P Aker Flowerbulbs Pty Ltd v Coulter

Case [2004] FCA 1486

FEDERAL COURT OF AUSTRALIA

P Aker Flowerbulbs Pty Ltd v Coulter [2004] FCA 1486

BANKRUPTCY – validity of bankruptcy notice – alleged overstatement of interest on judgment debt – interest calculated from date of judgment – where stay “on payment” granted for one month – effect of stay on accrual of post-judgment interest – alternative claim of compromise not finally determined

Landsal Pty Ltd (In Liq) v REI Building Society (1993) 41 FCR 421 at 429, referred to
Meadow Gem Pty Ltd v ANZ Executors and Trustees (unreported, Byrne J, Supreme Court of Victoria, 11 June 1996), referred to
Scarborough v Lew’s Junction Stores Pty Ltd [1963] VR 129, referred to
Ellis v Scott [1964] 2 All ER 987, referred to
Clifton Securities Ltd v Huntley [1948] 2 All ER 283, followed
Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184, referred to
Alexander v Cambridge Credit Corp Ltd (Receiver appointed) (1985) 2 NSWLR 685, referred to
Vitous v Tuohill [1964] VR 624 at 630-631, followed
Whitaker v Commissioner of Taxation (1998) 82 FCR 261 at 276, considered
Central Electricity Board of Mauritius v Bata Shoe Co (Mauritius) Ltd [1983] AC 105, referred to
Smart v O’Callaghan (1878) 4 VLR 448, referred to
Deloitte Touche Tohmatsu Trustee Co Ltd v Christchurch Pavilion Partnership (No 1) [2002] 3 NZLR 215, referred to
Scope Data Systems v BDO Nelson Parkhill (2003) 199 ALR 56, discussed
Re Pollack; Ex parte DCT (1991) 32 FCR 40 at 51 and 57, considered
Re Hughes, ex parte Westpac Banking Corporation (unreported, Merkel J, Federal Court of Australia, 28 November 1997), considered

County Court Act 1958 (Vic), s 73(4)

45 Am Jur 2d, Interest and Usury, § 43 (1999)

P AKER FLOWERBULBS PTY LTD (ACN 086 906 336) v DAVID COULTER

V689 of 2004

WEINBERG J
18 NOVEMBER 2004
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V689 OF 2004

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

P AKER FLOWERBULBS PTY LTD (ACN 086 906 336)
APPELLANT

AND:

DAVID COULTER
RESPONDENT

JUDGE:

WEINBERG J

DATE OF ORDER:

18 NOVEMBER 2004

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The appeal be allowed.

2.The decision and orders of the Federal Magistrate made on 11 May 2004 be set aside.

3.The matter be remitted to the Federal Magistrates Court to be further heard and determined according to law.

4.There be no order as to the costs of and incidental to the appeal.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V689 OF 2004

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

P AKER FLOWERBULBS PTY LTD (ACN 086 906 336)
APPELLANT

AND:

DAVID COULTER
RESPONDENT

JUDGE:

WEINBERG J

DATE:

18 NOVEMBER 2004

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. This is an appeal from a judgment of Connolly FM who, on 11 May 2004, ordered that a bankruptcy notice that…

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AGLC
P Aker Flowerbulbs Pty Ltd v Coulter [2004] FCA 1486
Case
[2004] FCA 1486
Decision Date

CaseChat Overview and Summary

In the case of P Aker Flowerbulbs Pty Ltd v Coulter, the appellant, P Aker Flowerbulbs Pty Ltd, appealed against the decision of a Federal Magistrate who had set aside a stay granted by Judge Holt on the payment of a judgment debt. The respondent, Mr Coulter, argued that Judge Holt had no power to prevent interest from running by staying the execution of the judgment. The appellant maintained that the judge had the power to order a stay of execution of the judgment, which would prevent the accrual of interest for the duration of the stay.

The court was required to determine the proper interpretation of the "stay" granted by Judge Holt on 8 May 2003. Specifically, whether the stay was intended to prevent the accrual of interest on the judgment debt during the period of the stay, or merely to delay the enforcement of the judgment without affecting the accrual of interest. Additionally, the court had to consider whether Judge Holt had the power to order a stay of execution of the judgment, and if so, whether such a stay could prevent the accrual of interest on the judgment debt.

The court found that Judge Holt's formulation of the stay as a stay on "payment" suggested that his Honour contemplated nothing more than a stay of execution. There was no indication that he intended the judgment debt in favour of the appellant to only come into existence after the expiration of the period of one month. The court noted that most courts have a general power to grant stays of execution of their judgments, including the County Court. The court also found that there was no doubt that Judge Holt had the power to grant a stay of execution. Therefore, the appeal was allowed, and the decision and orders of the Federal Magistrate were set aside. The matter was remitted to the Federal Magistrates Court to be further heard and determined according to law. There was no order as to the costs of and incidental to the appeal.

Orders

Orders of the court

1. The appeal be allowed.

2. The decision and orders of the Federal Magistrate made on 11 May 2004 be set aside.

3. The matter be remitted to the Federal Magistrates Court to be further heard and determined according to law.

4. There be no order as to the costs of and incidental to the appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

WEINBERG J
Counsel for Mr Coulter submitted that it was plain that Judge Holt had the power to prevent interest from running by ordering that payment of the judgment debt be stayed. There was nothing in s 73(4) that ran counter to this proposition. A court’s power to stay a judgment, or proceeding must include the power to stay part only of a judgment or proceeding, including execution thereof.CONCLUSION Both parties submitted that the first question to be determined in this appeal was the proper interpretation of the “stay” granted by Judge Holt on 8 May 2003. Did his Honour intend to stay the judgment as a whole so that there would be no debt in existence for a period of one month? Or did he intend simply to stay the execution of the judgment so that no proceeding to enforce payment could be brought until, for example, Mr Coulter had an opportunity to consider whether to lodge an appeal against the judgment? If his Honour intended only a stay of execution, did he contemplate that Mr Coulter would have the benefit of that stay without any interest accruing to the appellant for that period? Judge Holt formulated the stay that he ordered as a stay on “payment”. That suggests that his Honour contemplated nothing more than a stay of execution. There is nothing to indicate that he intended that the judgment debt in favour of the present appellant would only come into existence after the expiration of the period of one month. The matter is complicated somewhat by the fact that his Honour also ordered that Mr Coulter pay the appellant’s costs of the proceeding “on County Court Scale D, in default of agreement”. Section 73(4) deals separately with judgment debts (which carry penalty interest from the time the judgment is entered, or the order made) and “costs to be assessed” (which carry penalty interest from the assessment of those costs, or such other day as the court orders). It is difficult to see how a stay on payment of one month can be an order as to “such other day” when, as it appears, there was no assessment of costs to which a nomination of the “other day” could attach. There is no doubt that Judge Holt had the power to grant a stay of execution. A court may stay the execution of its own judgment or order under rules of court, or pursuant to inherent or implied jurisdiction: Ellis v Scott [1964] 2 All ER 987. The County Court is not a superior court of record. Nor is it a court of unlimited jurisdiction. It has no inherent powers. This is of little consequence as it plainly has implied powers. These include the power to grant a stay of execution. Section 49 of the County Court Act, which confers jurisdiction upon the Court in civil matters, is couched in the broadest of terms. Most courts have a general power to grant stays of execution of their judgments. See, for example, O 63 r 1 of the present High Court Rules, O 37 r 10 of the Federal Court Rules, Pt 44 r 5 of the Supreme Court Rules of NSW, and r 66.16 of the Supreme Court Rules of Victoria. However, it should be noted that not all courts have the power, express or implied, to order that the execution of a judgment be stayed pending appeal. For example, s 29 of the Federal Court Act provides that the Federal Magistrates Court cannot make such an order pending an appeal to the Federal Court. The County Court, however, is not under any such statutory constraint.

Ratio Decidendi

Legal Principle Established

Established by: WEINBERG J

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