Grounded Construction Group Pty Ltd v Easy Stay Mining Accommodation Pty Ltd
[2019] WADC 153
•14 NOVEMBER 2019
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: GROUNDED CONSTRUCTION GROUP PTY LTD -v- EASY STAY MINING ACCOMMODATION PTY LTD [2019] WADC 153
CORAM: DEPUTY REGISTRAR HARMAN
HEARD: 6 SEPTEMBER 2019
DELIVERED : 14 NOVEMBER 2019
FILE NO/S: CIVO 152 of 2017
BETWEEN: GROUNDED CONSTRUCTION GROUP PTY LTD
Judgment Creditor
AND
EASY STAY MINING ACCOMMODATION PTY LTD
Judgment Debtor
AND
MT MORGANS WA MINING PTY LTD
Third Person
AND
OCS INTERNATIONAL PTY LTD
FILE NO/S: CIVO 153 of 2017
BETWEEN: GROUNDED CONSTRUCTION GROUP PTY LTD
Judgment Creditor
AND
EASY STAY MINING ACCOMMODATION PTY LTD
Judgment Debtor
MT MORGANS WA MINING PTY LTD
Third Person
AND
OCS INTERNATIONAL PTY LTD
FILE NO/S: CIVO 154 of 2017
BETWEEN: GROUNDED CONSTRUCTION GROUP PTY LTD
Judgment Creditor
AND
EASY STAY MINING ACCOMMODATION PTY LTD
Judgment Debtor
AND
MOUNT MORGAN WA MINING PTY LTD
Third Person
AND
OCS INTERNATIONAL PTY LTD
FILE NO/S: CIVO 155 of 2017
BETWEEN: GROUNDED CONSTRUCTION GROUP PTY LTD
Judgment Creditor
AND
EASY STAY MINING ACCOMMODATION PTY LTD
Judgment Debtor
AND
MT MORGANS WA MINING PTY LTD
Third Person
AND
OCS INTERNATIONAL PTY LTD
FILE NO/S: CIVO 183 of 2017
BETWEEN: GROUNDED CONSTRUCTION GROUP PTY LTD
Judgment Creditor
AND
EASY STAY MINING ACCOMMODATION PTY LTD
Judgment Debtor
AND
MT MORGANS WA MINING PTY LTD
Third Person
AND
OCS INTERNATIONAL PTY LTD
Catchwords:
Civil Judgments Enforcement Act s 55 - Applications of judgment debtor and OCS International Pty Ltd for allowance of objections - Civil Judgments Enforcement Act s 103 - Application of third person for cancellation of court ordered trust, debt appropriation order and judgment - Each application turns on its facts
Legislation:
Civil Judgments Enforcement Act 2004
Result:
Application of the judgment debtor is dismissed
Application of OCS International Pty Ltd is dismissed
Application of the third person is dismissed
Representation:
CIVO 152 of 2017
Counsel:
| Judgment Creditor | : | Mr C P K Russell |
| Judgment Debtor | : | Mr J Doyle |
| Third Person | : | Mr J Ludlow |
| OCS International Pty Ltd | : | Mr J Doyle |
Solicitors:
| Judgment Creditor | : | Zafra Legal |
| Judgment Debtor | : | Doyles Construction Lawyers |
| Third Person | : | HWL Ebsworth Lawyers |
| OCS International Pty Ltd | : | Doyles Construction Lawyers |
CIVO 153 of 2017
Counsel:
| Judgment Creditor | : | Mr C P K Russell |
| Judgment Debtor | : | Mr J Doyle |
| Third Person | : | Mr J Ludlow |
| OCS International Pty Ltd | : | Mr J Doyle |
Solicitors:
| Judgment Creditor | : | Zafra Legal |
| Judgment Debtor | : | Doyles Construction Lawyers |
| Third Person | : | HWL Ebsworth Lawyers |
| OCS International Pty Ltd | : | Doyles Construction Lawyers |
CIVO 154 of 2017
Counsel:
| Judgment Creditor | : | Mr C P K Russell |
| Judgment Debtor | : | Mr J Doyle |
| Third Person | : | Mr J Ludlow |
| OCS International Pty Ltd | : | Mr J Doyle |
Solicitors:
| Judgment Creditor | : | Zafra Legal |
| Judgment Debtor | : | Doyles Construction Lawyers |
| Third Person | : | HWL Ebsworth Lawyers |
| OCS International Pty Ltd | : | Doyles Construction Lawyers |
CIVO 155 of 2017
Counsel:
| Judgment Creditor | : | Mr C P K Russell |
| Judgment Debtor | : | Mr J Doyle |
| Third Person | : | Mr J Ludlow |
| OCS International Pty Ltd | : | Mr J Doyle |
Solicitors:
| Judgment Creditor | : | Zafra Legal |
| Judgment Debtor | : | Doyles Construction Lawyers |
| Third Person | : | HWL Ebsworth Lawyers |
| OCS International Pty Ltd | : | Doyles Construction Lawyers |
CIVO 183 of 2017
Counsel:
| Judgment Creditor | : | Mr C P K Russell |
| Judgment Debtor | : | Mr J Doyle |
| Third Person | : | Mr J Ludlow |
| OCS International Pty Ltd | : | Mr J Doyle |
Solicitors:
| Judgment Creditor | : | Zafra Legal |
| Judgment Debtor | : | Doyles Construction Lawyers |
| Third Person | : | HWL Ebsworth Lawyers |
| OCS International Pty Ltd | : | Doyles Construction Lawyers |
Case(s) referred to in decision(s):
Nil
DEPUTY REGISTRAR HARMAN:
CIVO 152 OF 2017
The judgment creditor and judgment debtor were each established as such upon registration of an adjudication made under the Construction Contracts Act 2004 (WA).
On 24 October 2017 under the Civil Judgments Enforcement Act 2004 (WA) (the Act) the court issued a debt appropriation order to the third person.
On 30 October 2017 both the judgment debtor and a party that I take to have been OCS International Pty Ltd each applied to suspend enforcement of the judgment. I take it that support for each application had been provided by the affidavit of Carolyn Mallon sworn 28 October 2017. She deposes to action that had been undertaken in the Supreme Court of Western Australia to review a series of prior similar adjudications in favour of the judgment creditor adverse to the judgment debtor. She deposes that the adjudication was then the subject of judicial review and she produces documents that relate to the contended charge in favour of OCS International Pty Ltd over the appropriated debt.
Each application was before the court on 31 October 2017. Each party that I have specified was then present. According to the evidence of Dominique Wong of 1 July 2019 the result of the hearing was as follows:
(The following quote is reproduced with original typographical errors)
(1)Interim suspension order in of judgment and debt appropriation order from 4:00pm Thursday 2 November 2017 to 4:00pm 21 November 2017.
(2)By 4:00pm Tuesday 2 November 2017 Mount Morgan WA Mining Pty Ltd (third person) pay the appropriated debt ($495,454.64) less deductible expense, into a bank suspense account of its choosing to be held in trust until further order of this court.
(3)The application adjourned for directions before a judge on the 17 November 2017 at 10:30am.
(4)Cost be reserved.
The evidence is consistent with the terms of what I take to be the fiat of the court recorded by reference to the application of the judgment debtor. The order has not been extracted.
By letter dated 2 November 2017 notice of an objection of the third person was given by the principal registrar to each of the judgment creditor, the judgment debtor and OCS International Pty Ltd. The notice specifies the existence a charge over the appropriated debt in favour of OCS International Pty Ltd and the intention of the judgment debtor to seek review of the adjudication in the Supreme Court of Western Australia.
On 15 November 2017 the judgment debtor applied for an order that the objection be allowed and further that the debt appropriation order be cancelled, stayed, suspended or amended.
On 22 November 2017 an application in the same terms was issued; I take it by OCS International Pty Ltd.
On 17 November 2017 the order of 31 October 2017 was extended until further order.
I am not informed of any activity undertaken in relation to either application prior to 8 August 2019 other than of process that relates to the listing of a series of hearings and the vacation of each of those hearings. On each occasion the subject of the hearing is not identified.
By an application dated 2 July 2019 one of or both the judgment debtor and OCS International Pty Ltd had applied for removal and substitution of the trustee. The application was listed for hearing on 8 August 2019. I understand that the applicant(s) did not then proceed with the application, rather the judgment creditor, judgment debtor and OCS International Pty Ltd proposed that an order be made to distribute the fund held by the third person in equal shares between the judgment creditor and the judgment debtor.
The third person was given the opportunity to consider its position and to present evidence in opposition to the proposal. The hearing was adjourned to 6 September 2019.
On 22 August 2019 the third person applied for an order under s 103 of the Act that both the debt appropriation order and par 2 of the order of 31 October 2017 be cancelled and that the action be dismissed.
On 6 September 2019 each of the judgment creditor, the judgment debtor, the third person and OCS International Pty Ltd were heard on the application of the third person. All but the third person then sought to implement the distribution agreement, although in the alternative the judgment creditor sought an order for what I took to be half of the fund regardless the result in relation to the balance. At the conclusion of the hearing I reserved my decision.
According to s 15(1) of the Act it is only a 'person against whom a judgment has been given' that may apply for an order suspending enforcement of a judgment. The Act provides no scope for any person other than a judgment debtor to so apply. Accordingly, the application of OCS International Pty Ltd that had been before the court on 31 October 2017 had been made absent any entitlement. It is open to consider that the order made on 30 October 2017 was the result of hearing the application of the judgment debtor.
Section 55 of the Act constructs scope for both a judgment debtor and a party named in the objection of a third person to apply for an order that the objection be allowed. The judgment creditor has a period of seven days from receipt of notice of the objection within which to communicate its acceptance of the objection. The period within which an objector may apply is within seven days following failure by the judgment creditor to so communicate.
Prior to the hearing on 31 October 2017 each of the judgment debtor and OCS International Pty Ltd had filed a memorandum of appearance. According to each notice each address for service is the office of the same solicitors. The notice given by the principal registrar on 2 November 2017 was sent to both the judgment debtor and OCS International Pty Ltd at that address.
Having issued on 15 November 2017, the application of the judgment debtor was made at or about the limit of the period for bringing an application under s 55. The application of ICS International Pty Ltd filed on 22 November 2017 could not have been brought within time. The Act does not provide jurisdiction to extend time to apply.
The question of the entitlement of OCS International Pty Ltd to so apply was not raised by any party at the hearing on 6 September 2019, be that as it may I am satisfied that it is clear that the application of OCS International Pty Ltd of 22 November 2017 has no statutory basis.
Turning to the application of the judgment debtor of 15 November 2017, in putting the basis for allowance of the objection it specifies that the application is made by OCS International Pty Ltd. I expect that detail reveals an unhappy lack of attention in the process of applying. It also highlights a fundamental problem presented by one of the two grounds upon which the applicant relies.
In seeking allowance of the objection by reference to the interest claimed by OCS International Pty Ltd the judgment debtor would establish the interest of OCS International Pty Ltd in the appropriated debt and promote that interest over that of the judgment creditor under the judgment. I am satisfied that it is not open to the judgment debtor to put the case of some other party to the end of establishing the ground for its objection.
The other ground of the application is expressed along the lines that the debt appropriation order be stayed suspended or amended to await the determination of the Supreme Court in action CIV 2271 of 2017. In the application the judgment debtor refers to that action as a proceeding by which the judgment debtor had applied to have adjudications under the Construction Contracts Act 2004 set aside.
There is no evidence that the adjudication was either part of the case of the judgment debtor in Supreme Court Action 2271 of 2017 or that a determination in that action would have some bearing upon some feature of the judgment, alternatively the debt appropriation order, alternatively the application.
In the result the application of the judgment debtor of 15 November 2017 is revealed as putting no substantive case for allowance of an objection. The application is not within the scope of s 55 of the Act. The time for bringing such an application under the notice of objection of the third person has expired.
The issues that I have canvassed in addressing the application of the judgment debtor were not raised by any party at the hearing on 6 September 2019, be that as it may I am satisfied that it is clear that the application of the judgment debtor of 15 November 2017 does not convey a case within the scope of s 55 of the Act.
The proposal put on 6 September 2019 was on the basis that distribution of the fund would dispense with the proceeding. The reality is that no proceeding has been commenced.
If it is considered that any conclusion that I have reached is incorrect I will add that according to s 55, on the hearing of an application brought under that provision the court may allow or reject the objection. Whilst usually a court would not require parties to litigation to proceed to a determination in the event that they had quietened their disagreement, not only does the Act clearly express the only course opened upon an application for allowance of an objection, there is good reason to consider that the legislature intended that an objection put against a debt appropriation order would be disposed of by a transparent process on its merits.
By 31 October 2017 the third person had in part complied with its obligation under the debt appropriation order and I am satisfied that it had then conveyed both its intention to comply with the balance of its obligations and its willingness to undertake the role of trustee of the fund. The obligations of the third person to the judgment debtor suspended under the order of 31 October 2017 have been overtaken by the third person having established and funded the account of which it now stands as trustee. Thereby it has been divested of its beneficial interest in the appropriated debt. It awaits an order for payment of those funds to a beneficiary. In effect the third person has been relieved of any outstanding obligation under the debt appropriation order and its role as third person under the debt appropriation order has ceased. The remaining role of the third person is as trustee.
I am satisfied that in terminating the trust the court would not then lift the suspension of the debt appropriation order but rather would order the trustee to pay the fund to the beneficiary.
By its application now before the court it would have both the debt appropriation order and paragraph 2 of the order of 31 October 2017 cancelled and the action be dismissed. That application is supported by evidence of James Peter Howard sworn 21 August 2019. He deposes that the third person now has the benefit of an adjudication under the Construction Contracts Act against the judgment debtor and upon registration of the adjudication in the Supreme Court of Western Australia on 19 August 2019, is now also a judgment creditor of the judgment debtor.
The fundamental difficulty with the proposal of the third person is that the purpose in establishing the fund was to secure the interest of a prospective beneficiary. It is safe to consider that s 55 of the Act would dictate that upon allowance of any objection the beneficiary would be the objector, otherwise it would be the judgment creditor. Until a determination is made under s 55 in relation to each objection the purpose for which the trust was established remains. The application would defeat the purpose of the court in making the order of 31 October 2017.
I will address each of the submissions that the third person puts in support of its application.
Firstly, it contends that the judgment debt has been extinguished by the agreement between the judgment creditor, the judgment debtor and OCS International Pty Ltd under which the distribution of the fund they propose is put.
The only evidence of the agreement is provided by the affidavits of Craig Laverick sworn 28 August 2019 and Dominique Wong sworn 3 September 2019. That of Wong is no more than that the judgment creditor, the judgment debtor and OCS International Pty Ltd have settled the matter. The evidence of Laverick is that the judgment debtor, judgment creditor and OSC International Pty Ltd have resolved all disputes between them and have agreed on the distribution of the trust fund.
Both Laverick and Wong depose on behalf of the judgment debtor and OCS International Pty Ltd. There is nothing to suggest that either of them has any relationship with the judgment creditor.
The context in which the evidence is given suggests no more than that the judgment debtor and OCS International Pty Ltd no longer pursue any application for allowance of the objection that had been raised by the third person. For the agreement to be taken to extinguish the entitlement to payment of the judgment debt would involve drawing an inference adverse to the judgment creditor as a consequence of its failure to bring evidence. Nothing emerges from the context that I have canvassed in these reasons to establish grounds to draw that inference.
The second proposition advanced by the third person is that if the judgment debt in its favour was set off against the judgment debt upon which the debt appropriation order was founded, the latter would be extinguished.
The evidence of James Peter Howard in his affidavit of 21 August 2019 establishes that an adjudication in favour of the third person against the judgment debtor made on 21 July 2019 under the Construction Contracts Act has been registered in the Supreme Court of Western Australia.
Had that adjudication issued by the date of service of the debt appropriation order on the third person and been raised by it in the form of an objection, it could have availed itself of the opportunity provided under s 55 to apply in the event that the judgment debtor did not communicate acceptance of the objection within the time specified.
I am satisfied that it was not intended that s 103 of the Act would permit an applicant to avoid the constraints imposed under s 54 and s 55 of the Act. As I have already stated, the Act does not provide for an extension of time to object.
To that I would add that although the third person has been established as a judgment creditor of the judgment debtor there is no evidence that any feature of the adjudication upon which it was founded engages with the context that pertained upon service of the debt appropriation order on the third person.
In my opinion the second submission of the third person has no merit.
The third submission of the third person is that the Act does not provide jurisdiction to order payment in favour of a judgment debtor.
In putting that proposition the third person overlooks the fact that the trust was created by the court to await the outcome of any recourse to the statutory process of objection. Had the judgment debtor been successful in its objection then clearly it would also have been entitled to an order for disbursement from the trust.
In rejecting the submissions of the third person I will add that although the third person does not expressly apply in relation to the judgment, it applies to dismiss the action. I take it that the action to which it refers is the matter constituted initially by registration of the judgment. The Act does not provide scope for anyone other than a party to a judgment to apply in relation to a judgment.
As for the debt appropriation order I will add that any outstanding obligation of the third person has been overtaken by the order of 31 October 2017. Any issue now put against the force or effect of the debt appropriation order has been rendered moot.
The reasons that I have given in this proceeding apply equally to CIVO 153, CIVO 154, CIVO 155 and CIVO 183 of 2017. Having said that, I note that it is patent that not all of those proceedings embrace the same number of filed documents. Obviously documents have been filed in one proceeding but not in others. Be that as it may, I am confident that from the prospective of the judgment creditor, the judgement debtor, the third person and OCS International Pty Ltd I have dealt with the substantive and procedural issues in each that were addressed by the parties.
The only conclusion open upon consideration of the applications of each of the parties is that that of the third person be dismissed; those of each of the judgment debtor and OCS International Pty Ltd be dismissed; and accordingly that an order be made for payment of the trust fund by the third person to the judgment creditor.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
LF
Court Officer13 NOVEMBER 2019
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