affidavit, and the extensive exhibits to that affidavit (which included copies of several letters of demand allegedly previously sent), amount to a demand that the judgment be satisfied. They were sent to the defendant and he received them, albeit by chance. He has denied any indebtedness and that, and the history of the application, are sufficient to show that he has not satisfied the judgment.
I should add for completeness that the address given on the application for the credit card was the defendant’s parent’s address, not his address (he had moved out in about 1985), and that the address to which the credit card statements were sent is the Edgar Street address,[79] but he swore he had never received them.[80] The Account Summary Notes produced by Carpenter show that Credit Corp were never certain of Raymond’s place of living, despite having been informed by his sister Claudia that he lived, and had lived for 20 years, at the Edgar Street address.
[79]Ibid [8], exhibit RS-2.
[80]Ibid [4].
Reasons for the delay
Credit Corp submitted that the Judicial Registrar was unduly influenced by an irrelevant consideration, namely the delay in proceeding to execution. There is no onus on an applicant to explain why it has not proceeded to execute on a judgment. The explanation that is required is to support the grant of leave. An exercise of discretion which focuses on the failure to have executed on a judgment, as opposed to other less draconian measures, does not sit well with the overarching purpose of the CPA and the Rules in relation to civil proceedings, which is to facilitate the just, efficient, timely and cost effective resolution of the issues.
Further, Credit Corp submitted that a proper exercise of discretion required the Judicial Registrar to give due consideration to the defendant’s obligation to pay the judgment debt, which he was required to do without any prompting. It is for the debtor to seek out the creditor and not vice versa.[81]
[81]Ehrenreich v Kwong [2002] VSC 477 [14] (Balmford J).
Credit Corp also referred to what was noted in Dennehy,[82] that, ‘[d]elay due to abandonment of rights or indifference to them would tend against the grant of leave’ and submitted that:
(a) Credit Corp had not abandoned its rights nor had it been indifferent to them; and
(b) in any event there was no basis for such a finding. Credit Corp made persistent attempts to recover under the judgment over an extended period and there was no proper basis for the discretion not to have been exercised in its favour.
[82][2001] VSC 447 [11].
The debt the subject of the judgment was incurred on a CBA Gold Credit Card. The defendant swore that he had never applied for such a credit card and gave particular evidence regarding the application form, which he produced, and transactions on the card, with which he had no connection. He only became aware of this proceeding in July 2016 when his sister Morena discovered a yellow envelope stuck in the fence at 16 Crispe Street, Reservoir. That envelope contained correspondence from Credit Corp and notice of this application. After sitting down with the defendant, to try and work out what the documents were about, Morena and Raymond attended the Melbourne Magistrates’ Court in July 2016 in an effort to obtain copies of the original Court file. They were told that the Court destroys the files after five years and as such they were unavailable.
The defendant swears that until the solicitors for Credit Corp provided him with credit card statements relating to the account and the credit card application form, he had never seen them before. He had no knowledge of the original Magistrates’ Court proceeding. He had remained a customer of CBA up until late 2012 and regularly attended the same bank branch to collect his pension. During the period between 2009 and 2012 he resided at the Edgar Street address and had provided that address to the bank as his current address.
In his first affidavit, the defendant maintained that Credit Corp had sat on their rights for over six years. During the period from 2009 the defendant continually resided at the Edgar Street address, save for occasional short term stays with friends and family when his mental health required assistance from others. He perused exhibits to Carpenter’s first affidavit (particularly exhibits AC-4 to AC-6) which contained the Account Summary Notes and purport to record the efforts of officers of Credit Corp to contact the defendant. He submitted that much of that activity consisted of continually telephoning distant relatives or people with the same surname as the defendant asking if they knew him. He is informed by both Morena and by his mother Maria and believes that at no stage did those agents disclose to them the purpose of their calls. That may be because, he opined in his first affidavit, pt 8 of the Debt Collection Guidelines for Collectors and Creditors published by the Australian Competition and Consumer Commission entitled ‘Privacy Obligations to Debtor and Third Parties’ provides that debt collectors should not disclose the purpose of their contact with third parties as this would breach privacy laws.
Thus, despite numerous attempts by Credit Corp to speak with the defendant and to contact his family members, at no stage did Credit Corp’s agents disclose the reason for wishing to speak with the defendant. The defendant’s family are protective of him, given his mental health issues, and they were in the habit of not providing any information to persons enquiring about him.
With some specificity, the defendant commented on the notes kept by Credit Corp as follows:
(a) the notes in exhibit AC-4 refer to a conversation on 6 December 2012 which stated:
Phone number called 0418 551 274, spoke with Claudia who advised that customer was not in frame of mind to deal with matter and for that reason, she is handling all of his affairs. I advised I would send an LOA C/O mother (Maria) as Claudia has advised that the customer is not at AOF and that he is in and out of mother’s house (also approved by TPM). I advised that once Claudia or Maria would fill this out and return it, I would be happy to divulge information. Claudia was fine with this and provided her address at 21 Malcombe Road, Ivanhoe 3079 in case the LOA could be sent there. [83]
[83]I infer LOA refers to a letter of authority.
The defendant was unaware of this until reading it in the exhibit;[84]
[84]Raymond’s first Affidavit [20(a)].
(b) the entry dated 1 August 2014 details a conversation between agents for the plaintiff and an unknown female in which she advised that the defendant was ‘mentally not well’ and informed them that he resided at the Edgar Street address. The defendant was unaware of this until reading the exhibits;[85]
(c) an entry dated 12 May 2015 shows that agents for Credit Corp had on a number of occasions erroneously attended 13 Crispe Street, Reservoir, a property unconnected with him in any way. I note, however, that in Carpenter’s third affidavit he points out that the notes were incorrect and that the agent had in fact attended 16 Crispe Street, Reservoir and recorded the address incorrectly in the notes;
(d) the notes record on 13 May 2015 that a bankruptcy notice was required due to time limits since the entry of judgment.[86] Then on 3 September 2015, after having put a hold on the bankruptcy notice because of uncertainty as to the residence of the defendant, the notes record instructions to proceed with the bankruptcy notice. It then appears that Credit Corp was unable to issue a bankruptcy notice because it was unlikely they would be able to serve the defendant personally. There was great uncertainty as to his place of living.[87]
[85]Raymond’s first affidavit [20(b)].
[86]Carpenter’s first affidavit, exhibit AC-6.
[87]Carpenter’s first affidavit [15]-[18], exhibit AC-5 and AC-6.
In relation to the issue of a bankruptcy notice, it is relevant to observe that such a notice cannot be issued if a period of 6 years has elapsed since the judgment was given.[88] This limitation is not subject to some grant of leave, as is the case under r 68.02 of the Rules.
[88]Bankruptcy Act 1966 (Cth), s 41(3)(c)(i).
On a cursory reading, the Account Summary Notes show a great deal of apparent activity on the part of Credit Corp in seeking to contact the defendant. So, after sending the notice of assignment to the defendant at the Edgar Street address on or about 22 December 2009 there were two letters or notices sent in 2010 (on 1 February to the Edgar Street address and on 18 November to 16 Crispe Street). Then in 2011 there was one letter sent to the Crispe Street address. In 2012 two letters, one on 14 March to the Crispe Street address and one on 6 December to the defendant care of his mother Maria at 107 Tyler Street, Preston. This may have been in consequence of speaking to the defendant’s mother on 6 September 2012.[89] Then letters were sent on 17 April 2015 to the defendant at the Edgar Street address.[90]
[89]See exhibit AC-4 to Carpenter’s first affidavit p 56 of 95.
[90]In addition, letters were sent on 8 December 2010, 6 January 2011 and 17 May 2011, although copies of these letters are no longer in the possession of Credit Corp: Carpenter’s first affidavit [12].
There are also recorded in the Account Summary Notes attempts to contact the defendant, often through those thought to be relatives. One attempt in 2009, seven attempts in 2010, one attempt in 2011, three attempts in 2012, four attempts in 2014, ten attempts in 2015 and one attempt in 2016.
A close analysis of the Account Summary Notes, however, paints a less satisfactory effort by Credit Corp to recover under the judgment. Significantly, the Account Summary Notes reveal no index search to identify whether the defendant owned any property until 29 April 2011, about 16 months after the assignment. All the activity recorded before then is sending pro-forma letters and notices and making telephone calls, activity which is likely to be of low cost. The search recorded the defendant’s address as being the Edgar Street address. The attempts to recover under the judgment or to enforce it during this initial period are best described as ‘desultory’.
The desultory nature of Credit Corp’s efforts to recover under the judgment continued. An example is given for 7 October 2011. A call was made to a number recorded to a Mr Christie at 16 Crispe Street, Reservoir. The call was answered and the caller, Cynthia Sutton of Credit Corp, records in the notes that she asked if ‘this was Raymond’ and the person answered ‘yes, who’s this?’. Ms Sutton records that she introduced herself and the call was immediately terminated. That response is consistent with a number of possibilities, including that it was taken as a ‘cold call’ by a seller or other provider of services.
Another is in February 2015, where the Account Summary Notes record:
Do not contact mother or sister- only send mail to 13 Edgar Street, Reservoir
SW sister who adv that she wanted address and number removed from our system as she isn’t dealing with her brother (sic) matters anymore – she adv he is living at Eggar St (sic) and has been there for 20 years. Thanked for time.
An examination of the Account Summary Notes produced by Credit Corp show that many of the actions recorded consisted of searches conducted on Facebook and other social media and the repeated ringing of persons with the same surname as the defendant notwithstanding that Credit Corp had already been told by a number of those persons that they did not know the defendant. A close analysis of the Account Summary Notes shows substantial periods of inactivity. There were nine periods of inactivity of over a month, two periods of over two months, two periods of over three months, three periods of over four months, two periods of over five months, one instance of inactivity over six months and a period of about 13 months between December 2012 and February 2014 when the major activity was what was called a ‘dialler campaign’. During that period various telephone numbers were called with either no answer, number busy, answering machine detected, line idle, cannot reach as dialled and so on. When these periods are combined they total about 60 months during which Credit Corp did, apparently, very little to pursue the enforcement of the judgment.
Notwithstanding that Credit Corp knew that the defendant owned the property at 16 Crispe Street, Reservoir, and had a good deal of information that indicated he lived at the Edgar Street address, it was not until 2016 that any effort was made to have a warrant of seizure issued out of the Magistrates’ Court. Had an attempt been made soon after the judgment to have a warrant to seize property issued out of the Magistrates’ Court, and that warrant was returned unsatisfied, it would have been possible to move earlier to the registration of the judgment in this Court. As it happened, Credit Corp made no attempt to have such a warrant issued until 26 February 2016. It was returned unsatisfied on 26 April 2016.[91] Only then could a certificate be given by the Magistrates’ Court pursuant to s 112 of the MCA. Such a certificate was given on 18 May 2016 and registered in this Court on 22 June 2016.
[91]Carpenter’s fifth affidavit [4], exhibits AC-1 and AC-2.
The Judicial Registrar noted that in April and May 2015 Credit Corp engaged field agents to attend the addresses it had for the defendant. They could not find him at the Edgar Street address and the field agent reported that a female occupant at 16 Crispe Street, Reservoir confirmed he did live at that address. Nevertheless, there remained uncertainty about that address because the field agent had earlier mistakenly recorded that he visited 13 Crispe Street. Confusion abounded and nothing was done.
The Judicial Registrar’s conclusion was that the attempts to recover the debt the subject of the judgment were somewhat sporadic and haphazard at times. It certainly was that. He was not satisfied that the explanation given provides adequate justification for the delay in proceeding to execution.
The question then is, whether Credit Corp is right when it submits that there is no onus on an applicant to explain why it has not proceeded to execute on the judgment. The rule requires evidence on affidavit showing the reasons for the delay that support the application. When in Dennehy[92] Pagone J spoke of a statement of inactivity being a statement of reason for the delay, he was, in my opinion, engaging a reduction ad absurdum, so as to show that the reasons must be such as to support the grant of leave after an elapse of 6 years. In that case, as I have said, the plaintiff provided an explanation which supported the grant of leave by showing an initial inability to enforce the judgment (through no fault of the plaintiff), a subsequent prompt attempt to recover upon the judgment and a course of dealing with the defendant that sought to accommodate his requests and situation in order to ensure payment.
[92][2001] VSC 447.
Here, the evidence adduced by Credit Corp shows a serious lack of application and diligence. In the early stages, between 2010 and 2011 the main effort amount to ‘spinning the wheels’ by sending standard notices and letters, undertaking searches, cold calling relatives and trying to find where the defendant lived. From 2011 to 2014 there were further desultory calls and a ‘dialler campaign’, but no attempt to put the knowledge of the defendant’s ownership of property to any productive use. 2015 saw a little more activity, but that was limited, again, largely to telephone calls and the field agents visits already mentioned.
In relation to the submission that it is necessary to give due consideration to the defendant’s obligation to pay the judgment debt, which he was required to do without any prompting because it is for the debtor to seek out the creditor and not vice versa, it is necessary to have regard to the uncontradicted evidence of the defendant that he did not know of the judgment, nor the credit card debt that led to it.[93] In those circumstances, it is of no present relevance that the defendant made no effort to pay the amount of the judgment.
[93]I note that there was no application by Credit Corp to cross-examine the defendant or Morena.
In my view, the reasons for the delay do not support the grant of leave. In the exercise of the discretion conferred by the Rules, I will on this ground alone refuse leave to Credit Corp to issue a warrant of execution to enforce the judgment.
Prejudice
Credit Corp submitted that except for broad and conclusionary statements, the defendant did not provide any specific evidence as to his current financial position. Notwithstanding the failure to provide such evidence, the indications are that he is better placed than many by reason of his good fortune in having won over a million dollars in Tattslotto in 2002.[94] In any event, other than the consequences which may potentially flow from any grant of leave to issue execution, there was no substantiated evidence of any relevant prejudice.
[94]Raymond’s second affidavit [5].
Credit Corp contended that because interest accrues on any judgment as a matter of law, it should not be characterised as relevant prejudice in relation to an application for leave to issue execution. In any event, the defendant has enjoyed the benefit of the judgment sum, and the accrual of interest was attributable to the defendant’s failure to have engaged with Credit Corp and sorted out an arrangement to pay the judgment.
In my view, financial hardship in consequence of execution of a judgment validly entered against the judgment debtor is not prejudice that is relevant to the exercise of the discretion. If that were so, most judgment debtors the subject of these applications would be successful in opposing the grant of leave. Usually the very reason for the application is the inability of the judgment debtor to pay the judgment otherwise than by entry into a periodic payment agreement or arrangement, or by selling their home. Commonly, the periodic payment arrangements fall into arrears and to enable the judgment creditor to issue execution against the debtor’s home an application under the rule must be made. The threat of execution often results in reinstatement of the periodic payments.
The incurring of interest over the period of the delay is another matter. As I have already noted, sub-section 5(4) of the LAA provides that an ‘action’ shall not be brought upon any judgment after the expiration of fifteen years from the date on which the judgment became enforceable. The word ‘action’ is defined in s 3 to includes any proceeding in a Court of law. Sub-section 5(7) of the LAA provides:
Save as otherwise expressly provided an action shall not be brought to recover any arrears of interest in respect of any sum of money whether payable in respect of a specialty, judgment, legacy, mortgage or otherwise, or any damages in respect of such arrears, after the expiration of six years after they became due.[95]
[95]The common law position is that if the right to recover the principal moneys is barred then, unless there is an express contract to pay interest independently of the principal, the right to recover interest is also barred: Hollis v Palmer (1836) 2 Bing NC 713; 132 ER 275; Cheang Thye Phin v Lam Kin Sang [1929] AC 670, 676-7; Skene v Cook [1901] 2 KB 7, 15; Elder v Northcott [1930] 2 Ch 422; Re Otway Coal Co Ltd [1953] VLR 557, 565; GE Dal Pont Law of Limitation , (LexisNexis Butterworths Australia 2016) [5.7]-[5.8].
The application for leave under r 68.02 of the Rules is a proceeding in a Court of law. But it is not, in terms, a proceeding for the recovery of ‘any arrears of interest in respect of any sum of money … payable in respect of a … judgment’. It is, however, a proceeding to issue execution which will enable the recovery of such interest. The present application may not be within the text of the limitation provision, but it does appear to be within the purpose or intent of the provision. There appears no reason why this provision should not apply to limit the recovery of interest pursuant to execution.
The question of the application of the LAA was not, however, argued before me and having regard to my finding that leave should not be granted to Credit Corp, I will take the matter no further.
Conclusion
The result of the above reasons is that the appeal by Credit Corp will be dismissed and the application for leave to issue execution will be refused. Notwithstanding that dismissal, however, many of the issues concerning the nature and validity of the assignment have been resolved in Credit Corp’s favour, in part because of the leave granted to rely on affidavits not relied on before the Judicial Registrar. The orders as to costs made by the Judicial Registrar should stand and in addition, to the extent that the defendant has incurred any legal costs of the appeal, Credit Corp will be ordered to pay them. However, I will hear the parties as to the costs of the proceeding.
Finally, it seems to me that the defendant is in need of a formally appointed guardian and/or administrator. There is power for the Court to refer the issue to the Victorian Civil and Administrative Tribunal under s 66 of the Guardianship andAdministration Act 1986 (Vic). This is a matter that will be discussed at the time of the making of formal orders.
2
22
0