E.L. and C Baillieu Stockbroking Ltd v Adicho (Ruling)
[2010] VCC 1143
•19 August 2010 (Revised)
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL – GENERAL DIVISION
APPLICATIONS
Case No. CI-08-04446
| E.L. & C. BAILLIEU STOCKBROKING LTD | Plaintiff |
| (ABN 74 006 519 393) | |
| v | |
| JOHN ADICHO | Defendant |
---
| JUDGE: | His Honour Judge Misso |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 19 August 2010 |
| DATE OF RULING: | 19 August 2010 (Revised) |
| CASE MAY BE CITED AS: | E.L. & C Baillieu Stockbroking Ltd v Adicho (Ruling) |
| MEDIUM NEUTRAL CITATION: | [2010] VCC 1143 |
| First Revision 26 August 2010 |
RULING
---
Catchwords: Judgment Debt Recovery Act 1984 – order made by the Registrar refusing to make an instalment order – notice of objection – de novo hearing – whether such an order should be made.
---
| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr E Moon | Pearce Webster Dugdales |
| For the Defendant | Mr G Rice | John Curtain & Associates Pty |
| HIS HONOUR: |
Background
1 The plaintiff is a firm of stockbrokers. The defendant was a client of the plaintiff.
2 The plaintiff was retained by the defendant to act as his stockbroker. He placed orders for the purchase of shares amounting to $232,330.19. He failed to pay the purchase price for the shares. The plaintiff became responsible to pay for the shares.
3 The plaintiff applied for judgment against the defendant. The plaintiff's application was granted on 5 February 2009 for $232,321.18 with interest of $14,633.08, making a total judgment sum plus costs of $246,954.26.
4 The defendant made an application by Summons dated 2 December 2009 to set aside the order for judgment. It was heard on 17 December 2009. The Summons was dismissed.
5 The plaintiff issued a Warrant of Seizure and Sale on 9 October 2009[1] to the Sheriff to levy on the property of the defendant in execution of the judgment.
[1] The date stamp applied by an officer of the Court on the Warrant is "9 Oct 2008" which is obviously an error because the document itself is dated 7 October 2009
6 The defendant made an application to the Registrar of the County Court for an order that he be permitted to pay the judgment by instalments. The application was refused. The Registrar made an order in those terms on 22 July 2010.
7 The defendant filed and served a Notice of Hearing of Objection to an Instalment Order dated 2 August 2010 applying for a re-hearing of the application initially made to the Registrar.
8 The defendant relied upon the following material:
• his application to the Registrar dated 5 July 2010. • an affidavit sworn by the defendant on 5 July 2010. • an affidavit sworn by the defendant on 10 August 2010. 9 The plaintiff relied upon the following material:
• an affidavit sworn by Bradley David Cunningham on 21 July 2010. • an affidavit sworn by Ian Johnston on 21 July 2010.
The Legislative Scheme
10 After judgment has been given, the judgment debtor may apply to the proper officer of the Court, in this case the Registrar, for an instalment order pursuant to section 6(1)(a) of the Judgment Debt Recovery Act 1984 (“the Act”).
11 If the proper officer of the Court refuses to make such an order then, pursuant to subsection (5), the judgment debtor may file a notice of objection which then requires the proper officer to set the matter down for hearing by the Court.
12 Subsection (7)(a)(i)-(ii) provides that the Court may make such an order or refuse to make such an order or confirm, vary or cancel an order. The hearing by the Court amounts to a de novo hearing.
The Defendant’s Case
13 Section 6(2)(c) requires the defendant to specify the amount of each instalment proposed to be paid and the times at which such instalments are proposed to be paid.
14 In his application to the Registrar, and in the supporting affidavit to the application sworn 5 July 2010, the defendant proposed to make an immediate payment of $20,000 and instalments of $6,250 per month, commencing on 31 August 2010 and monthly thereafter.
15 Mr Rice submitted that payments of that order would see the debt to the plaintiff extinguished in four years and eight months’ time.
16 Mr Rice submitted and that the matters deposed to by the defendant in his affidavits sworn 5 July 2010 and 10 August 2010 demonstrated that if execution proceeds it will have a dramatic and negative effect upon his financial position.
17 Mr Moon submitted that I should not accept the submissions made on behalf of the defendant nor the affidavit material upon which he relies. He submitted that the following facts disclose a very different picture:
• that judgment was entered on 5 February 2009 in favour of the plaintiff. • The defendant did nothing to extinguish any part of the debt in between that time and the time when he made his application to set aside the judgment in December 2009. • When that application was refused, the defendant then did nothing to extinguish any part of the debt. • The application for an instalment order was only made after action was taken by the Sheriff pursuant to the Warrant. • The defendant's affidavit sworn 5 July 2010 demonstrates that he has had the capacity to extinguish the judgment debt, but has consciously made the decision not to. 18 In his affidavit sworn 5 July 2010, the defendant described his financial position as follows:
• average pre-tax earnings for the preceding twelve months of $225,000. •
rental income of $14,000 from a property at 32 Almands Avenue, Roxburgh Park.
• the Almands Avenue property has a net equity of $155,000. • vacant land at 15 Ballarat Court, Craigieburn has a net value of $70,000. • a bank balance of $25,000. • shares valued at approximately $100,000. 19 The total of the foregoing is $350,000 before taking into account other property, such as, the value in his business, furniture and household and personal effects and his motor vehicle. I have ignored each of these assets because the estimates, in my experience, tend to be difficult to establish and are often estimates which are very woolly.
20 The foregoing also does not take into account the net income after payment of taxation which the plaintiff has received and will receive from his business undertakings as a financial consultant.
21 The second affidavit sworn by the defendant on 10 August 2010 does not really advance his case very much. In that affidavit, the defendant sought to encourage the Court to make an instalment order:
•
by impugning the integrity of the Sheriff in the manner in which the Sheriff undertakes the sale of assets: paragraphs 4-5.
•
his belief that payment of the judgment debt over four years and eight months is reasonable: paragraph 6.
•
a proposal to commence a proceeding against a party against whom he believes he will be successful, and from which he would apply the fruits of that success against the judgment debt: paragraphs 9-13.
•
an assertion that he is “lawfully entitled” to obtain an instalment order and that it “should be granted” allegedly based upon legal advice. As an aside, an affidavit is intended to be the repository of evidence not assertions nor submissions, which is what those statements amount to. The statements are offensive, however, I have ignored them for the purpose of distilling from the affidavit what amounts to evidence in determining the defendant's application: paragraph 14.
•
an assertion that the sale of his two properties would not result in a quicker payment of the judgment debt as opposed to payment by an instalment order. The judgment debt is for $246,954.26. According to the plaintiff's first affidavit, the net equity from those two properties amounts to approximately $225,000 before taking into account the sum of the bank deposit, the approximate value of his shareholding, and his receipt of income from his business undertaking: paragraph 16.
The Objects of the Act
22 The provisions of the Act, which I have referred to above, serve the purpose of permitting a judgment debtor to pay a judgment by instalments to be judged in the discretion of the Court.
23 There are no provisions in the Act which demonstrate what the relevant considerations are in the exercise of that discretion. Therefore, I consider that the relevant considerations are to be determined on a case-by-case basis.
24 It cannot be the case that the position of the judgment debtor should be elevated to being superior to that of the judgment creditor by simply providing a mechanism for a judgment debtor to pay the judgment debt on terms suitable to the judgment debtor and to the prejudice of the judgment creditor.
25 I think that the primary consideration in the exercise of the discretion is to determine whether the judgment creditor ought to be deprived of the immediate right to the fruits of the judgment by permitting the judgment debtor to pay the judgment debt in some way other than in whole.
26 I think that must require the defendant to establish more than the financial hardship flowing from having his properties and assets sold and called in and collected by the Sheriff.
27 If that were the primary or only consideration, then any judgment debtor would be entitled to an instalment order even where the sale of assets would realise sufficient to extinguish the judgment debt.
28 In this case, what the defendant is really arguing is that he does not want to be deprived of his properties, bank deposit and shareholding.
29 The defendant did not suggest that he would not be able to find an alternative residence and to otherwise provide for himself in most respects.
30 I consider the defendant’s reference to the possibility of being made bankrupt if an instalment order is not made to be far-fetched and without any real foundation.
Disposition
31 For the reasons set out above, I do not consider that the relevant provisions of the Act were designed to permit someone in the financial position of the defendant to gain the benefit of paying a judgment debt by an instalment order.
32 Therefore, I refuse the application.
33 With the agreement of Mr Moon and Mr Rice, I will publish these reasons by delivering the same to each of them and will reserve liberty to apply should there be any other application which either of them wishes to make on behalf of their clients. I will reserve that liberty to apply until 4.00 pm on 27 August 2010.
- - -
0
0