Guy Michael West Harley v Mavis Mary Swanson No. SCGRG 95/837 Judgment No. 5112 Number of Pages 7 Judgments and Orders

[1995] SASC 5112

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA LEGOE AJ

CWDS
Judgments and orders - enforcement of judgments and orders - Enforcement of Judgments Act, s54 and 17 - stay of execution - Magistrates Court (Civil) Rules, Rule 81 - Payment into court of a sum of money by order of court on a hearing under the Enforcement of Judgments Act application - direction by court that the money paid into court be held by Registrar "to abide the event" - error of law in making this direction to Registrar - appeal allowed - order that money be paid out to the appellant. Enforcement of Judgments Act 1991s4 and s17 and Magistrates Court (Civil) Rules R81. Wagner v Laubscher Brothers and Co (1970) 2 QB 313; State Bank of Victoria v Parry and Ors (1989) WAR 240 and Amoco Australia Pty Ltd v Rocca Brothers Motor Engineering Pty Ltd (1972) 7 SASR 268, considered.

HRNG ADELAIDE, 30 May and 2 June 1995 #DATE 2:6:1995 #ADD 4:9:1995

Appellant:  In person

Counsel for respondent:     Mr M Clisby

Solicitors for respondent:    Mark Clisby

ORDER
Appeal allowed.

JUDGE1 LEGOE AJ This is an appeal brought pursuant to leave being granted by the Honourable Debelle J on 12 May this year. It is an appeal from an order of a Stipendiary Magistrate made on 31 March 1995. On 31 March the present appellant who is the plaintiff in the Magistrates Court proceeding applied for monies to be released which are presently held by the Registrar of the Magistrates Court in circumstances which I shall refer to shortly. The Magistrate made no order save that the application of the appellant for the payment out of the monies was adjourned to Friday 29 September this year at 10.00 a.m.

2. The relevant grounds of appeal for me to consider this morning, and I confine my reasons to these grounds, are, one, that the Magistrate was wrong in law in refusing the application for the payment out of the monies, namely, the sum of $10,551 which had been paid to the court by the defendant, and two which states that the Magistrate erred in the exercise of his discretion by refusing to discharge what is referred to in the grounds of appeal as the stay of execution of the judgment debt which had previously been granted by that Magistrate. Finally, the appellant complains that the Magistrate reserved the question of costs of the application and erred in law in further adjourning the matter for consideration in September of this year.

3. There is a long history behind this matter and I shall briefly summarise the relevant dates or the dates which I consider to be relevant for the determination of this appeal. They are as follows: On 29 March 1993 the appellant issued his summons in the Magistrates Court for the sum of $9,675 plus court fees and service fees for the claims made in the summons. That summons was served on the defendant, the respondent to this appeal, on 31 August 1993. On 6 October 1993 the appellant signed judgment for the amount claimed plus costs which amounted at that stage to $10,551.63. On 8 November 1993 the appellant issued a warrant for the sale of a property belonging to the respondent. The warrant was returned on 9 December 1993. The respondent made application for setting aside the judgment in December of 1993. On 17 December 1993 a Magistrate made an order that one, the judgment be set aside provided that the defendant do pay into court the sum of $8,000 within 21 days and two, the defendant be at liberty to file a defence to this action provided the sum of $8,000 has been paid into court in the action. Other consequential orders were made on that day and the trial was listed for hearing in February 1994. Although a proposed defence was exhibited to the affidavit of the respondent's solicitor, no defence was actually filed and the monies to be paid into court were not paid into court and consequently the judgment obtained on 6 October stood.

4. On 31 March 1994 the appellant made application under s.4 of the Enforcement of Judgments Act for investigation of the judgment debtor's financial position. On 14 April 1994 on the defendant's application to adjourn a witness summons which had been issued, the Magistrate made no order and on the same date on the hearing of the Enforcement of Judgments Act summons adjourned the matter until 22 April 1994. On 20 April 1994 the respondent made an application to set aside the warrant. There were then a number of applications in relation to the summons to witnesses relating to the respondent's assets which were adjourned to various dates. On 1 June 1994 the respondent issued and served a writ in the Supreme Court of Darwin which was endorsed inter alia claiming against the appellant damages arising from the defendant's negligence and/or breach of contract and/or breach of fiduciary duty in acting as a solicitor for the respondent in relation to a property transaction. The particulars briefly stating that the appellant failed and/or refused to act in accordance with instructions given to him by the respondent and secondly, failing to act in a manner consistent with ensuring the protection of the respondent's interest in relation to the proposed purchase and on sale of a certain property in Darwin between about August 1991 and September 1992.

5. On 3 June 1994 the matter came before the Magistrate again in relation to a number of matters in the course of which the Magistrate ordered that the injunction which had previously been ordered on 20 May 1994 was discharged; the defendant, that is the respondent, to pay the appellant's costs of the application which he fixed at $100.

6. Further, the application under the Enforcement of Judgments Act was adjourned for further hearing on 1 July 1994. The order then reads:
    "Order, defendant to pay to the registrar of court
    $10,551.60 on or before the 29th of June 1994. Amount to
    be held by registrar to abide the result of these
    proceedings."

7. It is in relation to the last part of this order that I am particularly concerned in this appeal. I am informed by counsel that Mr Clisby, counsel for the respondent this morning, who appeared for the respondent on 3 June 1994 before the Magistrate, says that he made an oral application for a stay of execution of the judgment pursuant to s.17 of the Enforcement of JudgmentsAct.

8. I accept that in the Magistrates Court an application may be made orally. However, the order that was made by the Magistrate on that day was an order which appears to be more consistent with the Magistrates Court (Civil) Rules, number 81, which relates to orders for security. That rule states that:
    "The court may order a party to pay a sum of money, or give
    other security to the Registrar in respect of the whole or
    part of the costs of the action, or the claim itself, and
    such sum or security 'will be held by the Registrar to abide
    the event'."

9. In my opinion, the actual order where the Magistrate stated that the amount was to be held by the Registrar to abide the result of these proceedings was totally inappropriate to an order which had apparently been sought by the respondent for a stay of execution of the judgment which had been entered on 6 October 1993. However, I shall proceed to determine this appeal on the basis that that order had the effect of staying execution of the judgment in view of the fact that the appellant had applied for the payment out of that sum.

10. On 1 July 1994 the appellant applied to have the monies paid out of court to him. That application was dismissed by the Magistrate. On the same date the Magistrate made an order that the application proper, whatever that may have been, and apparently it was some application by the respondent, be adjourned to Friday, 16 December 1994.

11. Be that as it may, when the matter came on again on 16 December 1994 the appellant made a further application to have the monies paid out to him and once again that application was refused. On that occasion the Magistrate gave certain extempore reasons in which he said:
    "This is the continued hearing in the matter of Guy Michael
    Harley v Mavis Mary Swanson. In brief, the plaintiff has a
    judgment against the defendant for a relatively substantial
    amount of money. An application has been made pursuant to
    the Enforcement of Judgments Act to examine the defendant as
    to her financial situation. The hearings in relation to
    that application have proceeded before me from time to time.
    Some months ago, upon becoming aware that the defendant in
    these proceedings had issued proceedings in the Supreme
    Court of the Northern Territory claiming damages for alleged
    negligence by the plaintiff, in these proceedings in and
    about the transaction, which is in a sense the basis upon
    which the plaintiff has charged and has obtained judgment, I
    made consequential orders that the defendant pay the amount
    in dispute in these proceedings to the Registrar of this
    court to be held by the Registrar to abide the event, and I
    adjourned the further hearing of the application to await
    the result of the proceedings in the Supreme Court of the
    Northern Territory.

I am told that a writ has been issued by the defendant in
    these proceedings and that an appearance has been filed by
    Law Claims, in essence, acting on behalf of the plaintiff in
    these proceedings. There was an application to strike out
    the writ apparently based on the alleged lack of
    jurisdiction of the Supreme Court of the Northern Territory
    who considered that matter. I am told that a master of the
    Supreme Court of the Northern Territory has delivered a
    written judgment dismissing that application. There has,
    however, been an appeal from that decision. I understand
    the matter has been argued before the Chief Justice of the
    Northern Territory Supreme Court and the parties are
    presently awaiting a judgment on that appeal.

Mr Harley today, in essence, seeks to have me release the
    funds which are presently held by the Registrar awaiting the
    result of the proceedings before me. He has referred to
    various authorities. The matter is discretionary. Whilst I
    appreciate in the normal course of events a plaintiff who
    has a judgment should be entitled to recover the monies
    owing to him or her, I think the circumstances of this case
    are somewhat different and allow me to exercise the
    discretionary powers and not to apply the normal rules. I
    appreciate the difficulty that that may cause to the
    plaintiff in these proceedings. All I can indicate is that
    the monies are held by the Registrar and should the
    plaintiff at the end of the day be successful, those monies
    will be released to the plaintiff."

12. The Magistrate then went on to say that he proposed to adjourn the matter further hoping that during the period there would be some resolution of the Northern Territory proceedings. He, therefore, adjourned it until 31 March 1995.

13. Leave to appeal from that decision was, in fact, granted to the appellant on that day but no appeal was lodged. On 31 March 1995 the matter came on again, once again the appellant applying for the monies to be released and the Magistrate made the order which I have referred to above.

14. The question which I have to decide is whether the Magistrate, if he had a discretion to order a stay on 3 June 1994, exercised that discretion in accordance with legal principle. In Wagner v Laubscher Brothers and Co (1970) 2 QB 313, the Court of Appeal in England found that there were no special reasons within the relevant English rule as to why the judgment which had been registered by the appellant in England in that case should not be enforced by execution. At p.317 Lord Denning put the matter succinctly at letters D to E, when he said:
    "If the plaintiffs had obtained an English judgment, we
    should not, for one moment, grant a stay simply because the
    defendants have brought a cross-claim in another action
    against the plaintiffs."

15. The law on this question has now been extensively reviewed by the Chief Justice of Western Australia in the State Bank of Victoria v Parry and Ors
(1989) WAR 240. In that case his Honour was considering a similar wording of the Western Australian rule to the English rule, namely, that there must be special circumstances established before the court will exercise its discretion to order a stay. The South Australian Act, s.17, reads:
    "(17) A party against whom a judgment has been given may
    apply to the court for a stay of execution, and the court
    may, if satisfied that there is a proper reason for granting
    the stay, grant the stay on such terms as it considers
    appropriate."

16. Although the wording is slightly different, I cannot see that the legal principles are any different.

17. In footnote 14, 215.5 in Lunn's Civil Procedure South Australia on p.51,641, the learned author says, in relation to stays pending an appeal, which is a common situation for the application of s.17, that there must be exceptional circumstances to justify such a stay, and reference is made to Amoco Australia Pty Ltd v Rocca Brothers Motor Engineering Pty Ltd (1972) 7 SASR 268 to 325.

18. This is not, however, a case of a stay pending an appeal. Nor is it a stay of a warrant on the grounds of hardship. Nor is it a stay pending third party proceedings such as arose in State Bank of Victoria v Parry (supra).

19. In footnote 14,215.25 of Lunn (supra) under the heading "Other cases for Stays", it refers to the fact that stays may be granted where execution is taken out contrary to an agreement (which is not this case) to prevent an abuse of the process of the court (which is not this case) or where a judgment creditor cannot be found (once again that is not this case).

20. The criteria for granting a stay are clear, namely, that the starting point should be that a party holding a judgment should be entitled to enforce it as it wishes: see State Bank of Victoria v Parry (supra) where Malcolm CJ said at 244:
    "The discretion to grant a stay can only be exercised if the
    court is satisfied that 'by reason of special circumstances
    it is inexpedient to enforce the judgment'."

21. The Magistrate appeared to acknowledge this in his ex tempore reasons published in December 1994 which I have referred to above.

22. His Honour goes on to say that the inherent jurisdiction of the court requires the discretion to be exercised on grounds which are relevant to a stay of enforcement proceedings rather than on grounds which may bear upon the validity or correctness of the judgment. This is very relevant here because it must follow that unless there are proper reasons, to use the words of s.17, established by the party seeking this stay, then the party holding the judgment is entitled to enforce it in this case by ordering the payment out of the money.

23. Malcolm CJ goes on to state quite clearly at 244, line 39:
    "The starting point must be that a plaintiff who has
    obtained a money judgment is, on the face of it, entitled to
    proceed to execution without delay."

24. In that case Malcolm CJ was concerned with an issue as to whether the defendant who claimed to have a right to an indemnity from a third party was entitled to a stay or a partial stay by reason of the indemnity claims. After an exhausting review of the authorities and of the particular facts of that case, the Chief Justice concluded that an order for a partial stay should be made.

25. In this case the only possible ground upon which the discretion could properly have been exercised is whether the claims of the respondent, whatever they may have been, were so closely related to the judgment which had been obtained in these proceedings that it justified proper reasons for ordering a stay. The only ground which is suggested is that in some vague way the respondent has made a claim for damages for professional negligence, to use a collective term, against the appellant in the Darwin proceedings which have since been transferred to the Supreme Court here in Adelaide. There is no defence filed in these proceedings. The matter proceeded to judgment by way of default and although an order was made to set aside that judgment, it was never set aside and no further application has been made in that regard, although there have been countless other applications which I have briefly mentioned above.

26. In this regard, it is pertinent to look once again to the judgment of Malcolm CJ in State Bank of Victoria v Parry (supra) at 246 where his Honour was talking about an unconnected cross-action when he said:
    "In general, therefore, a counterclaim which is in effect an
    unconnected cross-action will not provide a basis for a stay
under order 14, rule 3 (the equivalent to s.17 of the Act in
    this state). Consistently with this position a stay of
    execution of a judgment will not ordinarily be granted
    simply because the defendants bring a cross-claim in another
    action against the plaintiff, in the absence of special
    circumstances rendering it inexpedient to enforce the
    judgment." See Wagner v Laubscher Brothers and Co (supra).
    In that case, which Sachs LJ described as 'a particularly
    clear case', the considerations which applied are of no
    relevance."

27. In my opinion, from the file in these proceedings which I have perused for the purpose of understanding the arguments of counsel put to me this morning, I can see no basis upon which the Magistrate could have properly exercised his discretion to make the order which he did in effect directing the registrar to hold the monies 'to abide the event'. If that was an order for a stay of execution, which I do not believe it was, then I am satisfied that the Magistrate erred in law in exercising his discretion in that way. I can see no basis upon which he could properly refuse the appellant's application which he heard on 31 March 1995 refusing the payment out of the $10,551.

28. For these reasons, I allow the appeal. I set aside that part of the order of the Magistrate directing the Registrar to hold the monies, namely the $10,551, to abide the event, and I order that the monies standing in the Magistrates Court (Civil Division) to the credit of action number 4682/1993 in an account entitled "Number 4682/1993, Guy Michael West Harley v Mavis Mary Swanson", together with all interest accrued thereon to the date of payment out be paid out of court to the appellant. Then the order I will make is that the respondent do pay to the appellant (a solicitor of this court appearing in person) his costs of and incidental to the application for leave to appeal and of the three hearings of the appeal before me, which costs are to be taxed.