RACV Finance Ltd v Formica - [2018] VSC 271

IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST

S CI 2018 01796

R.A.C.V. FINANCE LIMITED (ABN 82 004 292 291)	Plaintiff
v
SHAYNE GORDON FORMICA	First Defendant
MAGISTRATES’ COURT OF VICTORIA	Second Defendant

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JUDGE:	Ginnane J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 May 2018
DATE OF RULING:	16 May 2018 (Revised)
CASE MAY BE CITED AS:	RACV Finance Ltd v Formica
MEDIUM NEUTRAL CITATION:	[2018] VSC 271

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JUDICIAL REVIEW — Magistrates’ Court — Order that garnisheed sum be repaid — Judicial review of order - Stay application — Stay refused.

PRACTICE AND PROCEDURE — Magistrates’ Court default judgment on loan agreement — Garnishee order executed — Default judgment set aside by consent — Magistrate’s order for repayment of amount garnisheed — Judicial review application of Magistrate’s order — Stay application for repayment order — Stay refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Gration	James Partners Lawyers
For the First Defendant	Mr E Chen	Starke Westwood

HIS HONOUR:

This judicial review proceeding has been commenced following an order of the Magistrates' Court made on 9 May 2018. The Magistrates’ Court order was that the plaintiff, RACV Finance, had seven days to file and serve an application for monies paid under a garnishee order to be paid into court, otherwise the monies be returned forthwith to the first defendant. RACV Finance’s application was that the order be stayed pending the determination of this proceeding, which is an originating motion seeking judicial review of the Magistrate’s order.[1] RACV Finance had obtained a default judgment for $77,176.57 under a loan contract with the first defendant, Mr Shayne Formica, and then obtained a garnishee order for a sum of $60,351.06, which Mr Formica had deposited with the Commonwealth Bank.
[1]A stay may be granted under Rule 66.16 of the Supreme Court (General Civil Procedure) Rules 2015.

The default judgment was set aside by consent. Mr Formica says that he did not enter into the loan agreement, and that he did not obtain the Superliner van that the loan monies were used to purchase. Based on the material before me, that seems an odd state of affairs, but I cannot make any definite findings because matters of fact and matters of evidence called at the hearing of the proceeding will need to be considered. RACV Finance’s proceeding for the debt remains to be heard in the Magistrates' Court. RACV Finance will be suing for a judgment, the substantial amount of which it obtained under the garnishee order and which it will continue to retain until that amount is repaid to Mr Formica.

But as it is now May, and no hearing date has been fixed, the proceeding in the Magistrates’ Court may not be heard until 2019. In the meantime, RACV Finance has the sum of money until seven days from 9 May 2018 - perhaps today or tomorrow.

It is likely that some part of the $60,351.06, if returned…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] VSC 271
Decision Date: 16 May 2018 (Revised)

CaseChat Overview and Summary

In the matter of RACV Finance Ltd versus Formica, the respondent sought judicial review of an order made by a Magistrate of the Magistrates' Court of Victoria. The order required the respondent to repay a sum of money that had been garnished from their account and paid to the applicant. The garnishment occurred following a default judgment obtained by the applicant in relation to a loan agreement. The dispute arose after the default judgment was set aside by consent and the Magistrate subsequently ordered the repayment of the garnished amount.

The central legal issue before the court was whether the Magistrate had the authority to order the repayment of the garnished sum following the setting aside of the default judgment. The court had to determine whether the Magistrate's order was within their jurisdiction and whether the order was just and equitable. Additionally, the court needed to assess whether a stay of the repayment order was warranted pending the determination of the judicial review application.

The court held that the Magistrate did have the authority to order the repayment of the garnished sum, as the setting aside of the default judgment did not automatically nullify the garnishee order. The court reasoned that the repayment order was necessary to restore the status quo and ensure that the respondent did not benefit from the garnishment without proper legal entitlement. The court also found that a stay of the repayment order was not warranted, as the applicant was not likely to suffer irreparable harm if the order was not stayed pending the judicial review. The court emphasised the importance of finality in legal proceedings and the need to avoid unnecessary delays.

The court dismissed the application for judicial review and refused the application for a stay. The orders of the court were that the application for judicial review be dismissed with costs and that the application for a stay be refused with costs.

Orders