McMaster v Eznut Pty Ltd [No 2]

[2008] WASC 233

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   MCMASTER -v- EZNUT PTY LTD [No 2] [2008] WASC 233

CORAM:   MASTER SANDERSON

HEARD:   9 SEPTEMBER 2008

DELIVERED          :   12 SEPTEMBER 2008

PUBLISHED           :  20 OCTOBER 2008

FILE NO/S:   COR 16 of 2006

BETWEEN:   BRIAN KEITH MCMASTER AS ADMINISTRATOR OF EZNUT PTY LTD (ADMINISTRATORS APPOINTED) (ACN 102 508 789)

OREN ZOHAR AS ADMINISTRATOR OF EZNUT PTY LTD (ADMINISTRATORS APPOINTED) (ACN 102 508 789)
Plaintiffs

AND

EZNUT PTY LTD (ADMINISTRATORS APPOINTED) (ACN 102 508 789)
First Defendant

HANNA SMOLAREK
Second Defendant

CHRISTINA SMOLAREK
Third Defendant

DAVID LIWSZYC
GHEORGHE EMIL DUTA
Fourth Defendants

Catchwords:

Property (Seizure and Sale) Order - Application for extension of order - Whether extension appropriate

Legislation:

Nil

Result:

Extension refused

Category:    A

Representation:

Counsel:

Plaintiffs:     Ms F F Xue

First Defendant              :     No appearance

Second Defendant         :     In person

Third Defendant            :     No appearance

Fourth Defendants         :     No appearance

Solicitors:

Plaintiffs:     Christensen Vaughan

First Defendant              :     No appearance

Second Defendant         :     In person

Third Defendant            :     No appearance

Fourth Defendants         :     No appearance

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

Nil

1. MASTER SANDERSON:  By interlocutory process filed 3 September 2008, the plaintiffs, relevantly, sought the following two orders:

   1.The duration of the Property (Seizure and Sale) Order dated 15 September 2006 be extended for a period of 12 months from 15 September 2008 to 15 September 2009.

   2.The sale period of the Property (Seizure and Sale) Order dated 15 September 2006 be extended for a period of six months from 20 September 2008 to 20 March 2009.

2. The property the subject of the order is owned by the second defendant.  When the matter was called on for hearing on 9 September, the second defendant, who appeared in person, had had only a limited opportunity to consider the matter.  After hearing argument, I gave the second defendant the opportunity to file an affidavit and submissions.  The second defendant did file an affidavit sworn 8 September 2008.  On 12 September, I advised the parties that I would dismiss the application.  I indicated then I would publish reasons at a later date.  These are those reasons.

3. In support of the application, the plaintiffs relied on two affidavits of Charles Philippe Louis Nilant, one sworn 7 March 2007 and the other sworn 9 August 2007.  Reliance was also placed on two affidavits of Fei Fei Xue, one sworn 7 March 2008 and the other sworn 3 September 2008.  The position that emerges from these affidavits can be summarised in this way.

4. On 28 July 2006, the plaintiffs obtained a judgment against the second defendant in an amount of $27,513.80.  This judgment sum represented taxed costs awarded against the second defendant in proceedings heard before this court.  Armed with that judgment, the plaintiffs registered a property (seizure and sale) order against the second defendant's property at 6 Auriol Court, Carine.  The order was registered on 20 September 2006.

5. The second and third defendants appealed against the decision which led to the costs order being made.  The plaintiffs were clearly concerned that were they to exercise the power of sale under the order and if the appeal by the second and third defendants was successful, the amount recovered would have to be repaid to the second defendant.  Moreover, the second defendant's property would have been sold, making it unlikely that she could have been returned to the position she was in prior to the execution of the sale order.

6. With this in mind, the plaintiffs obtained orders extending the order for 12 months.  This order was obtained on 28 August 2007.  The extension ran to 15 September 2008.

7. At the time the application for extension came on for hearing, the appeal had been heard.  It was heard on 22 August 2008.  The Court of Appeal reserved its decision.  The plaintiffs wished to preserve their rights in relation to the Carine property pending determination of the appeal.

8. In my view, it is not appropriate to extend an order in these circumstances.  Effectively, the plaintiffs are using the order as an asset preservation injunction.  If the plaintiffs believe they have grounds for obtaining such an injunction, then they ought make an application accordingly.  But to repeatedly seek to extend the seizure and sale order is, in my view, inappropriate.  It is using the Civil Judgments Enforcement Act 2004 (WA) in a way that was not intended.

9. That is not to say that the plaintiffs cannot lodge a fresh order.  There appears to be nothing in the Act which would stop them doing so.  Faced with the registration of such an order, the second defendant may take steps to have it removed.  That raises issues that would need to be determined in the context of such an application.  But in my view, the present order ought not be renewed.  I therefore dismissed the interlocutory process and reserved the costs.