Kelbush Pty Ltd v Clark - [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

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 Application).
The first respondent is the judgment creditor in the Magistrates Court proceeding. His position in the appeal is, in effect, that the magistrate's decision to dismiss the appellant's Application was not in error and should be upheld.
The second respondent, Slobodan Manjencic, is the judgment debtor in the Magistrates Court proceeding. He did not take part in the appeal.
I will refer in these reasons to:
1.Kelbush Pty Ltd trading as Northside Rentals, as the appellant;
2.Jared Clark, as the first respondent or judgment creditor; and
3.Slobadan Manjencic, as the second respondent or judgment debtor.
For the reasons that follow, the appeal should be and is dismissed, and the learned magistrate's decision dismissing the appellant's Application is upheld.

Relevant background

The following matters relevant to the circumstances leading to the appeal are not controversial or are evident from the materials before me.
On 3 March 2021, through lawyers instructed by his motor insurer RAC Insurance Pty Ltd, the judgment creditor obtained default judgment in the amount of $3,387.22 against the judgment debtor in respect of a claim for damages for the cost of repairs arising out of a motor vehicle accident.
The motor vehicle accident the subject of the claim occurred on 15 July 2020 (the Accident). At the time of the Accident, the judgment debtor was driving a Nissan X-Trail hired by him from the appellant under a rideshare rental vehicle agreement (Rental Agreement).
The Rental Agreement is dated 23 November 2018 and subject to standard form terms and conditions.
By cl 4 of the terms and conditions of the Rental Agreement, the appellant agreed to provide damage cover to the judgment debtor on certain conditions in respect of (relevantly) third party damage. The terms of cl 4 are as follows:
4.DAMAGE COVER
If you act within the terms and conditions of this Agreement the Company will grant Damage Cover (including legal costs incurred with the Company's consent) for the Hirer's benefit in respect of damage to the Vehicle or third party damage other than for any property owned by You (or any of Your friends, relatives, associates, related bodies corporate or passengers) or in Your physical or legal control. This Damage Cover is subject to:
(a)Your payment, to the Company, of the amount up to the Damage Loss Liability Charge (per claim) stated on Page 1, within 48 hours. NOTE: Drivers aged 21 to 24 years inclusive incur a higher Damage Loss Liability Charge as stated on Page 1.
(b)You not having acted or not having caused any other person to have acted in any manner which is in contravention of this Agreement including the Special Condition on Page 1.
(c)You not being covered by any policy of insurance for the same loss or damage.
(d)You providing such information and assistance as may be requested and, if necessary, authorizing the Company's insurer to bring, defend or settle legal proceedings, but the Company will have sole conduct of the proceedings.
(e)Collision or damage report form supplied by the Company and a Police Report (as applicable) have been completed in full, and returned within 48 hours.
On 16 July 2020, the day after the Accident, the judgment debtor:
1.informed the appellant and police of the Accident;
2.completed an Insurance Commission of Western Australia online crash report in relation to the Accident; and
3.paid the appellant $1,000, being the amount of the 'Minimum Damage Loss Liability' stated on page 1 of the Rental Agreement.
By a letter dated 29 July 2020 headed 'Without Prejudice', the appellant informed the judgment debtor that it had been determined that he was not covered under the damage cover due to his breach of the terms and conditions, as set out in that letter.
On 2 October 2020, the judgment creditor commenced the Magistrates Court proceeding by way of a general procedure claim against the judgment debtor, claiming damages alleged to arise from the negligent driving of the judgment debtor in the Accident. The total amount claimed, including interest and costs was $3,273.47.
On 3 March 2021, the judgment creditor obtained default judgment against the judgment debtor in the amount of $3,387.22.
On 23 April 2021, a registrar granted the judgment creditor's application for a debt appropriation order against the appellant, pursuant to s 49 of the Civil Judgments Enforcement Act 2004 (CJE Act).
The appellant objected to the debt appropriation order and, on 15 October 2021, the magistrate heard the appellant's Application (for an order that its objection to the debt appropriation order be allowed).
On 15 November 2021, the magistrate made orders dismissing the appellant's Application and gave written reasons for his decision.[1] The appellant appeals against the magistrate's decision.
[1] Appeal book, pages 59 - 76.

The appeal to this court

The appellant filed an appeal notice on 6 December 2021 (Appeal Notice), within 21 days of the magistrate's decision as required by s 40(3) of the Magistrates Court (Civil Proceedings) Act 2004 (WA) (MCCP Act).
The first respondent filed a notice of respondent's intention to take part in the appeal on 8 December 2021.
On 6 April 2022, a certificate of service was filed confirming personal service on the second respondent of the following on 3 April 2022:
1.Appeal Notice;
2.notice of respondent's intention filed by the first respondent; and
3.consent orders dated 15 February 2022.
The second respondent has not filed a notice of respondent's intention and did not take part in the appeal.
At the hearing of the appeal, the appellant and the first respondent each relied on the written submissions filed by them,[2] and the oral submissions made on their behalf by counsel.

General principles relating to the appeal

[2] Appellant's outline of submissions filed 9 May 2022; First respondent's outline of submissions filed 30 May 2022; Appellant's further outline of submissions filed 23 June 2022.

The District Court's appeal jurisdiction is found in pt 7 of the MCCP Act. The appeal must be decided on the material and evidence that was before the Magistrates Court.[3] Further evidence may only be adduced in an appeal with leave of the court, which leave may only be given in exceptional circumstances.[4] No new evidence was sought to be adduced in the appeal.
[3] MCCP Act s 40(4)(a). See also District Court Rules2005 (WA) (DCR), r 50(1).
[4] MCCP Act s 40(4)(b), s 40(5). See also DCR, r 50(2).
The appeal is by way of a rehearing.[5] As a rehearing, the appellate powers of the District Court are only exercisable if the appellant demonstrates that the decision made by the magistrate the subject of the appeal was the result of some legal, factual or discretionary error.[6] The onus is on the appellant to demonstrate error in the court below.[7]

Grounds of appeal and matters raised in first respondent's notice of intention

Grounds of appeal

[5] Brocklehurst v Wolinski [2015] WADC 36 [14] (Derrick DCJ); Butler v Bennett [2007] WADC 107 [6] ‑ [10] (Bowden DCJ).

[6] Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 [23] (Gaudron, McHugh, Gummow & Hayne JJ).

[7] Jones v Darkan Hotel [2014] WASCA 133 [31] (judgment of the court).

The appellant appeals on four grounds. They are, the learned magistrate erred in law:
1.in holding that the appellant conceded that an available debt existed and that an objection must fail if an available debt existed at the time of a debt appropriation order (Ground 1);
2.in holding that cl 2.2(j) of the 'Rideshare Agreement Rental Vehicle Terms and Conditions (Terms and Conditions)' should be read down so that it only applies if the hirer drove recklessly (Ground 2);
3.and as to reckless driving, erred in fact, in failing to find that by reason of negligent or reckless driving the second respondent had not acted 'within the terms and conditions of the Terms and Conditions' and the appellant was not required to grant damage cover under cl 4 (Ground 3);
4.in failing to hold that when the first respondent obtained the debt appropriation order ex parte, it failed to disclose relevant evidence (Ground 4).
In oral submissions at the hearing of the appeal, the appellant submitted that, although there are four grounds of appeal, it is the first two grounds that are the substantial grounds. That is, whether there was an available debt and the construction of cl 2.2(j) of the Rental Agreement.[8]

Matters raised in first respondent's notice of intention

[8] Transcript of appeal hearing 1 July 2022 (Appeal ts), Appeal ts 3 ‑ ts 4.

The first respondent's primary position in relation to the appeal is that the magistrate's decision to dismiss the appellant's Application was not in error and should be upheld. In addition, it is contended on his behalf that the magistrate's decision not to allow the appellant's objection to the debt appropriation order should be upheld because:
1.the notice of objection was not served within the prescribed time; and
2.the magistrate had no power to extend the time for filing of:
(a)the notice of objection (Form 20); or
(b)the application for an order that a debt appropriation order be allowed (Form 22).

Debt appropriation order - relevant statutory framework

A debt appropriation order is one of several orders a court may make under pt 4 of the CJE Act in relation to the enforcement of a monetary judgment. The statutory framework applicable to appropriating debts owed to a judgment debtor is set out in div 5 and sch 1 of the CJE Act and div 4 of the Civil Judgments Enforcement Regulations 2005 (WA) (CJE Regulations).
Section 45 of the CJE Act defines 'appropriated debt' as:
… an available debt, or the portion of an available debt, to which a debt appropriation order applies.
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] and
4.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.
An objection made under s 54(1) must be in writing, state the grounds on which it is made and the facts to support the grounds, and be lodged at the court within 7 days after the day on which the third person is served with the debt appropriation order.[13]
[13] CJE Act, s 54(2).
If a judgment creditor served with an objection to a debt appropriation order does not allow the objection within 7 days after the date of the objection, (relevantly) the third person may apply to the court for an order that the objection be allowed.[14] At the hearing of the application, the court may allow or reject the objection.[15]
[14] CJE Act, s 55(2).
[15] CJE Act, s 55(4).

The appellant's objection and application to allow its objection to the debt appropriation order

The debt appropriation order was made by a registrar of the Magistrates Court on 23 April 2021.[16] A copy of the order was sent to the appellant by the judgment creditor's solicitors by email and post on 27 April 2021.[17]
[16] Appeal book, page 407.
[17] Affidavit of David James Mulligan sworn on 30 July 2021 (Second Mulligan Affidavit), par 5, 'DJM-2'; Appeal book, pages 386, 405 - 408; Affidavit of Langli-Morgan Rocci sworn 15 June 2021 (Second Rocci Affidavit), par 5; Appeal book, page 348.
On 3 May 2021, the appellant sent a copy of its notice of objection to the debt appropriation order to the judgment creditor's solicitors by email.[18] The appellant also attempted to lodge its objection through the eCourts portal on 3 May 2021 but was unable to do so as it was not a party to the proceeding.[19] The appellant's objection was ultimately accepted for lodgement by the court on 13 May 2021.[20]
[18] Second Mulligan Affidavit, par 6, 'DJM-3'; Appeal book, pages 387, 460 - 461; Second Rocci Affidavit, par 6; Appeal Book, page 6.
[19] Affidavit of Langli-Morgan Rocci sworn 3 June 2021 (First Rocci Affidavit); Appeal book, pages 337 ‑ 338, 340 - 346.
[20] Appeal book, page 96.
The appellant relied on the ground of objection provided under s 54(1)(b) of the CJE Act, namely:
That the appropriated debt does not and will not exist.
The notice of objection set out the following facts or circumstances in support of the objection:
-Kelbush Pty Ltd does not owe this debt.
-No damage cover - Damage cover voided due to breaches in the terms and conditions of the rental agreement.
-No indemnity or indemnification or policy of insurance are included in the rental agreement.
The appellant's notice of objection was received by the judgment creditor's solicitors on 3 May 2021 and, on 4 May 2021, they informed the appellant by email that the judgment creditor would not allow the objection.[21]
[21] First Rocci Affidavit; Appeal book, page 339.
On 3 June 2021, the appellant lodged its application for an order that its objection to the debt appropriation order be allowed.[22] The appellant's Application proceeded to a contested hearing before the learned magistrate on 15 October 2021.
[22] Appeal book, pages 97 - 98.
At the hearing of the appellant's Application, the materials before the court included:
1.affidavit of David James Mulligan sworn on 13 April 2021 (First Mulligan Affidavit);[23]
2.affidavit of Langli-Morgan Rocci sworn on 3 June 2021 (First Rocci Affidavit);[24]
3.affidavit of Langli-Morgan Rocci sworn on 15 June 2021 (Second Rocci Affidavit);[25]
4.affidavit of Langli-Morgan Rocci sworn on 16 July 2021 (Third Rocci Affidavit);[26]
5.affidavit of David James Mulligan sworn on 30 July 2021 (Second Mulligan Affidavit);[27]
6.affidavit of Langli-Morgan Rocci sworn on 3 June 2021 (Fourth Rocci Affidavit);[28]
7.the documents annexed to the affidavits and included in the appeal book at pages 418 - 490;
8.the appellant's written submissions filed on 26 August 2021 and 13 September 2021; and
9.the judgment creditor's written submissions filed on 26 August 2021 and 12 October 2021.
[23] Appeal book, pages 303 - 336.
[24] Appeal book, pages 337 - 347.
[25] Appeal book, pages 348 - 361.
[26] Appeal book, pages 362-385.
[27] Appeal book, pages 386- 413.
[28] Appeal book, pages 414 - 417.

The appeal from the learned magistrate's decision

I do not repeat the submissions made at the hearing before the magistrate on 15 October 2021. They are recorded in the transcript.[29] Nor do I repeat the learned magistrate's reasons, which are set out in his reasons for decision.[30]
[29] Appeal book, pages 14 - 56.
[30] Appeal book, pages 59 - 76.
A significant amount of time was devoted in argument before the magistrate and, it follows, in the magistrate's reasons, to whether the judgment debtor was in breach of the terms of the Rental Agreement, such that he was not entitled to damage cover under it. The magistrate summarised the arguments advanced on behalf of the appellant as to why it said that the debt did not and will not exist because the judgment debtor was not entitled to the damage cover under the Rental Agreement, as follows:
1.The judgment debtor allegedly failed to disclose demerit points on his driver's licence. This argument was not pressed and ultimately abandoned before the magistrate.[31]
2.The judgment debtor allegedly drove the hire vehicle in a reckless or dangerous manner for which an infringement notice may be issued. This was disputed by the judgment creditor. The magistrate found there was no evidence to prove this and he could not be, and was not, satisfied it was driven in such a manner.[32]
3.The judgment debtor allegedly 'used' the hire vehicle in a manner that contravened legislation or regulations controlling vehicular traffic. This was disputed by the judgment creditor.[33]
4.The judgment debtor allegedly failed to deliver the summons or complaint to the appellant. This was not pressed and was abandoned at the hearing before the magistrate.[34]
[31] Magistrate's reasons for decision dated 15 November 2021 (Reasons for decision) [20(a)]; See also Transcript of Magistrates Court hearing 1 July 2022 (Magistrates Court ts), Magistrates Court ts 35, Magistrates Court ts 45.
[32] Reasons for decision [20(b)].
[33] Reasons for decision [20(c)].
[34] Reasons for decision [20(d)].
For the reasons that follow, in my view, those are not matters that required determination in deciding the appellant's Application.
The questions raised as to whether the judgment debtor was in breach of the terms of the Rental Agreement are matters for determination at a later date. All the court was required to do at the stage of determining the objection to the debt appropriation order was to determine whether there was an available debt as prescribed in s 46(1) of the CJE Act, at the time the order was made.
Relevantly, the question for the magistrate in this case was whether, at the time of the application for the debt appropriation order, an obligation on the part of the appellant to pay money to the judgment debtor may arise in respect of an existing cause of action. That is the question the learned magistrate correctly addressed and answered,[35] and upon which his decision to dismiss the appellant's Application was made.
[35] Reasons for decision [9] - [17] and [50]; Appeal book, pages 63 - 64 and 75.
The magistrate made no error. He was correct to reject the appellant's argument that its objection to the debt appropriation order should be allowed because there was and will never be 'a debt'.
No issue is taken in the grounds of appeal with the magistrate's findings that cl 4 of the Rental Agreement amounted to an insurance contract for the purpose of the Insurance Contracts Act 1984 (Cth), nor that the judgment debtor had a cause of action against the appellant.[36] In my view, the learned magistrate was correct in both respects, essentially for the reasons he gave, and consistent with the authorities he referred to.[37]
[36] Reasons for decision [18(d)], [25] - [32], [47] - [49].
[37] Bayswater Car Rental Pty Ltd v Hannell [1999] WASCA 34 [55] - [58] (Steytler J); WFI Insurance Ltd v Manitowoq Platinum Pty Ltd [2018] WASCA 89, 116 (Martin CJ); McMurray v AIG Insurance Australia Ltd [No 5] [2021] WASC 300 [448] - [455] (Smith J); Gibbs v Haoma Mining NL [No 6] [2017] WADC 67, and the authorities referred to (Staude DCJ).
At the time of the application for the debt appropriation order, the judgment debtor had an existing cause of action against the appellant. A cause of action accrues when all the facts have occurred which the plaintiff must prove in order to succeed. As identified by the learned magistrate,[38] a cause of action put simply, as it was by Wilson J in Do Carmo v Ford Excavations Pty Ltd,[39] is:
… the fact or combination of facts which gives rise to a right to sue.
[38] Reasons for decision [47].
[39] Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234, 245.
The cause of action, in this case, is the judgment debtor's right to sue the appellant on the promise to provide the damage cover under the terms of the Rental Agreement. The matters raised by the appellant are matters that may give rise to a defence to a claim brought by the judgment debtor against the appellant. However, they do not preclude appropriation of the available debt, an obligation that may arise to pay money to the judgment debtor in respect of an existing cause of action against the appellant.

Ground 1

The first ground of appeal is that the learned magistrate erred in law in holding that the appellant conceded that an available debt existed and that an objection must fail if an available debt existed at the time of a debt appropriation order.
For the reasons already stated above and those that follow, I find that the learned magistrate did not err in law as contended in Ground 1.
The magistrate correctly decided that there was an available debt of the kind prescribed in s 46(1)(c) of the CJE Act. In doing so, he construed the relevant provisions of the CJE Act by giving the words of the provisions their plain and ordinary meaning. I refer to and respectfully adopt the summary of relevant principles of statutory construction in Paula Susan Chappell as Executor of the Estate of Robert Hastings Hitchcock v Goldspan Investments Pty Ltd.[40]
[40] Paula Susan Chappell as Executor of the Estate of Robert Hastings Hitchock v Goldspan Investments Pty Ltd [2021] WASCA 205 [31] - [35] (Buss P & Mitchell JA).
As stated by their Honours Buss P and Mitchell JA in that decision:
31The focus of statutory construction is upon the text of the provisions having regard to their context and purpose.
32… A decision as to the meaning of the text requires consideration of the context, in its widest sense, including the general purpose and policy of the provision. …
(references and footnotes omitted)
It is clear, having regard to the text of the relevant provisions, that the available debt under s 46(1)(c) of the CJE Act is an obligation to pay money to the judgment debtor that may arise in the future in respect of an existing cause of action, not a debt or obligation to pay money that already exists. This is apparent on a plain reading of the text of s 46(1)(c). It is also apparent, having regard to the debt appropriation provisions as a whole and, in particular, the following provisions, which include language that is forward looking or prospective:
1.Section 49(1) of the CJE Act provides:
(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 …
(emphasis added)
2.Section 50 of the CJE Act provides:
(1)A debt appropriation order is to -
(a)be addressed to the person who owes or will or may owe the available debt; and
…
(emphasis added)
3.Section 51 of the CJE Act provides:
…
(3)If an appropriated debt is payable to the judgment debtor in full at one time, the third person must pay the full debt to the judgment creditor -
(a)if the debt is due and payable to the judgment debtor at the time the order is made -within 7 days after the day on which the debt appropriation order is served on the third person; or
(b)in any other case - within 7 days after the day on which the appropriated debt becomes due and payable to the judgment debtor.
(emphasis added)
It is also consistent with the purpose and policy of the provisions in the CJE Act relating to civil judgment enforcement, which were introduced to give effect to the Law Reform Commission of Western Australia's recommendations in relation to enforcing civil judgments, including a wider choice in enforcement options and an enhanced garnishee system.[41] This included recommendations to permit a judgment creditor to attach debts that would or may become payable to a judgment debtor in the future.
[41] Explanatory Memorandum, Civil Judgments Enforcement Bill 2003 (WA), referring to the recommendations made by the Law Reform Commission of Western Australia in its 'Report on Enforcement of Judgments of Local Courts', project no 16 pt II (1995 LRC Report).
Relevantly, chapter 5 of the 1995 LRC Report made recommendations in relation to attachment of future debts as follows:
(iv)Future debts
5.12If the dealings between the judgment debtor and the garnishee are such that a debt may become owing or accruing from the garnishee, the future debt cannot be attached. This is so even though in the ordinary course a debt will become payable to the debtor. Only present debts are attachable. Subject to the limitations in the following paragraph, the Commission recommends that the scope of attachment should be expanded to permit a judgment creditor to attach future debts of the judgment debtor. This would include but not be confined to conditional debts. … Subject to existing rights of third parties, the judgment creditor should have an overriding right to payment at the time a future debt becomes due and owing. …
5.13…
(a)To provide some certainty, it should be limited to entitlements that might reasonably be expected to arise out of a legal relationship existing between the judgment debtor and the proposed garnishee at the time the attachment order is made. … It would also include a judgment debtor's possible future entitlement arising out of a cause of action for damages for personal injury or other damage …
(footnotes omitted)
It was accepted before the magistrate,[42] and on the hearing of the appeal, that the relevant 'available debt' in this case is an obligation that may arise in respect of an existing cause of action under s 46(1)(c) of the CJE Act.[43]
[42] Magistrates Court ts 27; Appeal book, pages 27 ‑ 28.
[43] Appeal ts 5, Appeal ts 8 - Appeal ts 11.
The appellant's position was more clearly articulated in the appeal, which is to the effect that rather than the 'available debt' being treated as an obligation that may arise in respect of a cause of action, it has erroneously been treated as an established liability. That is, it has been treated as a debt that has crystalised and is immediately due and payable, as opposed to one that may arise but for which the appellant's liability is yet to be determined.[44] This led to the judgment creditor obtaining a property (seizure and sale) order. Enforcement of the judgment was subsequently suspended. That is not a matter the subject of this appeal, but understandably appears to have caused the appellant some concern.
[44] Appeal ts 12 - Appeal ts 16, Appeal ts 18, Appeal ts 55.
The appellant accepts that a debt appropriation order may be made in relation to a debt that may arise in respect of an existing cause of action, and does not dispute the existence of a cause of action. What it cavils with is the ability to enforce the order until such debt, or any liability to pay money in respect of the cause of action, has been established.[45]
[45] Appeal ts 54 - 57.
It appears that, ultimately, at the heart of this matter, is the way in which the debt appropriation order itself has been worded. It was submitted on behalf of the appellant that the form of the debt appropriation order[46] is such that it treats the 'available debt' as being payable immediately, rather than if, and when, it becomes payable to the judgment debtor.[47] It was submitted on behalf of the judgment creditor that, in large part, it appears the appeal turns on the proper construction of the debt appropriation order.[48]
[46] Appeal book, page 407.
[47] Appeal ts 13 - Appeal ts 14.
[48] Appeal ts 35.
The debt appropriation order dated 23 April 2021 is addressed to the appellant and is in the following terms:
…
Upon the application of the judgment creditor you are ordered to:
1.Pay to the judgment creditor the debt or amount standing to the credit of the judgment debtor of $3,715.72 plus interest at 6% per annum on the judgment sum of $3,387.22 from 4 March 2020 to final payment, due from you to the judgement debtor or so much of it as may be sufficient to satisfy the judgment after deducting such amount (if any) as may be notified in writing to you by the judgment creditor or the registrar as having been paid or credited to the judgment creditor on account of that unpaid amount otherwise than under the order.
2.You are to make payment to the judgment creditor within seven days after the day of service of the order on the third person;
OR
Within seven days after the day or days on which the appropriated debt becomes due and payable to the judgment debtor.
3.You are entitled to retain expenses for obeying the order of $10.00 for the first payment and $5.00 for any subsequent payment from the available debt before paying the balance of it to the judgment creditor.
…
It appears the debt appropriation order follows the standard form. In my view, though the wording could have been clearer, it should be readily discernible to the parties in the circumstances in which the order was sought and made that the first 'option' in order 2 does not apply. Rather, in this case, the appropriated debt is an available debt under s 46(1)(c) of the CJE Act. As such, in circumstances where the appropriated debt is an obligation of the appellant to pay money to the judgment debtor which may arise under an existing cause of action, it follows that it is the second option in order 2 that applies. That wording is consistent with s 51(3)(b) of the CJE Act, which applies to the time for payment of an appropriated debt that is not due and payable to the judgment debtor at the time the debt appropriation order is made.
Properly construed, therefore, any obligation of the appellant to pay the amount stated in order 1 does not arise, and the appellant is not required to pay it to the judgment creditor, until seven days after the day on which the appropriated debt becomes due and payable to the judgment debtor. That is, once a determination has been made in favour of the judgment debtor in respect of any claim brought by him, or on his behalf, in relation to the cause of action.
I accept the judgment creditor's submissions in the appeal to the effect that the wording of the debt appropriation order does not alter the position that there was an available debt in relation to the judgment debtor at the time the debt appropriation order was made.
There was an available debt of the kind prescribed in s 46(1)(c) of the CJE Act at the time the debt appropriation order was made, and no basis upon which the learned magistrate could allow the appellant's objection. The appellant has not demonstrated error as contended in Ground 1. This ground is not made out and fails.

Grounds 2 - 4

Given my conclusion in relation to Ground 1 it is not necessary to resolve Grounds 2 - 4.
Further, as stated, the matters raised in relation to the proper construction of the Rental Agreement and whether the judgment debtor breached its terms, are matters that may give rise to a defence to the claim to which the cause of action relates. They are not matters that were required to be determined for the purpose of deciding whether there was an available debt and in deciding the appellant's Application.
Though, it is not necessary for me to address the matters raised by appeal Grounds 2 - 4, in my view, the learned magistrate did not err in law, or in fact, as contended in those grounds.

Ground 2

In its written submissions and at the hearing before the magistrate, it was contended on behalf of the appellant, in effect, that (amongst other reasons), the judgment debtor was not entitled to damage cover because he had breached the Rental Agreement by using or driving the vehicle contrary to the terms of the Rental Agreement. In particular, the appellant relied on the following:
2UNAUTHORISED AND PROHIBITED USE
…
2.2Circumstances in which and/or for which the Vehicle must not be used:
…
(i)In a reckless or dangerous manner and/or illegal purpose for which an infringement notice may be issued by Police and/or Authorities, or when it is damaged or unsafe.
(j)In contravention of any legislation or regulations, in particular and legislation and regulations controlling vehicular traffic, however Use on the Uber platform by the authorised Uber driver - partner is acceptable.
…
The appellant submitted, in effect that, cl 2.2(j) should be construed to include driving in a way that was negligent as an unauthorised use of the hire vehicle.
Having considered submissions made as to the construction of cl 2.2(j), the learned magistrate did not accept the construction contended for by the appellant and held that cl 2.2(j) of the Rental Agreement should be read down so that it only apples if the hirer drove recklessly (rather than merely negligently). The appellant contends this was an error of law.
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.
If the intention was for the relevant provisions of the Rental Agreement to include negligent driving as an unauthorised or prohibited use or basis upon which damage cover would not apply, express words to that effect would have been included. The interpretation contended for by the appellant does not make commercial sense and would lead to a consequence that is capricious, unreasonable and unjust. It cannot have been the intention to produce such a result and it is not a construction that the language of the provision requires.
In any event, even if the learned magistrate erred as contended in Ground 2, such error would not operate to negate the existence of a cause of action at the time the debt appropriation order was made. It is a matter that goes to the issue of liability for damages in respect of a claim made under the cause of action.

Ground 3

As to the error asserted in Ground 3, the magistrate did not, in my view, err in law or in fact, by failing to find that by reason of negligent or reckless driving the second respondent had not acted within the terms and conditions of the Rental Agreement and the appellant was not required to grant damage cover under cl 4. The magistrate was not required to determine that issue and, quite properly and correctly, held he could not reach the conclusion contended for on the evidence before him.

Ground 4

Ground 4 was not addressed in any detail at the hearing of the appeal. However, for completeness, I am not satisfied that the learned magistrate erred in failing to hold that when the first respondent obtained the debt appropriation order, it failed to disclose relevant evidence as asserted in Ground 4.
The judgment creditor applied for the order in accordance with the procedure provided in the CJE Act and CJE Regulations. The judgment creditor's application for the debt appropriation order was supported by the First Mulligan Affidavit. Though not expressly stated which subsection of s 46 of the CJE Act the available debt fell within, it is evident from par 7 of the affidavit that the application related to an obligation that may arise to pay money under an existing cause of action, under s 46(1)(c) of the CJE Act.
Proper disclosure was made and all relevant and available evidence was before the court at the time of considering the application for and making the debt appropriation order, as set out in the judgment creditor's written submissions filed in relation to the appellant's Application.[53]
[53] Judgment creditor's written submissions filed 12 October 2021; Appeal book, pages 288 - 300, pars 40 ‑ 47, pages 298 - 300.
For the reasons stated, the appellant has not demonstrated error. The grounds of appeal are not made out. As such, the learned magistrate's decision dismissing the appellant's Application should be and is upheld.

Matters raised in first respondent's notice of intention

Having upheld the magistrate's decision dismissing the appellant's Application on the grounds relied upon by the magistrate, it is not necessary for me to determine the further grounds raised in the first respondent's notice of intention.

Conclusion and orders

For the reasons stated, the learned magistrate's decision dismissing the appellant's Application should be and is upheld. It follows that the appeal should be and is dismissed.
I will hear from the parties to the appeal as to costs. Subject to hearing from the parties, there does not appear to be any reason why the costs of the appeal, and of the appellant's Application, should not follow the event, and be paid by the appellant, to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

LDB
Associate to Judge Russell

30 JUNE 2023

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   KELBUSH PTY LTD -v- CLARK [2023] WADC 72 (S)
CORAM:   RUSSELL DCJ
HEARD:   ON THE PAPERS
DELIVERED          :   28 SEPTEMBER 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:

Costs - Magistrates Court appeal - Costs of appeal - Turns on own facts

Legislation:

District Court of Western Australia Act 1969 (WA), s 64
Magistrates Court (Civil Proceedings) Act 2004 (WA), s 43(7)(e)
Rules of the Supreme Court 1971 (WA), O 66 r 1(1)

Result:

Appellant to pay the first respondent's costs of the appeal and of the application

Appellant to pay the first respondent's costs of the hearing on 2 August 2023 and in relation to the costs of the appeal

Representation:

Counsel:

Appellant	:	No appearance
First Respondent	:	No appearance
Second Respondent	:	No appearance

Solicitors:

Appellant	:	Kennedy Vinciullo
First Respondent	:	McCabes
Second Respondent	:	Not applicable

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

Hughes v St Barbara Ltd [2011] WASCA 234 (S)
Kelbush Pty Ltd v Clark [2023] WADC 72
Northern Territory of Australia v Sangare [2019] HCA 25; (2019) 265 CLR 164
Oshlack v Richmond River Council (1998) 193 CLR 72
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388

RUSSELL DCJ:

Overview

These reasons should be read in conjunction with the reasons for decision in Kelbush Pty Ltd v Clark [2023] WADC 72, which I delivered on 30 June 2023, in relation to the appellant's appeal against the decision of Magistrate M Crawford dated 15 November 2021. For the reasons set out in those reasons, I upheld the learned magistrate's decision to dismiss the appellant's application to allow its objection to a debt appropriation order, and dismissed the appeal.
The parties have been unable to agree orders as to the costs of the appeal. At a hearing on 2 August 2023, the parties each agreed that the costs of the appeal and of that hearing be determined on the papers. They have each filed written submissions in support of the orders they contend ought to be made in respect of the costs of the appeal.
Though unsuccessful in the appeal, the appellant seeks an order that the first respondent pay the appellant's costs of the appeal, to be taxed if not agreed on the basis of alleged irregular or wrongful conduct on the part of the first respondent.
The first respondent denies any irregular or wrongful conduct, submits there is no reason to depart from the usual rule that costs should follow the event, and seeks an order that the appellant pay the first respondent's costs of the appeal, to be taxed if not agreed.
The second respondent took no part in the appeal.
For the reasons that follow:
1.I am not satisfied there has been any irregular or wrongful conduct by the first respondent or that there is any good reason to depart from the usual rule that costs follow the event.
2.The appellant, having been unsuccessful in the appeal and the application the subject of the appeal, should pay the first respondent's costs of the appeal and of the application, to be taxed if not agreed.
3.The costs of the hearing on 2 August 2023 and those relating to the costs of the appeal should also be paid by the appellant, to be taxed if not agreed.

Relevant principles relating to costs

The court may make orders relating to the costs of an appeal from a decision of the Magistrates Court and as to the costs in the Magistrates Court.[54]
[54] Magistrates Court (Civil Proceedings) Act 2004 (WA), s 43(7)(e).
The relevant principles relating to costs are well established and are not in dispute. The parties have each referred to them and to some of the authorities in their submissions. I do not repeat or refer to the submissions and authorities in detail in these reasons. I refer to and respectfully adopt the summary of those principles as set out in the judgment of the Court of Appeal in Strzelecki Holdings Pty Ltd v Jorgensen.[55]
[55] Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388 [48] - [52] (Murphy, Mitchell & Pritchard JJA).
A District Court judge has the same power in relation to the payment of costs as a judge of the Supreme Court.[56]
[56] District Court of Western Australia Act 1969 (WA) (DCA), s 64.
Costs are in the discretion of the court. The court's discretion to award costs must be exercised judicially but is otherwise unfettered. Without limiting the court's wide discretion as to costs, the starting point in relation to an award of costs is that costs will usually follow the event so that generally the court will order that the successful party to any action or matter recover their costs, as provided by O 66 r 1(1) of the Rules of the Supreme Court 1971 (WA) (RSC).[57]
[57] See also Oshlack v Richmond River Council (1998) 193 CLR 72 [21] - [22], [134]; Northern Territory of Australia v Sangare [2019] HCA 25; (2019) 265 CLR 164 [24] - [25]; Hughes v St Barbara Ltd [2011] WASCA 234 (S) [5].
As stated in the decision of the Court of Appeal in Strzelecki Holdings Pty Ltd v Jorgensen:[58]
… The Court may depart from the general rule that costs follow the event and modify a costs order to take into account matters such as any unreasonable conduct of a generally successful party, or to the failure of that party on one or more specific issues. The exercise of the discretion in that way is recognised by a number of rules in the RSC, together with the practice of the Court, and authority. So, for example, if the Court is of the opinion that the conduct of a successful party - either before or after the commencement of the litigation - has resulted in costs being unnecessarily or unreasonably incurred, the Court may deprive that party of costs, either wholly or in part, and it may further order that party to pay the costs of an unsuccessful party, either wholly or in part. …
(footnotes omitted)
[58] Strzelecki Holdings Pty Ltd v Jorgensen [50].

The submissions and evidence relied upon

The appellant relies on its written outline of submissions filed on 1 August 2023 and an affidavit sworn by Timothy Wayne Kennedy on 1 August 2023.
The first respondent relies on written outlines of submissions filed on 1 and 9 August 2023. It has not filed any affidavit evidence in relation to costs.
I have considered the submissions and the affidavit filed. I do not repeat or refer to them in detail in these reasons.
In summary, it is submitted on behalf of the appellant that 'the appeal was won on an interpretation of the debt appropriation order.' The appellant did not 'win' the appeal. It was unsuccessful. The magistrate's decision was upheld and the appeal was dismissed for the reasons set out in Kelbush Pty Ltd v Clark [2023] WADC 72.
The appellant raises a number of reasons why it contends that the conduct of the first respondent was such as to lead the appellant to continue the objection proceedings and to bring and pursue the appeal, the object of which was to prevent the seizure and sale order from being enforced.
It is submitted on behalf of the appellant that had the first respondent not actively sought and obtained the enforcement order, not actively pursued enforcement, or conceded that no debt was due and payable, the objection proceedings would not have continued, and the appeal would not have happened.
The appellant seeks to rely on conduct by the first respondent or his solicitors subsequent to the decision the subject of the appeal dismissing the appellant's application to allow its objection to the debt appropriation order.[59] The conduct referred to relates to steps taken by the first respondent to enforce the judgment debt and debt appropriation order after the magistrate dismissed the appellant's application and before the appeal was determined. There was no challenge in the appeal to those enforcement proceedings or to the dismissal of the appellant's application for a suspension order in relation to them.
[59] Appellant's outline of submissions dated 1 August 2023, pars 10 - 14; Affidavit of Timothy Wayne Kennedy sworn 1 August 2023, pars 5 - 18.
The appeal was unsuccessful. Having considered the authorities, including those referred to by the appellant, and the evidence it relies upon on the issue of costs, I am not satisfied that there has been wrongful or unreasonable conduct on the part of the first respondent that has resulted in costs being unnecessarily and unreasonably incurred, or any other basis upon which he ought to be deprived of his costs of the appeal and of the application, either wholly or in part.
I see no good reason to depart from the usual rule that costs should follow the event and that the unsuccessful party pay the successful party's costs.

Conclusion and orders

The appellant, having been unsuccessful in the appeal and the application the subject of the appeal, should pay the first respondent's costs of the appeal and of the application, to be taxed if not agreed.
The costs of the hearing on 2 August 2023 and those relating to the costs of the appeal should also be paid by the appellant, to be taxed if not agreed.
I therefore make the following orders:
1.The appellant to pay the first respondent's costs of the appeal and of the application in the Magistrates Court, to be taxed if not agreed.
2.The first respondent's costs of the hearing on 2 August 2023 and relating to the costs of the appeal to be paid by the appellant, to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

BN
Associate to Her Honour Judge Russell

28 SEPTEMBER 2023