McMaster v Eznut Pty Ltd [No 3] - [2009] WASC 288

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: MCMASTER -v- EZNUT PTY LTD [No 3] [2009] WASC 288

CORAM: MASTER SANDERSON

HEARD: 17 SEPTEMBER 2009

DELIVERED : 25 SEPTEMBER 2009

FILE NO/S: COR 16 of 2006

BETWEEN: BRIAN KEITH MCMASTER And
OREN ZOHAR AS ADMINISTRATORS 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:

Application to set aside property (seizure and sale) order - Turns on its own facts

Legislation:

Nil

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiffs:     Mr K L Christensen
First Defendant             :     No appearance
Second Defendant         :     In person
Third Defendant           :     No appearance
Fourth Defendants        :     No appearance

Solicitors:

Plaintiffs:     Gadens Lawyers
First Defendant             :     No appearance
Second Defendant         :     In person
Third Defendant           :     No appearance
Fourth Defendants        :     No appearance

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

Bailey v Marinoff (1971) 125 CLR 529

MASTER SANDERSON: This can be characterised as the second defendant's application to set aside a property (seizure and sale) order. The second defendant did not actually file an application to that effect. She made an oral application for such an order. When the matter came on for hearing I indicated to the parties that I would dismiss the second defendant's application. I said that I would publish reasons at a later date. These are those reasons.
On 8 February 2006 the plaintiffs commenced proceedings in this court seeking a declaration in accordance with s 447C(2) of the Corporations Act 2001 (Cth) that the plaintiffs were validly appointed as administrators of the first defendant on 27 January 2006 under s 436A of the Corporations Act. Simmonds J heard the matter and delivered judgment on 16 June 2006. His Honour found that the plaintiffs were validly appointed as administrators. As to costs his Honour ordered:
The second defendant pay the plaintiffs' costs of the application (including all reserved costs), to be taxed and paid forthwith.
On 21 July 2006 the second and third defendant appealed against his Honour's decision. They also appealed against the order dismissing their application to reopen the proceedings. On 11 August 2006 the second defendant filed an application seeking from the Court of Appeal a stay of execution pending determination of the appeal. The stay application was heard on 29 September 2006 by Buss JA and on 26 October 2006 his Honour dismissed the application.
On 28 July 2006 the plaintiffs' costs were taxed and allowed in an amount of $27,513.80.
On 19 November 2008 the Court of Appeal delivered judgments dismissing the defendants' appeals. On 16 December 2008 the second defendant applied to the High Court for special leave to appeal. This application was dismissed by the High Court on 29 April 2009. On 21 August 2009 the plaintiffs filed a bill of costs for taxation pursuant to the judgment of the Court of Appeal. Taxation of those costs is listed for 20 October 2009.
On 28 July 2006 a demand for payment of the taxed costs in relation to the initial proceedings was made by the plaintiffs' solicitors. No payment was made. On 4 September 2006 the plaintiffs made an application for a property (seizure and sale) order ('the first PSSO'). The first PSSO was issued against the second defendant's interest in a property at 6 Auriol Crescent, Carina. The first PSSO was granted on 15 September 2006. It was subsequently extended on a number of occasions. The plaintiffs applied again on 3 September 2008 to extend the first PSSO. I refused to grant the extension but gave leave to the plaintiffs to lodge a fresh PSSO. On 16 September 2008 the plaintiffs filed an application for a fresh PSSO ('the second PSSO'). That application was granted on 5 November 2008 with an expiration date of 10 May 2009.
The second PSSO was served by letter on the Sheriff's Office on 6 November 2008 together with instruction to hold execution of the second PSSO until further notice. The plaintiffs had decided to stay the execution of the second PSSO pending the outcome of the High Court proceedings. Essentially the plaintiffs did not want to enforce the second PSSO because they may have had to return the judgment sum to the second defendant should the orders of the Supreme Court have been overturned by the High Court.
On 30 April 2009, by interlocutory process, the plaintiffs applied to the court to extend the duration of the second PSSO. That hearing was listed for 5 May 2009. On 4 May 2009 the parties executed a minute of proposed consent orders in the following terms:
1.The plaintiffs' application for extension of the sales period of the Property (Seizure and Sale) Order be adjourned to a date to be fixed being no earlier than 2 months from 5 May 2009.
2.The sales period of the Property (Seizure and Sale) Order dated 5 November 2008 be extended from 11 May 2009 to a date being 7 days following the hearing fixed in paragraph 1.
3.The sale will not proceed before the extension of time granted; and
4.Costs be in the cause.
At the hearing on 5 May 2009 I made orders substantially in terms of the agreed minute. The variations were to fix the date of the adjourned hearing in par 1 of the minute for 21 July 2009 and by inserting the date 28 July in par 2.
When the matter came on for hearing on 21 July 2009 the plaintiffs appeared but the second defendant did not. At that hearing I made the following orders:
1.The sale period of the Property (Seizure and Sale) Order dated 5 November 2008 be extended for a period of 6 months from 29 July 2009 to 29 January 2010.
2.The costs of the application are enforcement costs of the Property (Seizure and Sale) Order.
Section 19 of the Civil Judgments Enforcement Act 2004 (WA) ('the CJE Act') provides:
(1)A judgment creditor may apply to a court for an enforcement order for the purpose of satisfying a judgment debt owed to the judgment creditor.
(2)Subject to section 21, an application for an enforcement order may be made whether or not previously a means inquiry has been held or an enforcement order has been made.
(3)Subject to section 21, an application for an enforcement order may be made without notifying the judgment debtor or any person to whom the order will be addressed, unless the regulations provide otherwise.
Section 59 of the CJE Act provides:
(1)In order to recover a judgment debt, a judgment creditor may apply to the court for an order authorising the Sheriff to seize and sell the judgment debtor's property to wholly or partially satisfy the judgment debt.
(2)The court may make such an order.
Section 102 of the CJE Act provides:
(1)Each of the following operates for 12 months after the day on which it is made or issued -
(a)a property (seizure and delivery) order;
(b)a property (seizure and sale) order;
(c)a warrant issued under section 29(4) or 89(4).
(2)A person in whose favour such an order operates may from time to time apply to the court that made it for the order's operation to be extended.
(3)The judgment creditor in proceedings in which such a warrant was issued may from time to time apply to the court that made it for the warrant's operation to be extended.
(4)On such an application, the court may extend the operation of the order or warrant for a period set by the court that is not longer than 12 months.
Section 9 of the CJE Act provides that applications under s 59 and s 102 of the CJE Act must be made to the court that gave the judgment.
Section 133 of the Transfer of Land Act 1893 (WA) provides:
…
(13)If, on an application made by the judgment creditor, the court that issued the property (seizure and sale) order is satisfied that there is a good reason why a sale of the saleable interest will not occur during the sale period, it may make an order that extends the sale period for a period set by the court that is not longer than 6 months.
(14)Unless the court orders otherwise, an application made under subsection (13) must be served on -
(a)the judgment debtor; and
(b)any other judgment creditor who has obtained the registration of a property (seizure and sale) order in respect of the saleable interest; and
(c)any other person who has an interest in the saleable interest.
(15)An order may be made under subsection (13) on more than one occasion.
The plaintiffs' application for the second PSSO on 16 September 2008 was regularly obtained. It was obtained from the Supreme Court, which is the proper court, and the plaintiffs have a valid judgment which has not been stayed. The plaintiffs' need for an extension of time was as a result of the plaintiffs' concerns regarding enforcing a PSSO when the second defendant was appealing against the orders. This decision actually operated to the benefit of the second defendant. If the plaintiffs had proceeded and had instructed the sheriff to execute the PSSO only to find at a later date the orders were set aside, the sale of the second defendant's property would be irreversible and she would have suffered considerable detriment. Repayment of the amount of costs would not put her back in the position she enjoyed before the PSSO was enforced. No criticism can be levelled at the plaintiffs for the approach they adopted.
Nor is there any other reason under the CJE Act or otherwise that the second PSSO ought be set aside. All the statutory requirements have been complied with. At all times the second defendant was aware of the existence of the second PSSO and she was also aware why the plaintiffs were delaying enforcement. It cannot be suggested that at any stage the plaintiffs misled or in any other way deceived the second defendant either about the existence of the second PSSO or their intentions
On 13 August 2009 the plaintiffs' application for the extension of the second PSSO was relisted. This was done at the request of the second defendant. Strictly speaking, the plaintiffs' application had been heard and determined and the matter was at an end. However, the second defendant applied to have the extension order set aside. Rather than require a fresh application I indicated to the parties I would approach the matter on the basis the second defendant was making an oral application to set aside the orders I had made on 21 July 2009. Pursuant to programming orders that I made, the second defendant filed extensive submissions dated 17 August 2009. These written submissions were supplemented by oral submissions made by the second defendant at the hearing on 17 September 2009. What follows is an attempt to deal with the arguments put by the second defendant in her written and oral submissions.
Before dealing with those submissions however, I should point out that at least in part the second defendant's submissions appeared to be directed at seeking to vacate the perfected judgment and costs orders granted by this court and the Court of Appeal as well as invalidating the second PSSO granted by the court. There is a long line of authority that establishes that courts have very limited powers to recall or vary perfected orders. It is sufficient if I refer to the High Court decision in Bailey v Marinoff (1971) 125 CLR 529. Insofar as the second defendant's submissions suggested that I could vary these orders, those submissions are rejected.
As I understand the second defendant's submissions, she puts five arguments. First, the second defendant submitted there was no dealing, transaction or 'justiciable controversy' between the plaintiffs and the second and third defendants, therefore the plaintiffs do not have a cause of action against the second and third defendants. Without the cause of action between the parties the courts do not have jurisdiction to issue the orders or the Court of Appeal orders against the second defendant.
There is no substance in that submission. As I have indicated above, orders have been made by this court in the context of the case as a whole - relevantly, the costs order made by Simmonds J. If that costs order was to be disturbed, it had to be disturbed by the Court of Appeal. It was not. The order has been extracted and that is the end of the matter. There is no basis upon which I could interfere with that decision.
Second, it was submitted that as Corporations Act matters are vested in the Federal jurisdiction, determination of such matters by the Supreme Court is a breach of the provisions of the Australian Constitution. Under s 1337B of the Corporations Act, jurisdiction is conferred on the Supreme Court of each state with respect to civil matters arising under the Corporations Act legislation. The position is clear. Furthermore, this was an argument considered by Simmonds J at the original hearing. His Honour dismissed the argument as having no merit.
Third, it was said by the second defendant that she was not served with the interlocutory application dated 30 April 2009 to extend the duration of the sale period of the second PSSO and therefore the orders made pursuant to that application should be set aside. That argument was infected by an error of fact. The second defendant was served with the interlocutory application on 30 April 2009. Furthermore, she consented to the orders made on 5 May 2009. This submission was without merit.
Fourth, it was said that the enforcement of orders was a contempt of the second defendant's petition to the United Nations Human Rights Committee and was a violation of the ICCPR Article 14(1). Any petition by the second defendant relying on this treaty is of no consequence in these proceedings.
Finally it was said that the second PSSO was a multiple enforcement as it was granted in relation to two orders for costs, therefore breaching s 22 of the CJE Act. It was said that it was granted without the court's leave under s 13 of the CJE Act. In fact, the second PSSO was granted on a costs order relating to the initial proceedings only. There is no multiple enforcement. This does not provide a basis upon which the second defendant could object to the extension of the second PSSO.
In short, none of the arguments put by the second defendant has any merit whatever. There was no basis upon which the second PSSO could be set aside. Accordingly, having characterised the second defendant's application as an oral application to set aside the order, I dismissed it with costs of the application being costs in the enforcement.