Impedovo v Nolan (No 2)
[2017] ACTSC 146
•26 June 2017
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Impedovo v Nolan (No 2) |
Citation: | [2017] ACTSC 146 |
Hearing Date(s): | 27 April 2017 |
DecisionDate: | 26 June 2017 |
Before: | Robinson AJ |
Decision: | See [36] below. |
Catchwords: | APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – Enforcement of debt – seizure and sale order in place in favour of judgment creditors – application by the judgment creditors to amend existing seizure and sale order – whether costs can be added to existing order PROCEDURE – Supreme Court procedure – Court’s power to amend seizure and sale orders - Court’s inherent power to dispense with the rules of procedure |
Legislation Cited: | Court Procedures Rules 2006 (ACT) rr 502(5); 2013; 2051; 2052; 2054 – 2057; 2201; 2213 |
Cases Cited: | Hunter v Chief Constable of the Western Midlands Police [1982] A.C. 529 |
Texts Cited: | Keith Mason, ‘Inherent Jurisdiction of the Court’ (1983) 57 Australian Law Journal 449 |
Parties: | Antonio Impedovo (First Enforcement Creditor) Eva Barbara Impedovo (Second Enforcement Creditor) Jonathan Peter Nolan (First Enforcement Debtor) Mary Maria Gabriel Vidovic (Second Enforcement Debtor) |
Representation: | Counsel Ms A Irving (Enforcement Creditors) Self-represented (First Enforcement Debtor); Mr Nolan, by leave (Second Enforcement Debtor) |
| Solicitors Trinity Law (Enforcement Creditors) Self-represented (Enforcement Debtors) | |
File Number(s): | SC 471 of 2014 |
ROBINSON AJ:
Background
The first and second enforcement creditors, whom I will refer to as the judgement creditors, obtained a judgement in the sum of $122,991.03 in the South Australian Magistrates Court on 23 September 2014.
The judgement was given by consent.
The judgement was registered in the ACT Supreme Court on 21 October 2014.
A certificate of Enforceable Order and accompanying documents were served upon the first and second enforcement debtors, whom I will refer to as the judgement debtors, on 4 November 2014.
There have been many applications brought by the judgement debtors in connection with the attempts to enforce the judgement debt. The judgement creditors, as well, have thought it necessary to file their own applications ancillary to the enforcement of the judgement. As an inevitable consequence, further legal costs have been incurred on each side and interest has, of course, continued to run.
Only relatively small, partial payments have been made by the judgment debtors since 2014.
The controversies between the parties eventually worked themselves up to the Supreme Court. A chronology of events is set out in the affidavit of Maurice Falcetta sworn 17 February 2017.
The decision in Impedovo v Nolan [2016] ACTSC 386 where Penfold J. gave judgement on 23 December 2016 is of significance. The orders made by Her Honour were:
1.The appeal from the registrar is dismissed (noting that the dismissal has the effect of not only confirming the registrar’s refusal to grant an instalment order, but also confirming the registrar’s costs order).
2.The Court Procedures Rules 2006 (ACT) are dispensed with to the extent necessary to allow me to deal with Mr Nolan’s effective amendment of the orders that he sought on appeal and to allow me to deal with the oral applications made in court by the creditors’ solicitors to amend the seizure and sale order as to duration and as to the property affected.
3.The seizure and sale order made on 15 December 2014 and renewed on 8 December 2015 is extended until 14 December 2017.
4.The seizure and sale order as renewed on 8 December 2015, and as extended by Order 3 until 14 December 2017, is amended to permit the enforcement officer to seize and sell, in satisfaction of the order debt first, the real and personal property (other than exempt property), being:
Unit [xx], Block [xx], Section [xxx] on Deposited Plan 7365 in the suburb of Isabella Plains (also known as Unit [xx] of [xx] Cromwell Circuit, Isabella Plains, ACT 2905); and
the property already covered by the seizure and sale order, being Unit [xx], Block [xx], Section [xx] on Deposited Plan 8455 in the suburb of Griffith (also known as Unit [xx] of [xx] McMillan Crescent, Griffith, ACT 2617).
5.The stay order made by Refshauge J on 29 March 2016 is lifted with effect from today (3 November 2016).
6.The appellants (debtors) are to pay the respondents’ (creditors’) costs of the appeal to the Supreme Court.
7.There are to be no dealings with either of the properties specified in Order 4 until the expiration of seven days from the day on which a sealed copy of these orders is made available to the parties.
There was no appeal from that decision and it provides a convenient background to the events in question. This judgment should be read with that decision.
Further Disputation
Since that decision, the proceedings have come before Burns J on 27 January 2017, Walmsley AJ on 24 February 2017 and 3 March 2017 and then Ashford AJ on 17 March 2017.
Two matters of significance should be recorded arising out of these later appearances. First, Acting Justice Walmsley made a costs order by consent in the sum of $44,621.61 on 24 February 2017 against the judgment debtors. Second, Acting Justice Walmsley made a further costs order by consent in the sum of $20,262.76 on 3 March 2017.
Also on 3 March 2017, Acting Justice Walmsley made a costs order in favour of the Sherriff in the sum of $5,478.
On the last occasion before Ashford AJ, on 17 March 2017, the bench sheet relevantly records the orders as:
1.Her Honour adjourns both applications to 2.15 pm on 27 April 2017 on the following terms:
(a) If Mr Nolan wishes to seek legal advice he must do that prior to 27 April 2017. If Mr Nolan fails to obtain legal advice by that date Mr Nolan has been informed that he may have to proceed without legal representation.
2.Her Honour reserves any order as to costs of today’s application for the judge on 27 April 2017 to determine.
The bench sheet also records that it was noted:
Mr Nolan has made a verbal assurance from the bar table that $158,000 (in round figures) will be transferred into the enforcement creditors trust account by 4 pm 21 March 2017.
The appellant notes that there is an amount outstanding of $20,262.76 of a consent order made by Walmsley AJ on 3 March 2017.
No money has been paid to the judgement creditors since 17 March 2017.
At the hearing of the applications, I received no meaningful explanation as to why, at least, the judgment debt itself had not been paid as distinct from interest and costs. Mr Nolan, had, of course, previously announced a financial capacity to pay it. Having regard to the circumstances, I find that it is likely that the judgment debtors will not pay the judgment debt voluntarily.
Hearing
On 27 April 2017 I heard two applications brought by the judgment creditors on 17 February and 16 March 2017. Ms Irving appeared for the judgment creditors and Mr Nolan appeared for both himself and Ms Vidovic.
On that date, leaving aside the two costs orders made by Walmsley AJ recorded above, a sum of approximately $106,000 together with interest remained unpaid on the judgment debt.
By this date, the orders made by the Court and recorded by me above, had not been the subject of an appeal and the dates for so doing had passed. Leave to appeal out of time was still a possibility but the orders made by Acting Justice Walmsley were made by consent, a consent given by a former legal practitioner of many years standing. A further hurdle to seeking leave to appeal was that both orders were interlocutory, in any event.
The primary order sought by the judgment creditors was leave to further amend the Amended Seizure and Sale Order so as to increase the amount sought by an amount of $64,884.37, being the total of the two orders made by Acting Justice Walmsley above.
This order was opposed by Mr Nolan on the ground that the orders could not simply be added to the Amended Seizure and Sale Order. They were, in fact, orders and stood as debts but independent debts not enforceable under the Amended Seizure and Sale Order. They could be enforced, but only in other ways, for example, garnishee orders. A further possibility, Mr Nolan said, was a second Seizure and Sale Order, presumably over the same properties.
I asked Mr Nolan what prejudice would be suffered from further amending the existing Amended Seizure and Sale Order in the way sought. I was not able to obtain a satisfactory answer from him. He did not claim, for example, that a later order had been registered against the title so that if the first order was amended it would disturb existing priorities or that some other intervening circumstance had occurred.
It needs to be kept in mind that an order for the sale of a property is just one way to obtain execution on a monetary judgment. The money is owing by the debtor. There is no reason why it should not be paid. There is no question of prejudice.
Questions Raised
In any event, the first question to be determined is whether there is power under the Court Procedures Rules 2006 (ACT) (the Rules), or by dispensation with the Rules, to add the two orders in question to the amount claimed under the existing Amended Seizure and Sale Order. A second question may arise and involve an exercise of discretion in practice and procedure.
In the normal course of events, the Rules provide for the Sherriff to sell property, in this case two leasehold estates, and, after first paying out prior encumbrances and expenses, discharge or partially discharge the judgment debt by payment to (or to the account of) the judgment creditor. Any surplus is returned to the judgment debtor. The judgment creditor is entitled to the costs of enforcement and interest.
I have come to the view that there is no express power to amend the existing Amended Seizure and Sale Order to add the two further monetary judgements. Rule 502(5) does not apply the power to amend documents to “an amendment of an order”. Nor does Division 2.18.5 contemplate expressly any amendment to enlarge the monetary amount as a result of a further monetary judgment. This is in contrast to r 2052 which expressly contemplates an extension of the duration of a Seizure and Sale Order.
A telling circumstance, to my mind, is the system of priorities attending enforcement orders generally. Rules 2054 to 2057 set these out but they are supplemented elsewhere.
Rule 2054 is central to the creation of priority. It provides-
Enforcement orders—priority
(1) The precise time an application for an enforcement order is made must be written on the application by the registrar.
(2) If more than 1 application for an enforcement order against the same person is made to the court, the court must make the orders in order of the times written on the applications.
(3) The precise time an enforcement order is made must be written on the order by the registrar.
(4) If more than 1 enforcement order against the same person is given to an enforcement officer, the enforcement officer must enforce the orders in order of the times written on the orders.
(5) In this rule:
"precise time" means the hour, day, month and year.
In accordance with these priorities it appears to me that the contemplation is that a further Order is to be made in the current circumstances. It will take its priority from the precise time of the application for its making. This is, as opposed to the amendment of the first Order. It may well be that there will be no different practical effect, if there is no intervening creditor, from merely amending the first Order, but that is not to the point.
In these circumstances, I do not believe I can accede to the application in its current form, although there would be much to commend that course. It is possible and highly desirable to make an order giving rise to a second seizure and sale order. If the properties are to be sold under the first seizure and sale order there is no reason why, if the proceeds of sale are sufficient to pay out the first order, any surplus cannot be made available to then pay out the second seizure and sale order.
It is appropriate at this point to consider the possibility of the judgment debtors raising again applications under r 2051 to set aside a fresh but consecutive seizure and sale order or under r 2013 to stay such an order. Three matters are of relevance. First the issues have been previously the subject of determination between the parties. Second, that has been a recent determination. Third, the matter of injunctive relief was raised in one of the two applications and was the subject of argument in this hearing. It was not suggested on behalf of the judgment debtors that circumstances had changed. No stay or like other application was foreshadowed.
It could be regarded as an abuse of process for the judgment debtors to now bring further applications re-litigating matters previously decided against them or applications which could have been raised in the proceedings concerning the first Seizure and Sale Order.
In an article entitled “Inherent Jurisdiction of the Court” (1983) 57 ALJ 449, Keith Mason wrote:
“The inherent jurisdiction has positive and negative aspects, depending on whether judicial powers are being invoked to facilitate the proper conduct of legal proceedings or to overcome practices or devices which tend to delay, impede or frustrate judicial functioning. The mere fact that some statute or rule of court enables a court to deal with the particular problem in a particular way will not usually exclude inherent powers to deal with it in other ways. Indeed, this jurisdiction may be asserted even though the conduct complained of may be in literal compliance with some statute or rule of court.”
I take this statement to represent a convenient summary of the current law. It has been approved on many occasions. It is firmly based upon such platforms as Lord Diplock’s speech in Hunter v Chief Constable of the Western Midlands Police [1982] A.C. 529 at 536, where he said:
‘[The case] concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise being the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied; those which give rise to the instant appeal must surely be unique. It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power.’
An order should be made to guard against the possibility of an application being brought which is, in substance, an abuse of the processes of the Court despite being within literal compliance with the Rules. However, without seeing such an application and its grounds, it is impossible to tell in advance whether the application would delay, impede or frustrate the proper resolution of the proceedings.
Having regard to the history of the matter, some of which is set out in Justice Penfold’s decision above, the further applications and delay since that decision, the non‑compliance with recent undertakings and the non-compliance with recent orders to pay money, I have decided to take a course involving a just resolution of the real issues in dispute as quickly as possible, as inexpensively from this point on as possible and as efficiently from this point on as possible. There should be liberty to apply in respect to the working out of the orders lest some circumstance has escaped proper attention from me.
Out of caution, I confirm two matters. First, the priority of the seizure and sale order as set out in Order 4 of the orders made by Penfold J at para [8] above. Second, the Sherriff should forthwith take all steps to carry out that order. There is no stay of that order and until there is a formal stay made by the Court the process must be continued even if an application to the Court is made for a stay.
It is necessary to add a postscript. When my associate gave notice to the parties of the handing down of this judgment he incorrectly stated the date as 26 July 2017. This date was promptly corrected to 26 June 2017. That led to correspondence from the second judgment debtor in which she wrote-
I must refuse this date as after taking legal advice it does not seem to comply with the seven day procedural requirement guideline for procedural fairness.
She went on to say that ‘This is trial by surprise’ and wanted the handing down of judgment to be moved back to 26 July 2017.
I do not propose to comply with this request. I am dealing with the handing down of a judgment in open court.
Order
Accordingly, for the reasons set out above, I make the following orders, directions and modifications to the ordinary operation of the Rules:
(a)Order that a Seizure and Sale Order be issued to authorise an enforcement officer to seize and sell in satisfaction of the two order debts of $44,621-61 and $20,262-76, together $64,884-37, real property at-
Unit [xx], Block [xx], Section [xxx] on Deposited Plan 7365 in the suburb of Isabella Plains (also known as Unit [xx] of [xx] Cromwell Circuit, Isabella Plains, ACT 2905); and
the property already covered by the seizure and sale order, being Unit [xx], Block [xx], Section [xx] on Deposited Plan 8455 in the suburb of Griffith (also known as Unit [xx] of [xx] McMillan Crescent, Griffith, ACT 2617).
(b)Order that the application for the above Seizure and Sale Order be taken to have been made to the Court on 16 March 2017.
(c)Order that the judgment creditor submit to the Registrar for sealing a draft of these orders in conformity with this judgment and in compliance with the monetary details as regards dates, payments and interest required by r 2201 to the intent that the judgment debtors will know the amount required to be paid under the second Seizure and Sale Order.
(d)Order that all other requirements of r 2201 be dispensed with.
(e)Direct that the Sherriff have liberty to apply to the Court for directions concerning any ancillary orders as may be convenient to facilitate and aid the Sherriff in and about the execution of these orders.
(f)I modify the operation of r 2213 and order that, in the event that the judgment debtors pay to the Registrar, prior to sale, the amounts owing under the seizure and sale orders including interest, costs of enforcement then known to the enforcement officer, and the amount set by the enforcement officer as security for the creditors other costs of enforcement then-
(i)the enforcement officer may not sell the property; and
(ii)either party may apply for payment out to the intent that the Court will determine the respective entitlements to the funds in Court.
(g)Grant liberty to the judgment creditors to relist this matter for further consideration of injunctive relief or other remedy based upon abuse of process, should the judgment creditors be so advised.
(h)Grant liberty to apply in respect of the working out of these orders.
(i)Reserve further consideration of the Applications including the costs of these Applications.
(j)Adjourn the proceedings to 9 August 2017 at 9.30 am for directions.
| I certify that the preceding [36] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Robinson. Associate: Date: 26 June 2017 |