Phuong v Weber & Nguyen [2004] NTMC 2 (6 January 2004)
PARTIES: NGUYEN THI PHUONG
v
JOE WEBER
and
TAI HUU NGUYEN
TITLE OF COURT: LOCAL COURT
JURISDICTION: LOCAL COURT ACT
FILE NO(s): 9908732
DELIVERED ON: 6 January 2004
DELIVERED AT: Darwin
HEARING DATE(s): 29 September 2003
DECISION OF: Mr V Luppino
CATCHWORDS:
Local Court Rules - Bailiffs - Application to restrain action against bailiffs - principals involved.
Local Court Rules 2.04, 3.03, 14.04, 14.05, 14.06, 14.07, 14.08, 14.09, 14.12, 44.03.
Partnership Act 1997 s 27 (1)
REPRESENTATION:
Counsel:
Plaintiff: Unrepresented
First Defendant: Mr Cantrill
Applicant: Mr Cantrill
Bailiff Ms Leahy
Solicitors:
Plaintiff: Brian Johns
Defendants: T S Lee & Associates
Applicant: T S Lee & Associates
Bailiff : Elizabeth Leahy
Judgment category classification: B
Judgment ID number: [2004] NTMC 002
Number of paragraphs: 44
IN THE LOCAL COURT
AT DARWIN IN THE NORTHERN
TERRITORY OF AUSTRALIA
No. 9908732
BETWEEN:
NGUYEN THI PHUONG
Plaintiff
AND:
JOE WEBER
First Defendant
and
TAI HUU NGUYEN
Second Defendant
REASONS FOR DECISION
(Delivered 6 January 2003)
Mr V M Luppino SM:
1. These proceedings have an extensive history. The action commenced by a Statement of Claim on 19 April 1999 concerning a dispute about the rights to a certain mango processing machine. A decision was given in this Court on 2 June 2000. Nominal damages only were awarded ($2.10). However, with interest and costs the amount subject to enforcement as at the commencement of the current application was $56,950.00. Following the decision in this Court, an appeal to a single Judge of the Supreme Court resulted in the Local Court decision being overturned. That decision was reinstated by the Court of Appeal. I was also told that an application for leave to appeal to the High Court is pending.
2. Despite this being an interlocutory application many issues were raised and there was much evidence to sift through. The current application has its genesis in a warrant taken out by the plaintiff to enforce the judgment. On 22 August 2003 the first defendant applied to stay execution of that warrant and to obtain an order for return of the property seized by the bailiff in purported execution of that warrant. That application was dismissed on 27 August 2003 although certain issues in that application survive. That application remains relevant as background material to the matter currently before this Court. Indeed the affidavits relied on in that application were also relied on in the current application.
3. The current application is in the nature of interpleader protection sought by the bailiff. The bailiff, Hans Mitterhuber, has filed an application dated 27 August 2003 seeking an order pursuant to rule 14.05 of the Local Court Rules, to restrain the applicant in this application, Thong-Rit Weber ("TRW"), from commencing proceedings against him pursuant to a notice dated 21 August 2003 and given under rule 14.04(1) of the Local Court Rules.
4. An extract of the relevant Local Court Rules follow, namely.
14.04 Notice of claim to bailiff
(1) Where a bailiff has taken or intends to take property in execution of a warrant, a person making a claim in respect of the property or the proceeds of sale of the property may give the bailiff written notice of the claim.
(2) A notice of claim under subrule (1) is to -
(a) be given as soon as practicable after the claimant becomes aware that the bailiff has taken or intends to take the property;
(b) state the name and address for service of the claimant;
(c) identify each item of property that is, or the proceeds of sale that are, claimed; and
(d) state the grounds of the claim.
14.05 Bailiff's application to stay or restrain proceeding
(1) Where a claimant who is entitled to give notice under rule 14.04 does not do so within the time referred to in rule 14.04(2)(a), the bailiff may apply for an order to -
(a) restrain the claimant from commencing a proceeding in a court; or
(b) stay or restrain the continuance of a proceeding in a court by the claimant,
against the bailiff in respect of anything done by the bailiff in execution of the warrant after the time when the person might reasonably have given notice.
(2) An application under this rule is to be -
(a) made in the proceeding in which the warrant was issued;
and
(b) served personally on the claimant.
14.06 Notice to execution creditor
(1) Not later than 7 days after receiving a notice of claim under rule 14.04, the bailiff must serve on the execution creditor -
(a) a copy of the notice; and
(b) a notice in accordance with Form 14A.
(2) Not later than 7 days after being served with the notices under subrule (1), the execution creditor may serve on the bailiff a written notice stating that the execution creditor -
(a) admits the claim;
(b) disputes the claim; or
(c) admits part and disputes part of the claim as specified in the notice.
14.07 Consequences of admission of claim
(1) Where an execution creditor admits a claim to property in dispute -
(a) the execution creditor is not liable for any fees in respect of that property claimed by the bailiff under the warrant after the notice admitting the claim is served;
(b) the bailiff must -
(i) withdraw from possession of that property; or
(ii) if the property has been sold - pay the proceeds of the sale into the Court and notify the execution creditor and the claimant in writing of the payment into the Court; and
(c) the bailiff may apply for an order to -
(i) restrain the claimant from commencing a proceeding in a court; or
(ii) stay or restrain the continuance of a proceeding in a court by the claimant,
against the bailiff in respect of anything done by the bailiff in execution of the warrant.
(2) As soon as practicable after receipt of the proceeds of sale under subrule (1)(b)(ii), a Registrar must pay out the proceeds to the claimant.
14.08 Bailiff's application for interpleader order
(1) If an execution creditor -
(a) does not serve a notice admitting the whole of a claim within the time specified in rule 14.06(2)(a); or
(b) serves a notice under rule 14.06(2)(b) or (c) disputing the claim or part of the claim,
the bailiff may, if the claimant does not withdraw the claim, apply to the Court for an interpleader order.
(2) An application under subrule (1) is to be -
(a) made in the proceeding in which the warrant was issued;
and
(b) served on the execution creditor and each claimant.
14.09 Interpleader orders
On application for an interpleader order, the Court may -
(a) where a proceeding in which the applicant is being sued in respect of any of the property in dispute is pending in the Court -
(i) order that a claimant be added as a defendant in the proceeding in addition to or in substitution for the applicant; or
(ii) order that the proceeding be stayed or dismissed;
(b) order that a question between the claimants be stated and heard and direct which of the claimants is to be plaintiff and which defendant;
(c) where a proceeding in which the applicant is sued in respect of any of the property in dispute is pending in another court - restrain the continuance of the proceeding;
(d) order the applicant to transfer or dispose of any of the property in dispute or pay the proceeds from its sale into the Court or elsewhere;
(e) where a claimant claims to be entitled by way of security for debt to any of the property in dispute - make orders for the sale of any of the property and for the application of the proceeds of sale;
(f) summarily determine a question of fact or law arising on the application; or
(g) make the orders or give the judgment it considers appropriate.
14.12 Hearing of interpleader question
On the hearing of an application for an interpleader order, the Court may finally determine all questions arising out of the application.
5. TRW, the applicant in the current proceedings is not a party to the substantive proceedings. Her application is on the basis that the bailiff has purported to execute the subject warrant against her goods and has also seized two items of property belonging to her.
6. The evidence before me largely consisted of affidavit material of significant quantity. Those affidavits comprised;
1. Affidavits of the first defendant sworn 21 August 2003, 21 September 2003 and 29 September 2003;
2. Affirmations of TRW affirmed 21 August 2003, 29 August 2003, 21 September 2003, and 29 September 2003
3. Affidavit of Hans Mitterhuber sworn 1 September 2003;
4. Affidavit of Grant Jonsson sworn 1 September 2003
5. Affidavit of Mark Marchant sworn 22 September 2003
6. Affidavit of Darren James Parker sworn 22 September 2003.
7. Much of the affidavit content was on peripheral matters which might be relevant to issues concerning the exercise of my discretion, particularly in relation to costs. There was also much material of an argumentative nature in the affidavits. That is entirely inappropriate and the solicitors who prepared those affidavits need bear in mind that affidavits are for the purposes of putting evidence before the Court and not for making submissions through the deponents. In addition to the affidavit material, the first defendant and TRW both gave oral evidence and were both cross-examined. The oral evidence however was of limited utility relative to the body of the affidavit material. Very little was achieved in cross-examination of those witnesses.
8. The issues for decision in the current application are:-
1. Whether TRW gave notice within the time prescribed as required by rule 14.04(1).
2. If not, whether and what orders in favour of TRW should be made.
3. Who is the rightful owner of the items of property seized or impounded by the bailiff.
4. Whether the various items seized in purported execution of the warrant are "…personal property necessary for adequate living and continuation of work…" within the meaning of rule 44.03(1)(b) of the Local Court Rules.
9. The only application currently before the Court is the application by the bailiff made under rule 14.05 of the Local Court Rules. Mr Cantrill, counsel for the first defendant and the applicant, urged me to treat the application as one for an interpleader order with a view to resolving all issues outstanding between these parties. That was opposed by Ms Leahy. Parties are entitled to seek whatever orders they consider appropriate. It is not for another party, in this case TRW who incidentally has no right to seek an interpleader order, to request that an application before the Court should be broadened to encompass other orders in the way suggested on behalf of TRW. That should only occur with the consent of all parties and with the leave of the Court. Otherwise it is inappropriate. There may well be reasons why the bailiff has chosen only to seek the orders that he has. Moreover, I am entitled to assume that the evidence the parties have led has been led within the confines of the application before the Court. It is entirely unsatisfactory to suggest that the Court should make orders which have not been sought by the only party entitled to seek those orders when in any event that party may have led further evidence had he elected to seek those orders. Also relevant is the fact that I have no evidence as to the attitude of the judgment creditor in terms of rule 14.06(2) i.e. whether or not the plaintiff concedes TRW's claim to ownership.
10. I appreciate the need to bring some sort of finality to these proceedings. I acknowledge that treating the current application as also an application for interpleader orders would enable me to finally deal with application having regard to rules 14.09 and 14.12. Tempting as that may be, it is inappropriate for the reasons stated. However, I do consider some ancillary type orders to be appropriate notwithstanding the absence of a specific application. For example, the rules empowering this Court to extend time are of general application and I feel can be the basis of an order in the current application even absent a specific application. I am confident that the parties have put before me all evidence relevant to that notwithstanding that a specific order has not been sought as I consider it to be a central issue and that all the parties were alert to its general application.
11. Bearing the foregoing in mind I do not consider that it is the role of this Court in the current application to finally resolve questions of ownership of the property in dispute. The role of this Court is to decide whether or not the applicant should be restrained from taking any further action against the bailiff. In addition it is not the role of this Court in the current application to decide the validity of the warrant or the validity of the procedure followed by the bailiff. However those matters are not entirely irrelevant as they may be relevant if the exercise of discretion is involved. That may also be relevant in relation to the question of costs. Separate proceedings or applications will need to be taken either by the TRW or by the parties to the substantive proceedings in relation to the subject property depending on the orders that I make.
12. Having regard to the foregoing, the evidence shows that the bailiff attended at premises known as Eva Valley Station on 2 May 2003. References in the first defendant's affidavit and in TRW's affirmation to that occurring on the date in April are obviously incorrect. The first defendant only was present on that occasion. The bailiff spoke to the first defendant. What was said and what occurred is in dispute. It is common ground however that the bailiff impounded three items of property by placing stickers on those items. Those items were a Kubota tractor, a Sylvan sprayer and a Suzuki motorcycle.
13. Some of the peripheral evidence before me was evidence from the bailiff in relation to enquiries he made with Batchelor police regarding ownership of firearms by the first defendant. The bailiff claimed some concern about this at one point but almost within the same breath he said that he was not concerned as he had known the first defendant for a long time. This evidence was entirely unsatisfactory, contradictory and irrelevant. I question the bailiff's motives in even raising that. Submissions questioning his objectivity were made based not only on this but also on the basis of a complaint he made to the Law Society against the solicitor acting for the first defendant and TRW.
14. In terms of the dispute about what was actually said on that occasion, the first defendant maintains that he told the bailiff on that day that the property was in fact that of TRW. The bailiff does not agree with that but agrees at least that the first defendant told him this in the course of a telephone conversation that occurred the next day. It is interesting to note that in response to that information, the bailiff says that he dictated to the first defendant the acknowledgment he would require to support that claim. Moreover and very importantly, the bailiff concedes that a handwritten note subsequently prepared by the first defendant was largely in compliance with that requirement. The bailiff's evidence is also that on 2 May 2003 he told the first defendant that he would give him seven days to see if he could raise the money. Importantly he did not say that the seven days was to enable the warrant to be challenged. In my view it would be quite a fair impression for the first defendant to have formed following those events that he had satisfied the bailiff's requirements up to that time.
15. In any event the first defendant says that not only did he then advise the bailiff of the claim to ownership of TRW, he says that he also produced relevant documentation. That is disputed by the bailiff. That is one of the core issues here given that the production of those documents may arguably amount to notice under rule 14.04. If not strictly notice, then it would at least be evidence relevant to the granting of discretionary relief by this Court.
16. Despite the bailiff disputing production of those documents at that time, I think it is relatively unchallenged, and in any event I so find, that those documents were available at that time. Their existence were satisfactorily proved both on the evidence of the first defendant and of the evidence of TRW. Copies of the relevant documentation, which are summarised below, were annexed to the various affidavits. It is not the role of this Court to determine the validity of the transactions by which TRW acquired title to those goods. I say that because it is apparent that there may be issues regarding those transactions under bankruptcy legislation. That is not however something that this Court has jurisdiction over.
17. The documents referred to are firstly a Deed of Loan whereby the first defendant borrowed $100,000 from TRW. That Deed, although dated 9 February 2001 was not stamped until 23 April 2003. The loan was made, according to the recital to that Deed, to enable the first defendant to have funds to meet the legal costs he incurred in the proceedings. The Deed provided that the loan was to be secured by way of equitable mortgage over the first defendant's share of the property at lot 85 Miles Road Eva Valley. Subsequently, that debt was in part satisfied by the transfer to TRW by the first defendant of his interest in certain plant and equipment which had until then been jointly owned by him and TRW. Those items of plant and equipment included the items impounded by the bailiff on 2 May 2003 as well as the forklift which the bailiff subsequently seized on 20 August 2003. The consideration for that transfer was $15,520.50 which represented, as far as I can tell on the evidence, one half of the depreciated value ie. not the market value, of those items. The consideration was not physically paid but was a partial set off against the debt owing under the Deed of Loan. There is some evidence of the inadequacy of that consideration. Again, it is not for this Court to make findings on that although I note that might likewise be grounds for challenge in another jurisdiction.
18. Documentary evidence to support the transaction in the form of evidence of value from the accountant engaged by the first defendant and TRW, and stamp duty documentation were produced. Stamp duty was paid on the transfer on the value stated and the stamp duty was paid contemporaneously with the payment of stamp duty on the Deed of Loan i.e., on 23 April 2001.
19. In one of the anomalies in this case, the bailiff said that on 2 May 2003 that he told the first defendant that he would give him 7 days to raise the money. He does not say that he said anything about the need to challenge the warrant or to give notice. The first defendant says that the conversation occurred on the 3 May 2003 by telephone and not on the 2 May and that in any event he claims that he was told "in seven days Thong will have to put an application to Court". This is more consistent with the need to give notice although the rules do not set an arbitrary 7 day period. Hence the first defendant says something which goes against the interest of TRW and the bailiff says something occurred which goes against his own interest Moreover the first defendant says that he told this to TRW and that she thereupon consulted a solicitor. Although TRW does not precisely confirm the words used by the first defendant when relaying the advice of the bailiff, her actions are consistent with advice along those lines. She says that as a result of the stickers being placed on those items, she consulted Mr Lee of T S Lee & Associates for his advice. She claims to have been advised that the bailiff could not execute against her goods. She says that Mr Lee suggested a certain course of action. It seems that no advice was given to her relative to the procedures in rules 14.04 and 14.05. Clearly Mr Lee ought to have advised TRW in relation to that. I have no doubt that had he so advised her that she would have complied with that advice as she acted in accordance with the advice that she received.