National Australia Bank Limited v Godden
[2005] VSC 450
•17 November 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 8631 of 2003
BETWEEN:
| NATIONAL AUSTRALIA BANK LIMITED | Plaintiff |
| - and - | |
| TANYA MAREE GODDEN | Defendant |
| No. 4686 of 2004 | |
| BETWEEN: | |
| NATIONAL AUSTRALIA BANK LIMITED | Plaintiff |
| - and - | |
| STEFANO BRUZZANITI | Defendant |
| No. 7505 of 2004 | |
| BETWEEN: | |
| NATIONAL AUSTRALIA BANK LIMITED | Plaintiff |
| - and - | |
| LOU CHIRICHIELLO (aka LOUIS A CHIRICHIELLO, LOU KNIGHT, LOUIS NIGHT, LOUIS ANTHONY KNIGHT) | Defendant |
| No. 9321 of 2005 | |
| BETWEEN: | |
| NATIONAL AUSTRALIA BANK LIMITED | Plaintiff |
| - and - | |
| SHARON LOUISE BARRETT | Defendant |
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JUDGE: | Master Evans | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10 November 2005 | |
DATE OF JUDGMENT: | 17 November 2005 | |
CASE MAY BE CITED AS: | National Australia Bank Limited v Godden and ors | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 450 | |
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Courts Practice and Procedure - Execution on Magistrates’ Court Order - Deemed Judgment under s.112 Magistrates Court Act 1986 - Certificate of Order - Amounts ‘unpaid under Order’ - Interest under s.100(7) Magistrates’ Court Act 1989 and costs of execution in Magistrates’ Court not included in that expression.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr. Paul McCaffrey | Blakie & Britt |
| (ex parte) |
HIS HONOUR:
Before the Court in each of these proceedings is an application to extend the validity of a warrant for the purpose of execution pursuant to Rule 68.05 (2) of the Rules of Court. Each application presents features common to all and accordingly I will deal with them in a joint judgment.
In each proceeding, execution proceeds upon a certificate of a Magistrates’ Court order filed in this Court under s.112(2) of the Magistrates’ Court Act 1989 (‘the Act’). Section 112 is in the following terms:
“Certificate for Supreme Court
(1)If -
(a)an order is made by the Court in a civil proceeding for the payment of money; and
(b)a warrant to seize property has been returned unsatisfied in whole or in part –
a registrar must, on the application of the person entitled to enforce the order, give that person a certificate of the order and of the amount remaining unpaid under the order and record the fact of the giving of the certificate in the register of the Court.
(1)A person who is given a certificate under sub-section (1) may file the certificate in the Supreme Court and, on the filing of the certificate, judgment is deemed to have been entered in the Supreme Court for the sum mentioned in the certificate as being unpaid together with all fees paid for obtaining and filing the certificate and the prescribed amount for costs.
(2)After the issue of a certificate under sub-section (1) no further proceedings (other than proceedings under the Judgment Debt Recovery Act 1984) must be taken in the Magistrates’ Court but, on the filing of the certificate in the Supreme Court, the judgment deemed to have been entered may be enforced by the same means as any other judgment entered in the Supreme Court, including enforcement under the Foreign Judgments Act 1962.”
Although the Magistrates’ Court Order so filed is deemed to be a judgment of this Court for the purposes of enforcement it does not become a judgment of this Court (Madin v McMahon).[1]
[1][1986] VR 134, at 136.
In two of the proceedings the certificate includes in it the costs associated with the unsatisfied warrant and the interest which has accrued pursuant to s.100(7) of the Magistrates’ Court Act 1989.
The certificate must record the amount of the order and the remaining unpaid under the order. The question that first arises for the consideration of the Court is whether or not such costs and interest are amounts unpaid under the order.
There is special provision made in the Magistrates’ Court Rules for the inclusion of the costs, fees and expenses incurred in respect of any prior warrant of execution in the amount for which a subsequent warrant may be issued.[2]
[2]Rule 27.04.
The rule in relation to an attachment of earnings order contemplates that a sum be specified in the order which will be comprised of ‘the amount due and unpaid under the order’ and any costs ordered by court to be paid by the judgment debtor.[3] I note that the prescribed form of affidavit in support of the application (F27E) contemplates that the amount due and unpaid under the order includes ‘other costs incurred subsequent to order’.
[3]Rule 27.18(1).
In contrast to that rule is the rule relating to attachment of debts[4] which permits an order attaching a debt in order to ‘answer the judgment debt’. The prescribed form of order contemplates that the debt is attached to the extent necessary to satisfy ‘the judgment debt, the interest accrued thereon and the costs of the garnishee proceedings’ (F27Q).
[4]Rule 27.30.
This brief examination of the rules as to execution does not demonstrate any underlying consistent scheme for recovery of costs of execution by warrant or generally as costs unpaid under the order.
The rules cannot in any event determine the meaning of those words as used in the Act. A construction of the section consistent with full recovery of all moneys due under the Magistrates’ Court order should be adopted because no further proceedings may be taken in the Magistrates’ Court to enforce it.[5]
[5]s.112(3).
Some guidance may be obtained from the interpretation of similar expressions in other contexts but in the final analysis the particular statutory context must determine the proper interpretation. In Chan v Cresdon Pty Ltd,[6] in the decision of the majority of the High Court, it was held that the word ‘under’ in the context in which it appeared (a guarantee of obligations arising under a lease) referred to an obligation created by, in accordance with pursuant to or under the authority of the lease.
[6][1989] 168 CLR 242 at 249.
There is no obligation created by the order or otherwise to pay the costs of a failed warrant. There is simply a limited provision for the recovery of those costs in the process of execution by warrant and, arguably, by attachment of earnings.
The word ‘under’ usually imports a direct connection between the relevant act (in this context read ‘obligation to pay’) and the instrument (Elmslie v Commissioner of Taxation).[7] Even if there was an actual obligation to pay created it is not directly connected to the order but to general provisions governing the execution of all orders.
[7]1993 46 FCR 576 at 592.
Even if interpreted liberally the words ‘unpaid under the order’ are not susceptible of an interpretation which would embrace costs incurred in or in aid of execution generally and whether the subject of an order or not. For that reason also, I must conclude that they do not include the costs of a prior warrant recoverable not under the order but pursuant to the provision of some of the rules relating to the execution.
I am comforted in this conclusion by the existence of a provision in Chapter I of the Rules of this Court in terms similar to Rule 27.04[8] which is in terms which are, arguably, apt to include the costs of the unsatisfied Magistrates’ Court warrant.
[8]Rule 68.06.
I turn then to a consideration of whether or not interest under s.100(7) of the Act is within the expression ‘unpaid under the order’. The adoption of a construction of s.112 which permits the inclusion of such interest up to the date of the issue of the certificate as part of the amount unpaid under the order would in my opinion create a problem in the application of the interest provision to the deemed judgment arising from the filing of the certificate if that judgment is to be regarded as creating the judgment debt because interest on interest would accrue.
The better view is that adopted by Tadgell J in Madin v McMahon and that is that the Magistrates’ Court order does not become a judgment of this Court on filing of the certificate in this Court and accordingly the judgment debt to which the interest provision applies is and remains the Magistrates’ Court order.
Accepting that this is so then it is not necessary to adopt a strained construction of the words ‘unpaid under the order’ in order to preserve the Judgment Creditor’s right to interest accrued to the date of the issue of the certificate. The obligation to pay interest accrues by operation of the statutory provision and not by operation of the order. That distinction is recognised by s.101(2) of the Supreme Court Act 1986 which provides in respect of interest on judgment debts in that Court as follows:-
“(2)The amount of the interest must be stated in the body of and may be levied under a warrant of execution on the judgment.”
Judgment debt in the Judgment Debt Recovery Act 1984 is defined to mean the amount of money payable under and in respect of a judgment. In Cahill v Howe,[9] it was held that interest on a Judgment pursuant to s.161 of the Supreme Court Act 1958[10] was in the context of that provision payable in respect of a Judgment. The statutory distinction in s.101(2) if that Act which is to some extent reflected in s.100 (7), (8) and (9) of the Act, is in my opinion an appropriate one to adopt in interpreting s.112.
[9][1986] VR 630 at 633.
[10]see now s.101.
Accordingly, I conclude that interest payable pursuant to s.100(7) is not to be included in the certificate as part of the amount unpaid under the order. This construction has the additional benefit that the interest which continues to accrue between the time of the issue of the certificate and the time of its filing in this court is not lost.
It is unfortunate that the conclusions I have expressed disturb what, I was informed, was a well established practice of including interest and the costs of unsatisfied warrants in certificates issued under s.112 of the Act.
I will hear counsel on whether or not the court could or should amend the certificates in each of these proceedings in order to preserve some of the costs which would otherwise be thrown away if the certificates were set aside.
I now turn to a consideration of the individual applications in each proceeding.
National Australia Bank Ltd v Godden (8631/03)
Chronology, Commentary and Reasons
25.6.02
Magistrates’ Court Order for $2,338.76, interest $37.68 and costs $208.75 ($2,585.19)
6.10.03
Certificate under s.112 issued stating $3,203.04 remains due and unpaid. It appears from calculations set out in paragraph 3 of the affidavit of M.V. Britt sworn 11 November 2003, that this amount includes $373.85 (interest to 6.10.03) under s.100(7) of the Act and $244 being the costs and fees of a warrant issued on 27 May 2003, in the Magistrates’ Court.
31.10.03
Certificate filed in this Court.
20.11.03
Warrant of Seizure and Sale issued out of this court. The warrant instructs the Sheriff to levy execution on the judgment debtor’s property for inter alia:-
(i) the fees on the certificate and its registration ($299);
(ii) the costs of the warrant ($650);
(iii) the costs of the Magistrates’ Court warrant ($86);
(iv) the Sheriff’s fees and expenses of execution for the warrant (unstated) and for the Magistrates’ Court warrant ($158).
13.7.04
The first step was taken towards registration of the warrant on the title to the judgment debtor’s land ownership of which was known to the judgment creditor at the time the certificate was filed (see M.V. Britt 11.11.03 para. 5).
26.8.04
The judgment debtor agreed to pay $50 per week ($2,600 per year) in reduction of the judgment debt but did not do so.
At that point the costs incurred since the certificate was filed in this Court amounted to at least $949.
Calculated as follows:-
Certificate
$299
Cost of Warrant
$650
$949
This sum does not include Sheriff’s fees or costs and fees of registering the warrant. If the judgment debtor had honoured the arrangement most, if not all of, the first year’s payment of the arrangement would have gone to reduce those costs and the interest which would accrue during the year. If the judgment creditor had applied to extend the warrant to protect its position then it would have clearly become an exercise in recovering solicitors costs and fees and not the judgment debt.
21.10.04
Master Wheeler extended the validity of the warrant for execution until 19 November 2005, and ordered that costs of the application fixed at $650 be part of the costs of execution.
11.3.05
The property was passed in at an auction conducted by the Sheriff pursuant to the warrant.
6.5.05
An order was made by me permitting the sale of the judgment debtor’s interest in the property for the best price that can be obtained and making the costs of the application fixed at $279.30 (with the consent of the judgment creditor) part of the costs of execution.
9.8.05
The property was again passed in at a Sheriff’s auction. Steps have since been taken to arrange a further auction on 22 November 2005.
10.11.05
Application made to extend the validity for execution of the warrant.
The amount outstanding as at 7 November 2005, claimed to be $8, 441.54, $5, 955.79 more than the original debt pursuant to the order, the overwhelming burden of which is costs and fees incurred since the certificate was filed in this Court.
A search conducted at my request revealed that there were no interests registered on the title to the property since the judgment creditor’s warrant was registered.
Counsel sought costs and disbursements in respect of the application of $2,653.60 and tendered a bill of costs in taxable form in relation to a similar application made in July of this year. Accepting without deciding that this is a reasonable assessment of the costs incurred the inescapable conclusion is that the costs of making the application far outweigh the costs of simply issuing a fresh warrant.
In my view, the judgment creditor ought to have proceeded without delay to procure the registration of the warrant against the title to the property and instructed the Sheriff to sell it. To engage in pointless repayment arrangements as it has done has simply postponed the inevitable decision to proceed to a sale of the property. This after all is the whole reason for filing the certificate in this Court. It only has itself to blame that through inaction the proposed sale of the property on 22 November 2005 will go off unless the validity of the warrant is extended. In any event, the exercise is a costly and probably futile exercise given the failure of two previous auctions.
The application to extend the warrant will be dismissed.
National Australia Bank Ltd v Bruzzaniti – No. 4686 of 2004)
Chronology, Commentary and Reasons
21.5.99
Magistrates’ Court order for $11,842.25, interest of $227.47 and costs of $261 ($12,330.72)
12.2.04
Magistrates’ Court certificate issued stating that $19,448,54 remains due and unpaid. I am unable to calculate precisely what was included in this sum but will assume on the basis of the practice adopted in the proceeding with which I have already dealt in these reasons that it included amounts in respect of all or part of each of the sums listed in paragraph 3 (i)-(xi) of the affidavit of M.V. Britt sworn 9 November 2004. These amounts include interest on the original ‘judgment’ debt, costs of the unsatisfied Magistrates’ Court warrant, costs payable pursuant to an order of the Magistrates’ Court made on an oral examination of the judgment debtor on 8 April 2003, interest on that order, costs payable pursuant to an attachment of earnings order made in the Magistrates’ Court on 24 April 2001, and interest on that order.
The certificate purports to certify the amounts of these two subsequent orders. The amounts due under those orders are self evidently not due under the order to which the certificate relates and ought not be included in the certificate. Separate enforcement proceedings may be taken in respect of them in the Magistrates’ Court.
Credit is given in that affidavit for amounts paid by the Judgment Debtor prior to the issue of the certificate. One such amount was paid prior to the making of the Magistrates’ Court order. Accordingly, the judgment was for a sum greater than was due at the date of judgment. The judgment should have been amended prior to the issue of the certificate. As the certificate is in any event manifestly irregular in the respects I have pointed out, I will order that its filing and all steps taken on it be set aside and that the application be dismissed .
24.2.04
Certificate filed in this Court.
17.11.04
Warrant of Seizure and Sale issued. The warrant included the amounts stated in the certificate to be ‘subsequent costs’ and interest on those amounts. For that reason also, the warrant could be set aside.
10.11.05
Application made to extend the validity of the warrant for execution.
A search which I requested revealed that no interests had been registered on the title to the Judgment Debtor’s property subsequent to the warrant. Accordingly, no question of priority arises.
As the costs of an extension application far outweigh the costs of issuing a fresh warrant, I would not have extended the warrant in these circumstances even if the certificate and the warrant had been regular. The application will be dismissed.
National Australia Bank Limited v Chirichiello – (7505/04)
Chronology, Commentary and Reasons
17.12.97
Magistrates’ Court order for $3,205.59, interest of $131.00 and costs of $168 ($3,504.59).
9.8.04
Certificate of order issued stating that $5,041.29 due and unpaid under order. In the affidavit of M.V. Britt sworn 7 December 2004, paragraph 4, he deposes that as at 7 December 2004, the Defendant owes $9,343.69. He does not say he owes it under the order but it would be pointless to include the assertion in the affidavit unless it was intended to convey that impression. This sum is over $3,000 more than the sum certified to be due and unpaid three months earlier.
The amount certified to be due and unpaid under was calculated by subtracting the amount of $200 paid by the Judgment Debtor in 1999 from the judgment debt and adding the amounts described in the certificate as ‘subsequently fixed costs by court’ which totalled $1,736.70.
Those amounts were costs of execution awarded by the court and costs relating to an application for payment of the debt by instalments which might properly be described as costs of defending the right to execute. For the reasons set out above, none of those amounts were properly included in the certificate as part of the amount unpaid under the order. All were capable of being the subject of separate certificates under s.112 of the Act.
I will entertain submissions as to what should be done in respect of the certificate.
11.8.04
The certificate was filed in this court.
13.12.04
Master Wheeler gave leave to issue a warrant of execution notwithstanding that 6 years had elapsed since judgment was obtained and made costs of the application (fixed at $850) costs ‘in the execution’.
18.1.05
A warrant of seizure and sale was issued to levy execution on the Judgment. In paragraph (a) of the warrant, the Sheriff was commanded to levy execution in respect of further costs of $2,892.60 which was comprised as follows:-
Costs ordered by Master Wheeler (13.12.04) $ 850.00 Subsequent costs ordered $1,736.70 Magistrates’ Court fee on Certificate $ 26.60 Fee on filing of Certificate $ 279.30 $2,892.60
In paragraph (b) of the warrant, the Sheriff is commanded to levy an amount of $3,790.77 for interest. This amount is in part comprised of interest on the sums described as ‘subsequent costs ordered’ in the certificate.
These conclusions are based on paragraph 3 of the affidavit of M.V. Britt sworn 13 January 2005, in support of the application for the issue of the warrant.
The amounts in respect of the ‘subsequent costs’ and interest on them should not have been included in the warrant.
10.11.05
Application was made to extend the validity for service of the warrant.
It appears from a search obtained on that day that no interest has been registered on the title of either of the properties upon which the warrant has been registered.
I will hear submissions from Counsel as to whether or not the warrant could or should be amended to levy only the amounts properly leviable under the deemed judgment or should be set aside.
Given the costs of an application to extend and the absence of any priority question, the proper course to be adopted by the Judgment Creditor was to simply issue a fresh warrant. The application to extend the validity of the warrant is dismissed.
National Australia Bank Ltd v Barrett - (No. 9321 of 2004)
Chronology, Commentary and Reasons
20.7.98
Magistrates’ Court order for $4,829.87, interest of $149,74 and costs of $160.50 ($5,140.11).
15.11.04
Certificate of order issued stating that $3,853.11 remained due and unpaid under the order. That sum was calculated by allowing a credit of $1,410 paid by the Judgment Debtor prior to the issue of the certificate and adding $123 which was the amount of costs fixed by the Registrar of the Magistrates’ Court at Wodonga on 2 August 1999, for the oral examination of the Judgment Debtor. This conclusion is based on paragraph 4 of the affidavit of M.V. Britt sworn 7 December 2004.
This sum was not and should not have been referred to in the certificate.
I will hear submissions from Counsel on what steps could or should be taken to correct the certificate.
13.12.04
Master Wheeler ordered that the Judgment Debtor have leave to issue a warrant of execution notwithstanding that 6 years had elapsed since judgment was obtained and ordered that the costs of the application fixed in the sum of $850 be costs ‘in the execution’.
29.11.04
Certificate filed in this Court.
18.1.05
A Warrant of Seizure and Sale was issued to levy execution on the Judgment Debtors property.
The warrant did not seek to levy execution for the $123 costs referred to above.10.11.05
Application was made to extend the validity for execution of that warrant. The warrant has not yet been registered on the title to the Judgment Debtors land.
Given the cost of extending the validity of the warrant compared with the cost of issuing a fresh warrant, I consider that it was appropriate for the Judgment Creditor to adopt the latter course. I should add that the failure to procure registration of the warrant within the year is not adequately explained. It seems that a leisurely approach was adopted by both the Judgment Creditor’s solicitor and the Sheriff.
Accordingly, the application will be dismissed.
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