Kelbush Pty Ltd v Clark

Case [2023] WADC 72 (S)

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION: KELBUSH PTY LTD -v- CLARK [2023] WADC 72

CORAM:   RUSSELL DCJ

HEARD:   1 JULY 2022

DELIVERED          :   30 JUNE 2023

FILE NO/S:   APP 90 of 2021

BETWEEN:   KELBUSH PTY LTD

Appellant

AND

JARED CLARK

First Respondent

SLOBADAN MANJENCIC

Second Respondent

ON APPEAL FROM:

Jurisdiction              :   MAGISTRATES COURT OF WESTERN AUSTRALIA

Coram:   MAGISTRATE M CRAWFORD

File Number            :   PER/GCLM/10028/2020


Catchwords:

Appeal - Magistrates Court - Application for debt appropriation order - Objection by third person - Application by third person to allow objection to a debt appropriation order - Meaning of 'available debt' under s 46(1)(c) of the Civil Judgments Enforcement Act 2004 (WA)

Legislation:

Civil Judgments Enforcement Act 2004 (WA), pt 4, div 5, sch 1, s 45, s 46(1), s 46(1)(c), s 49, s 49(1), s 50, s 51, s 52, s 53, s 54(1), s 54(1)(b),
Civil Judgments Enforcement Regulations 2005 (WA), div 4
District Court Rules 2005 (WA), r 50(1), r 50(2)
Magistrates Court (Civil Proceedings) Act 2004 (WA), pt 7, s 40(3), s 40(4)(a), s 40(4)(b), s 40(5)

Result:

Appeal dismissed

Representation:

Counsel:

Appellant : Mr G R Hancy
First Respondent : Mr T J Palmer SC
Second Respondent : No appearance

Solicitors:

Appellant : Kennedy Vinciullo
First Respondent : McCabes
Second Respondent : No appearance

Case(s) referred to in decision(s):

Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99

Bayswater Car Rental Pty Ltd v Hannell [1999] WASCA 34

Brocklehurst v Wolinski [2015] WADC 36

Butler v Bennett [2007] WADC 107

Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234

Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640

Fitzpatrick v Norman Job & Wendy Barbara Job t/as Jobs Engineering [2007] WASCA 63

Gibbs v Haoma Mining NL [No 6] [2017] WADC 67

JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd [No 2] [2020] WASCA 112

Jones v Darkan Hotel [2014] WASCA 133

McMurray v AIG Insurance Australia Ltd [No 5] [2021] WASC 300

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd Wright Prospecting Pty Ltd v Mount Bruce Mining Pty Ltd [2015] HCA 37; (2015) 256 CLR 104

Paula Susan Chappell as Executor of the Estate of Robert Hastings Hitchock v Goldspan Investments Pty Ltd [2021] WASCA 205

WFI Insurance Ltd v Manitowoq Platinum Pty Ltd [2018] WASCA 89

Xerri v Kingmill Pty Ltd (t/as Thrifty Car Rentals) [1998] NSWSC 573

Zhu v The Treasurer of the State of New South Wales [2004] HCA 56; (2004) 218 CLR 530

RUSSELL DCJ:

Introduction

  1. The appellant, Kelbush Pty Ltd trading as Northside Rentals, appeals the learned magistrate's decision dated 15 November 2021 dismissing the appellant's application to allow an objection to a debt appropriation order made against it on 23 April 2021 in favour of the first respondent, Jared Clark (appellant's…

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AGLC
Kelbush Pty Ltd v Clark [2023] WADC 72
Case
[2023] WADC 72 (S)
Decision Date

CaseChat Overview and Summary

The case of Kelbush Pty Ltd v Clark involved Kelbush Pty Ltd, the plaintiff, seeking a debt appropriation order against Clark, the defendant. Kelbush had obtained a judgment against another party and sought to enforce it by appropriating debts owed to the judgment debtor by third parties. One of these third parties, Clark, objected to the appropriation order on the grounds that the debt was not available as defined under section 46(1)(c) of the Civil Judgments Enforcement Act 2004 (WA). The matter was heard in the Magistrates Court of Western Australia.

The central legal issue before the court was the interpretation of the term 'available debt' as defined in section 46(1)(c) of the Civil Judgments Enforcement Act 2004 (WA). Specifically, the court had to determine whether a debt that may arise in respect of an existing cause of action, such as a potential claim for vehicle damage, could be considered 'available' for the purposes of a debt appropriation order. The court was also required to consider whether the objection raised by Clark was valid and whether the debt in question met the criteria for being deemed 'available'.

The court approached the matter by applying the principles of contractual interpretation, particularly the objective approach based on the understanding of a reasonable person in the position of the parties. The court emphasised that the interpretation should be based on the contract as a whole, its text, context, and its purpose. The court found that to interpret clause 2.2(j) of the Rental Agreement in the manner suggested by Kelbush would render the damage cover meaningless if the driver acted negligently. The court also highlighted that the circumstances of the case differed from a previous case cited by Kelbush, where the court had held that an exclusion applied to deny cover. The court concluded that each contract must be considered on its own terms and that it was difficult to conceive of a situation where a claim for vehicle damage would not involve some element of careless or negligent driving.

The court ultimately ruled that the debt in question did not qualify as an 'available debt' under section 46(1)(c) of the Civil Judgments Enforcement Act 2004 (WA). Consequently, the objection raised by Clark was upheld, and the debt appropriation order was not granted. This decision underscores the importance of interpreting contractual terms objectively and considering the specific facts of each case.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

An 'available debt' is defined by s 46(1) of the CJE Act, as follows:46Available debt in relation to a judgment debtor(1)An available debt in relation to a judgment debtor is any obligation on the part of a person to pay money to the debtor alone, or to the debtor jointly with another or others, which obligation, at the time a debt appropriation order is made -(a)is current and unconditional, irrespective of whether the money or any part of it is payable at some future time; or(b)will arise on the fulfilment of one or more conditions under -(i)an existing agreement or trust; or(ii)the will of a deceased person; or(iii)an issued share or other marketable security;or(c)may arise in respect of an existing cause of action; or(d)is imposed by a written law and is likely to arise as a result of an event that has occurred. The power to make a debt appropriation order is set out in s 49 of the CJE Act, which provides: 49Debt appropriation order(1)In order to recover a judgment debt, a judgment creditor may apply to the court for an order requiring a person who owes or will or may owe an available debt to the judgment debtor alone or to the judgment debtor jointly with another or others to pay - (a)the whole amount of the available debt; or(b)such of the available debt as will satisfy the judgment debt,to the judgment creditor at the time or times when the available debt would otherwise be paid to the judgment debtor.(2)The court may make such an order, subject to sections 20(1) and 22.(3)When or after making a debt appropriation order, the court may make an order under Schedule 1 clause 2, 3 or 4.(4)A debt appropriation order may apply to more than one available debt that is or will be or may be owed by one person to the judgment debtor alone or to the judgment debtor jointly with another or others.(5)Despite any other law, a debt appropriation order may be made in respect of any available debt owed by the State to the judgment debtor. Sections 50 - 53 of the CJE Act deal respectively with the following in relation to a debt appropriation order:1.the content and service of a debt appropriation order;[9] 2.when a debt appropriation order takes effect, the time by which payment of the appropriated debt must be made and when a debt appropriation order ceases to have effect;[10]3.a third person's obligations under of a debt appropriation order;[11] and4.a third person's entitlement to reasonable expenses of obeying a debt appropriation order.[12][9] CJE Act, s 50.[10] CJE Act, s 51.[11] CJE Act, s 52.[12] CJE Act, s 53. Section 54(1) of the CJE Act provides that a third person served with a debt appropriation order may object to the order on one or more of three grounds. They are:(a)That a person other than the judgment debtor and the judgment creditor owns or has a claim on or interest in the appropriated debt;(b)That the appropriated debt does not and will not exist;(c)That the third person has an unsatisfied monetary judgment against the judgment creditor or the judgement debtor.

Ratio Decidendi

Legal Principle Established

The principles relating to construction of commercial contracts are well settled. A contract is to be construed objectively based on the understanding of a reasonable person in the position of the parties to it by reference to the contract as a whole, to its text, context and its purpose of objects.[49] Unless the contrary intention is indicated, the court is entitled to apply a businesslike interpretation and prefer a construction that makes commercial sense and will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust.[50][49] Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd Wright Prospecting Pty Ltd v Mount Bruce Mining Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] - [53]; JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd [No 2] [2020] WASCA 112 [67] - [72] and the authorities referred to.[50] See Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99, 109; Zhu v The Treasurer of the State of New South Wales [2004] HCA 56; (2004) 218 CLR 530, [82]; Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [35]. To construe cl 2.2(j) of the Rental Agreement as the appellant suggests would have the effect that driving negligently would negate entitlement to the damage cover, rendering the damage cover meaningless, as the learned magistrate found. The learned magistrate, was correct, in my view in reaching that conclusion, essentially for the reasons he gave and having regard to the authorities he referred to.[51] [51] Reasons for decision [35] - [45]; WFI Insurance Ltd v Manitowoq Platinum Pty Ltd [116] (Martin CJ); Fitzpatrick v Norman Job & Wendy Barbara Job t/as Jobs Engineering [2007] WASCA 63 [268] (Buss JA). Counsel for the appellant referred the magistrate and this court to the decision of the New South Wales Court of Appeal in Xerri v Kingmill Pty Ltd (t/as Thrifty Car Rentals),[52] which concerned a car rental agreement that excluded liability to pay the hirer where there was a breach of statute or regulations. Whilst the court held that an exclusion in similar terms applied to deny cover in that case, the circumstances of that case differed to the present case. The rental agreement provided insurance cover to the hirer and, because the driver of the hire vehicle had died, the potential creditor had a right to sue the hirer for his repair costs directly under s 51 of the Insurance Contracts Act. There were factual findings in that case that the deceased hirer had driven contrary to traffic regulations.[52] Xerri v Kingmill Pty Ltd (t/as Thrifty Car Rentals) [1998] NSWSC 573. Ultimately, each contract will vary and must be considered and construed on its terms as outlined in [74], and each case must be considered and decided on its own facts. It is hard to conceive of a circumstance in which there would be a claim for damage involving vehicles where some careless or negligent driving was not involved.