Kelbush Pty Ltd v Clark - [2024] WASCA 130

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   KELBUSH PTY LTD -v- CLARK [2024] WASCA 130
CORAM:   BUSS P
VAUGHAN JA
DAVID AJA

HEARD:   9 SEPTEMBER 2024
DELIVERED          :   31 OCTOBER 2024
FILE NO/S:   CACV 92 of 2023
BETWEEN:   KELBUSH PTY LTD
Appellant
AND
JARED CLARK
First Respondent
SLOBADAN MANJENCIC
Second Respondent

ON APPEAL FROM:
Jurisdiction              :   DISTRICT COURT OF WESTERN AUSTRALIA
Coram:   RUSSELL DCJ
Citation: KELBUSH PTY LTD -v- CLARK [2023] WADC 72
File Number            :   APP 90 of 2021

Catchwords:

Debt appropriation order against third person - Civil Judgments Enforcement Act 2004 (WA) - Third person alleged to have provided damage cover through a rental car agreement - Meaning of 'available debt' - Where obligation may arise in respect of an existing cause of action - Where appropriated debt was not yet due and payable - Objection on the basis that appropriated debt does not or will not exist - Construction of a court order - Court order to be read in context and surrounding circumstances - Appeal dismissed

Legislation:

Civil Judgments Enforcement Act 2004 (WA), s 45, s 46, s 49, s 50, s 51, s 52, s 54(1)(b), s 55
Civil Judgments Enforcement Regulations 2005 (WA), r 103(1)

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant	:	G R Hancy
First Respondent	:	L N Firios
Second Respondent	:	No appearance

Solicitors:

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

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

Clark v Manjencic (Unreported, MCWA, 15 November 2021)
Clyne v Deputy Commissioner of Taxation [1981] HCA 40; (1981) 150 CLR 1
Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2] [2023] WASCA 108
Kelbush Pty Ltd v Clark [2023] WADC 72

JUDGMENT OF THE COURT:

Overview

This appeal concerns the validity of a debt appropriation order made pursuant to s 49 of the Civil Judgments Enforcement Act 2004 (WA).
The appellant, Kelbush Pty Ltd trading as Northside Rentals (Northside), is the recipient of the debt appropriation order. The debt appropriation order was issued on the application of the first respondent, Jared Clark, who we will refer to as the 'judgment creditor'. The 'judgment debtor' is Slobadan Manjencic, the second respondent.
The judgment creditor obtained a judgment debt of $3,387.22 against the judgment debtor out of the Magistrates Court at Perth on 3 March 2021. Subsequently the judgment creditor sought and obtained the debt appropriation order. Northside objected to the debt appropriation order. A later application to the Magistrates Court for an order that the objection be allowed was dismissed.[1] So too was an appeal from that order to the District Court of Western Australia.[2] This appeal is an appeal against the order of the District Court.
[1] Clark v Manjencic (Unreported, MCWA, 15 November 2021) (Magistrate's reasons).
[2] Kelbush Pty Ltd v Clark [2023] WADC 72 (DCWA reasons).
Two primary issues arise on the appeal. First, Northside contends that the existence of an available debt is not a sufficient basis for disallowing an objection to the debt appropriation order (ground 1.1). Second, Northside contends that the debt appropriation order was irregular (ground 1.2). There is also an issue about the proper construction of a rental agreement between Northside and the judgment debtor.
For the reasons that follow the appeal should be dismissed.

Factual and procedural background

Northside carries on a motor vehicle hire business. In November 2018 the judgment debtor hired a Nissan X‑Trail from Northside. The parties entered into a rental agreement entitled 'Rideshare Rental Vehicle Agreement' dated 23 November 2018. Clause 4 of the rental agreement was headed 'Damage Cover'. It provided:
If you act within the terms and conditions of this Agreement [ie the rental agreement] the Company [ie Northside] will grant Damage Cover … for the Hirer's [ie the judgment debtor'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. (emphasis added)
The damage cover was subject to various exclusions. It is not necessary to specify the exclusions. Relevantly, however, the rental agreement provided in cl 2 for 'Unauthorised and Prohibited Use'. By cl 2.2 the circumstances in which and/or for which the vehicle must not be used included:
(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 any legislation and regulations controlling vehicular traffic, however Use on the Uber platform by the authorised Uber driver - partner is acceptable.
On 15 July 2020, when driving the Nissan X‑Trail, the judgment debtor was involved in a motor vehicle accident with the judgment creditor. The magistrate who dismissed Northside's application for an order that its objection to the debt appropriation order be allowed found that the judgment debtor must have driven the vehicle in a negligent manner.[3] However, his Honour was not satisfied that the judgment debtor drove the vehicle in a reckless manner.[4] On 2 October 2020 the judgment creditor commenced proceedings against the judgment debtor in the Magistrates Court. The judgment creditor claimed damages alleged to have been caused by the negligent driving of the judgment debtor. 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.
[3] Magistrate's reasons [34].
[4] Magistrate's reasons [34].
On 13 April 2021 the judgment creditor applied for a debt appropriation order. The Form 6 application for the debt appropriation order identified Northside as the relevant 'third person'. The application was supported by an affidavit sworn 13 April 2021 by the judgment creditor's solicitor. The solicitor deposed that the judgment creditor brought the application for a debt appropriation order on the basis that: (1) the rental agreement offered by Northside to its customers included a loss/damage waiver which acted as an indemnity for damage to a third party's property; (2) an obligation had arisen on the part of Northside to indemnify the judgment debtor for the judgment debt; and (3) the third party's obligation to indemnify the judgment debtor was an 'available debt' within the meaning of s 46 of the Civil Judgments Enforcement Act.
A registrar of the Magistrates Court granted the debt appropriation order on 23 April 2021. A copy of the debt appropriation order is attached as annexure 'A' to these reasons. Relevantly to the appeal, par 1 of the debt appropriation order ordered Northside to pay to the judgment creditor the debt or amount standing to the credit of the judgment debtor of $3,715.72 (plus interest) due by Northside to the judgment debtor. The debt appropriation order went on to state at par 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. (original emphasis)
The specification of two different 'options' for the time for payment is something which grounds Northside's appeal in this court.
Northside objected to the debt appropriation order. The specified ground for the objection was that the appropriated debt 'does not and will not exist' (ie the ground of objection provided for in s 54(1)(b) of the Civil Judgments Enforcement Act). Northside stated in support of the objection that: (1) Northside does not owe the debt; (2) the judgment debtor's damage cover was voided due to breaches in the terms and conditions of the rental agreement; and (3) no indemnity was included in the rental agreement.
The judgment creditor's solicitors subsequently informed Northside by email that the judgment creditor would not allow the objection. Thereafter Northside lodged an application to the Magistrates Court seeking an order that its objection to the debt appropriation order be allowed.
Despite being aware of Northside's objection, the judgment creditor applied for and obtained a property (seizure and sale) order against Northside. It became necessary for Northside to apply for and obtain an order suspending enforcement pursuant to the property (seizure and sale) order.
Northside's objection application was heard by Magistrate Matthew Crawford on 15 October 2021. The magistrate published written reasons on the application on 15 November 2021. The magistrate found that the objection should be dismissed and made orders accordingly. Northside appealed from that order to the District Court. The appeal was made pursuant to s 40(1) of the Magistrates Court (Civil Proceedings) Act 2004 (WA).
Before the District Court appeal was heard the judgment creditor demanded payment of the appropriated debt. Thereafter Northside sought a further suspension order and also applied to set aside the property (seizure and sale) order. Northside's application for a suspension order was dismissed. The judgment creditor again demanded payment of the appropriated debt and threatened to proceed with the property (seizure and sale) order if payment was not made. On 18 March 2022 Northside paid the appropriated debt. At that time the appeal to the District Court was yet to come on for hearing.
On 30 June 2023 Russell DCJ published written reasons dismissing Northside's appeal against the Magistrates Court's order dismissing the objection to the debt appropriation order. Northside then appealed to this court pursuant to s 42(1) of the Magistrates Court (Civil Proceedings) Act.

Statutory framework

The Civil Judgments Enforcement Act provides for a debt appropriation order as one means of enforcing a judgment debt.
The process of applying for and effect of a debt appropriation order is governed by div 5 of pt 4 of the Civil Judgments Enforcement Act. The Explanatory Memorandum to the Bill that introduced the Act explained that a 1995 Law Reform Commission of Western Australia report[5] had identified limitations to the effectiveness of the existing garnishee procedures then used in Western Australian courts to attach debts in aid of execution.[6] Among those deficiencies was a requirement in garnishee proceedings that a debt was only attachable if it was an 'actual present debt'.[7] The Civil Judgments Enforcement Act extended debt appropriation as a means of judgment enforcement beyond actual present debts by allowing a debt appropriation order to be made in relation to an 'available debt' as defined in s 46 of the Act.
[5] The Law Reform Commission of Western Australia, Enforcement of Judgments of Local Courts (Project No 16 - Part II) (December 1995) (LRCWA 1995 Report).
[6] Explanatory Memorandum to the Civil Judgments Enforcement Bill 2003 (WA) 14.
[7] LRCWA 1995 Report pars 5.1, 5.5.
Division 5 of pt 4 of the Civil Judgments Enforcement Act introduced an entirely new regime for appropriating debts that are owing or will or may be owing to a judgment debtor. The regime is substantially based on the recommendations of the LRCWA 1995 Report - one of the recommendations was that the range of debts that can be attached should be expanded including to make all debts attachable whether present, future, joint or State Crown debts (subject to specified limitations).[8] The regime also provides for the adoption of a more direct procedure that is largely consistent with the recommendations of the LRCWA 1995 Report.[9]
[8] LRCWA 1995 Report par 5.6. See also pars 5.9 - 5.25.
[9] LRCWA 1995 Report pars 5.27 - 5.32.
Where a future debt is attached the recommendation in the LRCWA 1995 Report was that the judgment creditor should have a right to payment at the time that the future debt becomes 'due and payable'.[10]
[10] LRCWA 1995 Report par 5.12. See also pars 5.22, 5.30.
A key concept in div 5 of pt 4 of the Civil Judgments Enforcement Act is that of an 'available debt'. By s 46(1) such 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. (emphasis added)
There are various exclusions in s 46(2). None of them are relevant to the present appeal. One significant exclusion is that earnings that are or may be payable to a judgment debtor are not an available debt.
A common feature of the various kinds of available debt pursuant to s 46(1) is that there must be an obligation on the part of a person to pay money to the judgment debtor. An available debt is 'any obligation' to pay money 'which obligation' meets one of the criteria in sub‑pars (a) ‑ (d) at the time a debt appropriation order is made. Accordingly, such an obligation is at the core of an 'available debt' for purpose and within the meaning of s 46(1).
The obligation need not be in existence as a current and subsisting immediately enforceable obligation to pay money at the time that the debt appropriation order is made. The definition of 'available debt' includes obligations which are in existence at the time a debt appropriation order is made but also encompasses obligations to pay money which will or may arise at a later time. Section 46(1)(a) concerns an available debt of the former kind - it requires an obligation which 'is' current and unconditional at the time that the debt appropriation order is made. By contrast s 46(1)(b) and (c) concern an available debt of the latter kind - they require an obligation which either 'will arise' or 'may arise'. Section 46(1)(d) is concerned with an obligation that is 'likely to arise'.
This appeal is concerned with the kind of available debt provided for in s 46(1)(c).
At all times Northside accepted that there was an available debt within the conception of an available debt as specified in s 46(1)(c).[11] In other words there was, relevantly and in effect, an obligation by Northside to pay money to the judgment debtor which 'may arise' in respect of an 'existing cause of action'. A cause of action existed in relation to the judgment debtor's damage cover claim against Northside pursuant to cl 4 of the rental agreement. However, as counsel for the Northside emphasised before this court, there had been no determination as to whether the obligation to pay money did arise.[12] There was only a potential obligation on the part of Northside to pay money to the judgment debtor which 'may arise' in respect of that existing cause of action.
[11] Appeal ts 5 - 6, 26 - 27; appellant's submissions par 13 WAB 7.
[12] Appeal ts 6.
Section 49(1) allows a judgment creditor to apply for a debt appropriation order. It states:
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. (emphasis added)
Section 49(1) contemplates a debt appropriation order being applied for in relation to three classes of person: a person who owes an available debt to the judgment debtor; a person who will owe an available debt to the judgment debtor; and a person who may owe an available debt to the judgment debtor. There is a broad congruency between those three classes of persons and the categories of available debt specified in s 46(1). An obligation under s 46(1)(a) to pay money which obligation 'is' current and unconditional involves a person who 'owes' an available debt. An obligation under s 46(1)(b) to pay money which obligation 'will arise' involves a person who 'will' owe an available debt. An obligation under s 46(1)(c) to pay money which obligation 'may arise' involves a person who 'may' owe an available debt. So too does an obligation under s 46(1)(d) to pay money which obligation is likely to arise.
Importantly, the order that may be applied for under s 49(1) is confined to an order that the available debt be paid to the judgment creditor at the time when the available debt would otherwise be paid to the judgment debtor. Nothing in s 49(1) contemplates an order bringing forward and requiring immediate payment of a potential obligation to pay the available debt.
Subject to various limitations, none of which are presently relevant, the court may make an order of the kind referred to in s 49(1) (s 49(2)). The order is referred to as a 'debt appropriation order' (s 3). An 'appropriated debt' is, unless the contrary intention appears, the available debt (or the portion of an available debt) to which a debt appropriation order applies (s 45). The 'third person' in relation to a debt appropriation is the person to whom the order is addressed (s 45).
Section 50 deals with the content and service of a debt appropriation order. As to content, by s 50(1) the debt appropriation order is to:
(a) be addressed to the person who owes or will or may owe the available debt; and
(b)state the name and address of the judgment debtor and the judgment creditor; and
(c)state the judgment debt as at the date of the order; and
(d)identify the available debt to which the order applies; and
…
(f)order the third person to pay the judgment creditor:
(i)the whole of the appropriated debt; or
(ii)such of the appropriated debt as will satisfy the judgment debt,
as the case requires, after retaining any amount to which the third person is entitled under section 53(1); and
(g)contain any other information that is prescribed by the regulations. (emphasis added)
Section 50(1), like s 49(1), uses the formulation of a person who 'owes or will or may owe' an available debt. It too recognises the possibility that at the time that the debt appropriation order is made the obligation to pay money that founds the available debt (and the debt appropriation order) may only be an obligation that 'will' or 'may' arise (ie it may be a potential obligation).
The Civil Judgments Enforcement Regulations 2005 (WA) do not prescribe any other information to be provided in a debt appropriation order. The Act does, however, authorise regulations whereby the 'chief executive officer'[13] may approve the forms of applications, orders and other documents required for the purpose of the Act (s 119(2)(c)). The Regulations contain such an authorisation (reg 103(1)). Numerous forms of applications, orders and other documents have been so approved. These include, by Form 18, the form of order for a debt appropriation order.
[13] A term defined in s 5 of the Interpretation Act 1984 (WA) (relevantly the chief executive officer of the agency principally assisting the minister administering the Civil Judgments Enforcement Act).

At the appeal hearing there was considerable debate as to whether the debt appropriation order the subject of the appeal was substantially in the terms of the approved form for a debt appropriation order. Eventually counsel for Northside accepted that the court could proceed on the basis that the pro‑forma Form 18 was approved under reg 103(1).[14] It being so accepted it follows that the debt appropriation order as issued to Northside on the application of the judgment creditor was substantially in the form of Form 18 as approved under reg 103(1) for the purposes of the Civil Judgments Enforcement Act.
[14] Appeal ts 21.
A debt appropriation order takes effect when it is served on the third person (s 51(1)). Subject to certain matters, none of which are presently relevant, the debt appropriation order has effect according to its contents (s 51(2)). By s 51(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.
Importantly, s 51(3) provides for alternatives as to when the third person must pay the appropriated debt. The alternatives depend on whether the appropriated debt is 'due and payable' at the time the debt appropriation order was made. If the appropriated debt is immediately due and payable it is to be paid by the third person to the judgment creditor within 7 days after service of the debt appropriation order (s 51(3)(a)). If the appropriated debt is not yet due and payable at the time the debt appropriation order was made it must be paid by the third person to the judgment creditor within 7 days after the debt appropriation order becomes due and payable (s 51(3)(b)).
Section 51(3)(b) thus accommodates those circumstances in which the obligation that founds the available debt (and the debt appropriation order) is an obligation that 'will' or 'may' arise at the time that the debt appropriation order is made.
The purported[15] appropriated debt was not due and payable by Northside to the judgment debtor at the time that the debt appropriation order was made. At the most there was an available debt in the form of an obligation to pay money that may arise in respect of an existing cause of action. Accordingly, the time for payment was as provided for by s 51(3)(b) - Northside, as third person, was bound to pay the appropriated debt to the judgment creditor within 7 days after the appropriated debt became due and payable to the judgment debtor.
[15] We have used the word 'purported' because Northside challenged whether the appropriated debt existed.
Failure to obey a debt appropriation order may result in an enforcement order (s 56). Payment by a third person to a judgment creditor under a debt appropriation order discharges the third person from the obligation to pay that amount to the judgment debtor (s 57).
The third party also has various obligations. These include, under s 52(1), an obligation to provide a written notice where, among other things, the appropriated debt 'is not or will not be or may not be' due and payable until more than 7 days after the debt appropriation order is served. The third party must give the judgment creditor a written notice stating 'the date on which the appropriated debt, or any part of it, is or will be or may be due and payable' (emphasis added).
Northside did not give any notice in accordance with s 52(1). Northside said that doing so would have been inconsistent with its objection. That may be so. But the apparent inconsistency does not obviate the necessity for a notice where such a notice is required by the statute. Here, as will be seen, Northside was required to give notice under s 52(1).
The third person may object to the debt appropriation order (s 54). There are three prescribed grounds under s 54(1):
(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 judgment debtor.
In its objection to the debt appropriation order, Northside relied on the ground in s 54(1)(b) - ie that the appropriated debt does not and will not exist.
It will be necessary to return to s 54(1)(b) in addressing ground 1. For now, however, it should be observed that s 54(1)(b), like s 54(1)(a), draws attention to the 'appropriated debt'. The appropriated debt is the available debt to which the debt appropriation order applies (s 45). That available debt should be discernible from the terms of the debt appropriation order. The contents of the debt appropriation order are to identify the available debt to which the order applies (s 50(1)(d)).
It might be thought that there is a disconformity between s 54(1)(b)'s formula that the appropriated debt 'does not and will not' exist and the various earlier formulations as to an available debt or appropriated debt that is or will be or may be owed (see eg s 46(1), s 49(1), s 49(4), s 50(1)(a), s 52(1)). The disconformity is revealing. A permissible objection to the effect that an appropriated debt 'may not' exist would impact on the effectiveness of a debt appropriation order in respect of those kinds of available debts in s 46(1)(a) or (b). It would render virtually illusory any debt appropriation order in respect of the kind of available debt in s 46(1)(c). To say that an obligation 'may arise' in respect of an existing cause of action is almost always to accept that an obligation also 'may not arise' in respect of an existing cause of action. The use of 'does not and will not' exist in s 54(1)(b) requires the recipient of the debt appropriation order to negate both the current existence and the potential future existence of an obligation on its part to pay money to the judgment debtor.
A judgment creditor served with an objection may allow the objection (s 55(1)). If, however, the judgment creditor does not do so the third person, among others, may apply to the court for an order that the objection be allowed (s 55(2)). The court may then allow or reject the objection (s 55(4)).
The Civil Judgments Enforcement Act does not make express provision for how the court is to approach the hearing of an application for an order that an objection to a debt appropriation order be allowed. The nature of the hearing will depend on the ground of the objection and the kind of available debt that underpins the debt appropriation order. In this case the relevant ground was that in s 54(1)(b) and the available debt was of the kind mentioned in s 46(1)(c). As the available debt is of the kind mentioned in s 46(1)(c) there is no current obligation. Accordingly, in this situation the critical question for the court will be whether the appropriated debt will not exist - it requires the recipient of the debt appropriation order to establish to the satisfaction of the court that the obligation to pay money which it is said 'may arise in respect of an existing cause of action' will in fact never come into existence.

The litigation in the lower courts

Before the magistrate Northside contended that the appropriated debt does not and will not exist.
Northside accepted that there was an 'available debt' within the terms of s 46(1)(c). However, it was argued that there was not and would never be 'a debt'. In the latter respect Northside relied on the terms of the rental agreement. A number of matters were raised before the magistrate. All were rejected. The only matter relied on before the magistrate that remains relevant to the issues in this appeal was a contention that the circumstances of the motor vehicle accident were such that the judgment creditor breached cl 2.2(j) of the rental agreement meaning that, in terms of cl 4, the judgment debtor had not 'act[ed] within the terms of the [rental agreement]'. In that respect Northside argued that the damage cover in cl 4 did not cover the judgment debtor for negligent driving.
The magistrate dismissed the objection application holding that:
1.So far as there was an available debt as between the third person and the judgment debtor at the time the debt appropriation order was made - and that available debt remained in existence - it was not the case that the appropriated debt does not and will not exist. The appropriated debt was the available debt (or the portion of the available debt) to which the debt appropriation order applied.[16]
2.In any case, on its proper construction cl 2.2(j) of the rental agreement should be read down so that it applies only if the judgment debtor drove recklessly rather than merely negligently.[17]
[16] Magistrate's reasons [50](a). See also [12] - [17].
[17] Magistrate's reasons [40]. See also [18](b).
Northside's appeal to the District Court relied on four grounds. Only two are relevant to the present appeal. As to the grounds that are relevant to the present appeal, Northside argued that the magistrate erred in law:[18]
1.In holding that the objection must fail if an available debt existed at the time of the debt appropriation order.
2.In holding that cl 2.2(j) of the rental agreement should be read down so that it only applies if the judgment debtor drove recklessly.
[18] DCWA reasons [25].
The primary judge upheld the reasoning and conclusion of the magistrate on both matters.[19] The primary judge also observed, correctly in the context of the conclusions her Honour had reached, that given the conclusion rejecting the first ground it was not necessary to resolve the second ground.[20] This observation was consistent with the primary judge's view that the questions raised as to whether the judgment debtor was in breach of the rental agreement were matters for determination at a later date. According to the primary judge, all that 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)(c) at the time when the debt appropriation order was made.[21]
[19] As to ground 1 see DCWA reasons [47] - [48], [50] - [59], [66] - [67]. As to ground 2 see DCWA reasons [71] - [80].
[20] DCWA reasons [68], [70].
[21] DCWA reasons [46]. See also [69], [81].
It follows that the primary judge's conclusion on the proper construction of the rental agreement was strictly by way of obiter dicta. That was also the case for the like conclusion of the magistrate. In written submissions in this court the judgment creditor accepted, quite properly, that the determination as to the proper construction of cl 2.2(j) of the rental agreement was no more than obiter dicta.[22] So too did counsel for Northside at the appeal hearing.[23]
[22] First respondent's submissions par 28 WAB 21.
[23] Appeal ts 3.
Another issue emerged in the appeal to the District Court. Northside challenged the judgment creditor's entitlement to enforce the debt appropriation order where Northside's liability in relation to the cause of action the subject of the available debt had yet to be established. The primary judge stated that this issue concerned, at its heart, the contents of the debt appropriation order. Northside complained that, as a matter of form, the debt appropriation order treated the available debt as being payable immediately rather than if and when it became due and payable to the judgment debtor.[24]
[24] DCWA reasons [60] - [61].
The primary judge held that, properly construed, the first option in par 2 of the debt appropriation order did not apply - it thereby followed that the second option in par 2 did apply (those two options being the statement above and below the word 'OR' as reproduced at [10] above).[25]
[25] DCWA reasons [64] - [65].

Grounds of appeal

Ground of appeal 1 is concerned with the proper construction of the material provisions of the Civil Judgments Enforcement Act and the form of the debt appropriation order. It states:
The learned primary Judge erred in law in:
1.1Holding that an objection to a debt appropriation order must fail if an available debt, in this case being 'an obligation on the part of the appellant to pay money to the judgment debtor may arise in respect an existing cause of action' [sic], existed at the time of a debt appropriation order: At Reasons for Decision (RFD) [47], [48], [52], [53], [59], [66] and [81];
1.2Failing to find that the debt appropriation order was irregular because it included requirements that [Northside] pay [the judgment creditor] the amount of [the judgment debtor's] debt immediately or within seven days of service of the order on [Northside]: RFD [64] and [65].
Ground of appeal 2 is concerned with the proper construction of the rental agreement. It states:
The learned primary Judge erred in law in holding that clause 2.2(j) of the Rental Agreement should be read down so that it only applies if the hirer drove recklessly: RFD [25 2.], [73], [76].

Disposition: ground 1 - the debt appropriation order

Northside complained that the debt appropriation order resulted in enforcement proceedings, in the form of the property (seizure and sale) order, even though it had not been established that the appropriated debt was due and payable to the judgment debtor. There is considerable force in that complaint. But it is not a matter for this appeal. There was no appeal against the property (seizure and sale) order. The appeal is against the order of the District Court dismissing the appeal against the order of the Magistrates Court rejecting Northside's objection to the debt appropriation order. The subject matter of the appeal is confined to Northside's objection to the debt appropriation order - an objection that the appropriated debt does not and will not exist.
Counsel for Northside submitted that grounds 1.1 and 1.2 were interlinked.[26] It is, however, necessary to start somewhere. We will start with ground 1.1.
[26] Appeal ts 8.
By ground 1.1 Northside contends that the primary judge erred in holding that an objection to a debt appropriation order must fail if an available debt existed at the time of the debt appropriation order. That finding must be understood in the particular context of the present case - one where the available debt relied on was an available debt of the kind mentioned in s 46(1)(c) and it was common ground that there was such an available debt at the time that the debt appropriation order was made.
In support of ground 1.1 Northside disputed that the existence of an available debt was a sufficient basis for disallowing an objection to the debt appropriation order. Counsel for Northside sought to distinguish between the indefinite article of 'an' available debt and the definite article of 'the' appropriated debt. Counsel for Northside submitted that the issue was not whether there was an available debt - instead the objection procedure drew attention to the content of the debt appropriation order as made and whether the appropriated debt the subject of the debt appropriation order does not or will not exist.[27]
[27] Appeal ts 3 - 4, 8, 24.
The suggested distinction is one of no significance to the task that was before the magistrate on the initial application and to the task that was before the primary judge on appeal.
There are, as Northside states, various references to 'an' available debt (see eg s 45, s 46(1), s 49(1)). So too there are references to 'the' appropriated debt (see eg s 50(1)(f), s 51(3)(b), s 52(1), s 54(1)(a) and (b)). When the statutory provisions are read in context the use of the indefinite and definite articles at various places throughout the Act is simply grammatical. For example, in s 49(1) there is an initial reference to 'an' available debt because at that point the statutory provision is dealing with an available debt as a matter of generality rather than a particular available debt. Then, however, s 49(1) goes on to refer to 'the' available debt. That is because the available debt has been identified in terms of a specific available debt. The same distinction is apparent in the use of 'the' appropriated debt in s 54(1)(a) and (b). The reference there is to a specific appropriated debt the subject of a debt appropriation order.
Before the magistrate and then on appeal to the primary judge Northside accepted that there was an available debt in terms of s 46(1)(c).
The power under s 49 of the Civil Judgments Enforcement Act to make a debt appropriation order is enlivened by the existence of an available debt. The concession that there was an available debt meant that the Magistrates Court was empowered to make a debt appropriation order. It also meant that Northside's objection was misconceived. That follows from the terms of the objection and the Civil Judgments Enforcement Act.
Northside's objection was on the s 54(1)(b) ground that 'the appropriated debt does not and will not exist'. The 'appropriated debt' is, relevantly and in effect, the 'available debt' to which the debt appropriation order applies (s 45). So understood the inquiry raised by s 54(1)(b) is concerned with whether the putative obligation alleged to ground the available debt relied on for the making of the debt appropriation order does not and will not exist. An objection on the ground in s 54(1)(b) must fail if it is found that the current or potential obligation to pay money to the judgment debtor relied on for the debt appropriation order does exist or will exist. So too the objection must fail if such an obligation to pay money may arise in respect of an existing cause of action. For if it is the case that an obligation to pay money to the judgment debtor may arise the objector necessarily fails to discharge its onus of negating the potential future existence of an obligation on its part to pay money to the judgment debtor.
In these circumstances, Northside having conceded that there was an available debt in terms of s 46(1)(c), it followed that Northside's objection inevitably failed. The concession was incompatible with Northside establishing that the appropriated debt will not exist. Ground 1.1 fails.
While, for these reasons, ground 1.1 fails, as developed at the appeal hearing Northside's true complaint was directed to the content of the debt appropriation order as issued in this case. There was, as counsel for Northside put it, an objection to the appropriated debt which is the available debt to which the debt appropriation order applies.[28] Northside challenged the existence of the appropriated debt as identified in the debt appropriation order as made by the Magistrates Court. Northside accepted that there was a proper basis for a debt appropriation order against it but said that the order as made was deficient as a matter of form.[29] So understood Northside's complaint is one of form that is best addressed under the rubric of ground 1.2.
[28] Appeal ts 8. See also appeal ts 17.
[29] Appeal ts 16, 27, 29.
It might be questioned whether this complaint truly falls within Northside's objection. But the judgment creditor did not take any procedural point as to whether ground 1.2 was maintainable pursuant to the objection. The issue was fully argued by the parties. It is appropriate in the circumstances that this court consider and determine the point.
By ground 1.2 Northside contends that the debt appropriation order was irregular because it included a requirement that Northside pay the appropriated debt within 7 days after service of the order. In support of ground 1.2 Northside submitted that:
1.The judgment creditor had not established that any debt was due and payable by Northside to the judgment debtor.
2.Having regard to s 49(1), the content of the debt appropriation order should only have required Northside to pay the appropriated debt 'at the time or times when the available debt would otherwise be paid to the judgment debtor'.
3.A debt appropriation order should not have been issued with content that required payment within 7 days after service of the order.
4.The debt appropriation order treated the available debt as one that was due and payable - this content facilitated the issue of the property (seizure and sale) order despite it not having been established that Northside was in fact liable to pay money to the judgment debtor.

Counsel for Northside summarised the contention raised by ground 1.2 in terms that the appropriated debt disclosed by the debt appropriation order was not an available debt under s 46(1) of the Civil Judgments Enforcement Act.[30] This was said to be a debt appropriation order expressed in terms that there was an appropriated debt that was due and payable.[31] No such available debt either existed or would exist.[32] This explained, in Northside's submission, the objection to the appropriated debt as made by Northside.[33] The relevant available debt was of the kind mentioned in s 46(1)(c); but nothing in the terms of the debt appropriation order tied the appropriated debt to an obligation that may arise in respect of an existing cause of action.[34]
[30] Appeal ts 8.
[31] Appeal ts 9, 16.
[32] Appeal ts 12.
[33] Appeal ts 10.
[34] Appeal ts 11.
Other submissions were made in relation to ground 1.2. Counsel for Northside also submitted that:
1.The debt appropriation order did not identify whether Northside owed or will owe or may owe an obligation.[35]
2.The debt appropriation order did not identify the available debt to which the order applied because it did not identify the existing cause of action.[36]
3.The debt appropriation order did not comply with the terms of the Civil Judgments Enforcement Act insofar as it provided for 'hybrid' terms for payment in par 2 thereof (see [10] above).[37]
[35] Appeal ts 23.
[36] Appeal ts 23 - 26, 30.
[37] Appeal ts 22, 30.
The third point is a more specific submission in support of Northside's general contention by ground 1.2. The other two submissions recorded in [73] above cannot be accepted. First, both submissions exceed the scope of ground 1.2. Second, neither submission has a proper statutory basis. In contending that the debt appropriation order should have dealt with these two matters counsel for Northside relied on s 50(1)(a) and s 50(1)(d) respectively. Section 50(1)(a) does not require that a debt appropriation order identify whether the third person owed or will owe or may owe an obligation. It simply requires that the debt appropriation order be addressed to the third person. That requirement was satisfied. Nor does s 50(1)(d) require that the debt appropriation order identify any relevant existing cause of action. Section 50(1)(d) requires identification of the available debt to which the debt appropriation order applies. Again, that requirement was met. Paragraph 1 of the debt appropriation order identified the available debt to which the order applied.
Counsel for Northside prepared a form of debt appropriation order which was said to satisfy the terms of the Civil Judgments Enforcement Act.[38] There is, in our view, little assistance derived from reviewing that document. Counsel for Northside tailored the order to the specific circumstances pertaining to the judgment creditor, the judgment debtor and Northside. The form of debt appropriation order as prepared by Northside's counsel is one designed to satisfy a standard of perfection. Whether the debt appropriation order as issued met that standard is not the question before the court. The question for the court is whether the debt appropriation order was irregular because of the feature challenged by ground 1.2. That is not answered by comparing the debt appropriation order as issued with the form of order proposed by counsel for Northside.
[38] Appeal ts 32 - 33.
Ground 1.2 essentially challenges the primary judge's construction of the debt appropriation order. The primary judge held that the second option in par 2 of the order applied rather than the first option.[39] As the primary judge put it:
Properly construed, therefore, any obligation of [Northside] to pay the amount stated in order 1 does not arise, and [Northside] 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.[40]
[39] DCWA reasons [64].
[40] DCWA reasons [65].
The primary judge's construction of the debt appropriation order was correct. The primary judge's reasons for that construction are more than adequate to explain why her Honour's construction was correct. We will, however, say a little more given the matters raised by counsel for Northside in support of ground 1.2.
The parties did not refer the court to any applicable authorities on the construction of a court order. It suffices to refer to and adopt the principles recently summarised in Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2].[41] We will not repeat those principles. One matter of importance is that in determining the meaning of court orders, on their proper construction, it is permissible to have regard to context including surrounding circumstances.
[41] Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2] [2023] WASCA 108 [157] - [158].
Three contextual circumstances should be acknowledged. First, the judgment creditor was seeking a debt appropriation order pursuant to div 5 of pt 4 of the Civil Judgments Enforcement Act. The statutory provisions form part of the context for construing the order. Second, as will commonly be the case, the judgment creditor applied ex parte for the debt appropriation order. The application was determined on the papers. There was, in the circumstances, a real risk that the Magistrates Court was not fully informed of all of the material facts and circumstances relating to the alleged available debt. For example, the solicitor's affidavit in support of the application for the debt appropriation order did not address the time when the alleged available debt would otherwise be paid to the judgment debtor. Third, closely related to the previous matter, the debt appropriation order as made was in terms of the approved order in the form of Form 18. That is a standard order crafted to meet the statutory requirements of a debt appropriation order across the many applications made for a debt appropriation order in the courts of Western Australia every year. The standard order is self‑evidently designed to accommodate the varied scenarios that will commonly arise in relation to judgment enforcement by means of a debt appropriation order.
Turning, then, to the text of the debt appropriation order, the first thing to observe is that par 1 is the order requiring payment of the appropriated debt whereas par 3 allows for retention of certain expenses. These components of the debt appropriation order meet the content requirements of s 50(1)(d) and (f) of the Civil Judgments Enforcement Act.
Paragraph 2 of the debt appropriation order then reflects the terms of s 51(3) of the Act by specifying the time when payment is to be made. Consistently with s 51(3), par 2 of the debt appropriation order provides for two alternatives. Payment is to be made either within 7 days after service of the order (consistently with the alternative in s 51(3)(a)) or, if the appropriated debt is not yet due and payable, within 7 days after the day on which the appropriated debt becomes due and payable (consistently with the alternative in s 51(3)(b)). The application of the two alternatives is initially a matter for the third person as the recipient of the debt appropriation order. Providing for the timing of the payment obligation in this way is consistent with the statutory context and the other contextual matters we have referred to. It accommodates the possibilities that may arise in circumstances where the court issuing the debt appropriation order cannot be certain about the time when the appropriated debt would otherwise be paid to the judgment debtor.
That understanding of the effect of par 2 of the debt appropriation order is confirmed by the notice to the third person of its obligations under the debt appropriation order. The notice follows and forms part of the order. Paragraph 2 must be read and construed in the context of the notice. Relevantly, the notice provides under the heading, 'Your Obligations':
If the appropriated debt under this order, or any part of it:
·Is not or will not be due and payable until more than seven days after the day on which the order is served; or
·Will not be due and payable until a condition is fulfilled.
You must within seven days after the day on which this order is served give the judgment creditor a written notice stating:
·The date on which the appropriated debt, or any part of it, is or will be or may be due and payable; and
·The amount of the appropriated debt if that amount is less than the judgment debt.
The notice apprises the third person of its obligations under s 52(1) of the Civil Judgments Enforcement Act. It also informs the proper construction of par 2 of the debt appropriation order. Viewed objectively, in the context we have mentioned, the recitation of the third person's notification obligations where the appropriated debt is not immediately due and payable is consistent with, and provides strong support for, a construction of par 2 of the debt appropriation order as providing for mutually exclusive alternatives.
It is not the case, contrary to Northside's challenge by ground 1.2, that properly construed the debt appropriation order is expressed in terms that the appropriated debt is due and payable and payment thereof is required within 7 days after service of the order. There is no irregularity of the kind contended for by ground 1.2.
In upholding the primary judge's construction of the debt appropriation order we acknowledge that par 1 of the order does refer to an amount 'due from you to the judgment debtor'. It is material, however, that par 1 uses the word 'due' rather than the phrase 'due and payable' as is found in par 2 and the notice of the third person's obligations. Moreover, for the purpose of ground 1.2, par 2 is the critical part of the debt appropriation order (rather than par 1); and par 2 is to be construed in the manner we have previously described. In any case the word 'due' is notoriously ambiguous.[42] In the present case, where the word is being used in a debt appropriation order to give effect to the regime in div 5 of pt 4 of the Civil Judgments Enforcement Act, the word 'due' is a convenient shorthand for that which is or will be or may be owed as used throughout the statutory provisions.
[42] Clyne v Deputy Commissioner of Taxation [1981] HCA 40; (1981) 150 CLR 1, 8.
Ground 1.2 fails.
It follows that ground 1 fails and the appeal should be dismissed.

Disposition: ground 2 - the construction of the rental agreement

The parties did not develop the constructional issue raised by ground 2 in their oral submissions at the appeal hearing. No doubt that was in recognition that the finding complained about was non‑binding obiter dicta.
There is, in our opinion, no need to consider and determine ground 2. Any conclusion reached by this court cannot affect the outcome of the appeal. Our disinclination to determine the point is reinforced by the circumstance that one of the interested parties, while joined, did not appear to make submissions on the question of the proper construction of cl 2.2(j) of the rental agreement.
Ground 2 may be put aside.

Conclusion and orders

The appeal should be dismissed. The parties should be heard on the costs of the appeal. Prima facie costs should follow the event.
It would, however, be remiss not to offer some observations about how a recipient of a debt appropriation order in the position of Northside might have dealt with the order. It may be useful to do so as it appears that the regime under div 5 of pt 4 of the Civil Judgments Enforcement Act has not operated effectively and efficiently in the present case. It is not this court's role to determine why that might have occurred. Nor, all the more so, is it this court's role to attribute responsibility for that failure to any of the participants in the events concerning the debt appropriation order. The intention of the remarks that follow is to identify practical measures that ought to be considered in circumstances such as the present.
First, as to what should have occurred, it is a feature of the case that following service of the debt appropriation order Northside did not give notice under s 52(1) of the Civil Judgments Enforcement Act. That notice should have been given by Northside to the judgment creditor. The requirement to do so arises where a third person is served with a debt appropriation order and, among other things, the appropriated debt:
is not or will not be or may not be due and payable until more than 7 days after the day on which the order is served.[43]
[43] Civil Judgments Enforcement Act s 52(1)(b)(i).
On Northside's case this was the position. Accordingly, notice should have been given in accordance with the statutory requirement. Northside was made aware of its obligations under s 52(1) of the Civil Judgments Enforcement Act. The debt appropriation order informed Northside of the relevant obligation on the second page of the order (see [82] above).
Northside was required to give the judgment creditor written notice stating the date on which the appropriated debt is or will be or may be due and payable.[44] Counsel for Northside said that this required identification of a date which did not seem possible. We disagree. It would have sufficed if Northside stated that the date on which the appropriated debt would be due and payable, if at all, was the date on which the judgment debtor's cause of action against Northside was adjudicated by a court of competent jurisdiction and the adjudication resulted in entry of an enforceable judgment in favour of the judgment debtor against Northside.
[44] Civil Judgments Enforcement Act s 52(1)(c).
Second, to the extent that Northside believed, incorrectly, that the debt appropriation order required it to make payment of the appropriated debt within 7 days after service of the order, there were options available to Northside other than bringing an objection application. Northside might have sought amendment of the debt appropriation order under s 103 of the Civil Judgments Enforcement Act. Alternatively, to the extent that it was said that the debt appropriation order was irregular or uncertain, Northside might have sought to invoke s 104 of the Act and obtained directions as to the operation of the debt appropriation order.
Finally, the judgment creditor acted prematurely in obtaining the property (seizure and sale) order and seeking enforcement by that means at a time when the appropriated debt was not yet due and payable. At the appeal hearing the judgment creditor's counsel accepted, quite properly and correctly, that there was no basis for the issue of the property (seizure and sale) order at the time when it was obtained.[45] It is regrettable that the judgment creditor proceeded to obtain the property (seizure and sale) order at a time when the appropriated debt was not yet payable by Northside.
[45] Appeal ts 36 - 37.
Northside brought an application to set aside the property (seizure and sale) order. The papers in the appeal do not explain what happened in relation to that application. It might have fallen away because Northside paid the appropriated debt. However, to the extent that Northside's complaint concerned the prematurity of the property (seizure and sale) order, that was something best addressed by an application to set aside that order rather than the objection application that was pursued together with the appeals therefrom.

Annexure 'A' - The Debt Appropriation Order

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CG
Associate to the Hon Justice Vaughan
31 OCTOBER 2024