Solomon v Corbel
[2011] QMC 36
•17 October 2011 (ex tempore)
MAGISTRATES COURTS OF QUEENSLAND
CITATION:
Solomon v Corbel [2011] QMC 36
PARTIES:
IAN SOLOMON
(applicant/ enforcement creditor)
v
ROBYN CORBEL
(respondent/ enforcement debtor)
FILE NO/S:
M469/10
DIVISION:
Magistrates Courts
PROCEEDING:
Application for orders that the Registrar sign the bailiff’s contract for the sale of the enforcement debtor’s property for the amount of $250 000; and the Registrar execute the transfer of the property.
ORIGINATING COURT:
Magistrates Court at Southport
DELIVERED ON:
17 October 2011 (ex tempore)
DELIVERED AT:
Southport
HEARING DATE:
17 October 2011
MAGISTRATE:
Costanzo JJ
ORDER:
Application refused
CATCHWORDS:
CIVIL LITIGATION – PRACTICE AND PROCEDURE – REAL PROPERTY – forced sale - enforcement of judgement debt by sale of real property - whether a magistrate can or should order the registrar of the court to sign a bailiff’s contract and to execute a transfer – whether application is originating process or interlocutory
Uniform Civil Procedure Rules 1999, r 833
Anderson v Liddell (1968) 117 CLR 36; [1968] ALR 321; (1968) 41 ALJR 354.
Anderson v Liddell [1967] QR 410.
Bateman v. Scott [1916] 53 Supreme Court of Canada 145
Margeorg Pty Ltd v Kavanagh [2009] QSC 211.
Owen v Daly [1955] VLR 442.
COUNSEL:
R Holt (solicitor) for applicant
Respondent on own behalf
SOLICITORS:
Michael Sing Lawyers for applicant
Respondent on own behalf
I have before me an application by Ian Solomon, the enforcement creditor, against Robyn Corbel, who is the enforcement debtor.
The application applies for two orders by this Court. One, that the Registrar, of the Magistrates Court at Southport, sign the bailiff's contract for the sale of the enforcement debtor's property at unit 1, 27 Wildwood Crescent, Surfers Paradise, with the description Lot 1 on BUP 12991, for the amount of $250,000, as a vendor, and Petwin Proprietary Limited ACN 062167444 as trustee under instrument 709955494, as purchaser. Secondly, that the Registrar of the Magistrates Court at Southport execute the transfer of the property described at Lot 1 on BUP 12991, certificate of title 18580010, in form 1 approved by the Department of Environment and Resource Management.
The applicant in this proceeding has been represented. The respondent is not represented by any legal representative in this matter.
The parties have relied upon the following material. The applicant has filed and read the two affidavits by Ian Solomon. One being filed on 27 September and the other on 13 October this year. The applicant also relies upon the affidavit of Robyn Corbel, the respondent; that affidavit being filed on 5 October this year. Ms Corbel relies upon her own affidavit as well.
In hearing this application today I was very ably assisted by Mr Holt, for the applicant, and he presented to me a written outline of his submissions referring to many useful decisions in superior Courts, to offer some guidance to this Court as to whether it should exercise its jurisdiction, or discretion.
Three issues are raised for determination in the hearing.
Was the respondent properly served?
Firstly, there was the question of whether the respondent had been properly served with this application. Perhaps rule 8 of the Uniform Civil Procedure Rules is the starting point. Rule 8 provides that a proceeding starts when the originating process is issued by the Court.
These rules provide for the following types of originating process, and they cover claims, applications, notice of appeal, and notice of appeal subject to leave. The rule also states that, "An application in, about or pending the trial, hearing, or outcome of a proceeding is not an originating process." And it is noted that this is commonly called an interlocutory application.
In my view the application in this matter is not an originating application, because it is an application which is about the outcome of a proceeding. It is concerned with the enforcement of a judgment debt which arose as a result of a money order made by this Court, by another Magistrate. In my view, therefore, it is an interlocutory application.
Rule 27 provides for the service of an application, and states that, "An application must be filed and then served on each respondent at least three business days before the day set for the hearing of the application." Rule 833, pursuant to which this is made, requires service of the application in the absence of an order by the Court, and it is conceded that the application was originally made ex parte. The respondent, however, concedes that she turned up on the date that the application was returnable, and that she was served in person at Court.
Rule 27, paragraph 3, provides, "If an application is not served as required by sub-rule (1) the Court must not hear and decide the application unless the Court considers it just to hear and decide the application on the day set for hearing, and one of the following applies; (a) the Court is satisfied delay caused by giving notice of the application would cause irreparable or serious mischief to the applicant or another person; (b) the Court is satisfied the respondent to the application will suffer no significant prejudice if it hears and decides the application on the day set for hearing; or, (c) the respondent to the application consents to the Court hearing and deciding the application on the day set for hearing."
In this case when the matter did come on, on the date set on the application, Magistrate Duroux heard both parties, and gave directions for the preparation of the trial of the issues, which was to occur today, and in my view the respondent has not suffered, and was not going to suffer any significant prejudice by having the matter heard today.
Those directions included the filing of affidavits and material in support of the application, or in defence of it, and those directions were adhered to by each party.
Therefore, in my view, the absence of the original service of the application, required, does not cause prejudice to the respondent, and the application was able to proceed today.
Do I have jurisdiction?
The second issue which arose for determination was the jurisdiction of a Magistrates Court to make the kind of order sought. Rule 833 makes reference to the Court, and that is clearly a reference back to those Courts referred in the preceding rules, in part 4, but also rule 3 of the rules is relevant.
Uniform Civil Procedure Rules provides in rule 3 that, "Unless these rules otherwise expressly provide, these rules apply to civil proceedings in the follow Courts; the Supreme Court, the District Court, the Magistrates Courts." And in ‑ paragraph 2 provides, "In a provision of these rules the reference to 'the Court' is a reference to the Court mentioned in sub-rule (1) that is appropriate in the context of the provision." So the Magistrates Court is the appropriate Court referred to, in this context, in rule 833.
However, that in my view is not the end of the matter, and one must have regard to sections 4 and 7 of the Magistrates Court Act 1921. Section 4 is headed, "Jurisdiction of Magistrates Courts", and sets out those types of matters in relation to which the Court has the power and authority to hear and determine in a summary way, those actions mentioned.
It is a very limiting section and paragraph (a), and all of these paragraphs, are subject to this Act. Paragraph (a) covers every personal action in which the amount claimed is not more than the prescribed limit, whether on a balance of account or after an admitted set off or otherwise, and I don't see how it can be said that this application is for a personal action in which an amount is claimed.
Paragraph (b) covers every action brought to recover a sum of not more than the prescribed limit, which is the whole or part of the un-liquidated balance of a partnership account, or the amount, or part of the amount of the distributive share under an intestacy, or of a legacy under a will. This application before me is clearly not within that paragraph.
Paragraph (c), the only remaining paragraph, is for every action in which a person has an equitable claim or demand against another person in respect of which the only relief sought is the recovery of a sum of money, or of damages, whether liquidated or un-liquidated, and the amount claimed is not more than the prescribed limit. Clearly this application is not such an equitable claim or demand.
Section 7 specifically deals with the issue of title to land and estates, except as by this Act provided. "A Magistrates Court shall not have jurisdiction to try any case in which the title to land, or the validity of a devise, bequest or limitation under a will or settlement is in question."
Subsection (2) states, "If the title to land incidentally comes in question in an action, the Court shall have power to decide the claim which it is the immediate object of the action, but the judgment of the Court shall not be evidence of title between the parties, or their privies in another action, in that Court or in any proceedings in any other Court."
In my view, Ms Corbel's title to her land is in question and it is directly raised by this application. Because the applicant says that he has a right to an order in the terms sought, which would have the direct very real and substantial effect of divesting her of title to her property, and of transferring it to the applicant.
No authority was referred to by the parties to help me with this issue, but I did refer the parties during argument, to the one case I was able to find, which was a Supreme Court of Canada decision, and it is the case of FJ Bateman v. C and M Scott [1916] 53 Supreme Court of Canada 145.
The majority of the Court concentrated on the nature of the real substantial question being whether the conveyance in that case had been fraudulent. In my view here, the real substantial question can be said to be whether I should exercise my discretion to make an order under the supervisory jurisdiction of a Court over the enforcement of its decisions. But at the end of the day, as Justice Brodeur stated at page 149, "In the case of Bateman v. Scott, this is an action concerning the title to real estate."
Mr Holt could not refer me to any authority on the question, whether the order sought under rule 833 is such an action, nor to any authority where a Magistrate has ever made, or can make such an order, in the terms which are sought in the application. That is, ordering the Registrar to sign a contract to sell the property.
It was suggested in argument that the transfer of the property would be a resultant administrative action of any such order made, and not the direct - that the transfer of title is not the direct question for the Court's determination. However, Mr Holt also concedes that such an order would affect the respondent's property rights.
The decision I've referred to of Justice Brodeur was a dissenting judgment. I've also referred to the majority judgments in that decision, which is quite persuasive in this jurisdiction.
But at the end of the day, I'm satisfied that because the order would affect the respondent's property rights, that title to land is in question in this case and that I lack the jurisdiction to deal with it. However, if I am wrong on that, I will still state further reasons for why, in my view, the application should be dismissed.
Does UCPR Rule 833 give a magistrates court power to make the orders sought?
Rule 833 does not, on its face, give any such power to make an order in the terms sought. The rule provides for the obtaining of an order to sell property at the best price obtainable. It says nothing about ordering the signing of contracts or other terms sought by the application.
If I am wrong as to that, I further state that the rule clearly requires that the applicant prove to the Court what the best price obtainable would be.
Has the applicant proved the best price obtainable and that I should exercise the discretion in his favour?
It is also clear when one compares rule 833 with the preceding rule, 832, that the best price obtainable may be somewhat less than a sale to the highest bidder where there is a reserved price set for the auction.
Rule 833 applies if the enforcement debtor's property has not been sold under rule 832. So the starting point is rule 832. That rule is headed "Nature of sale", and outlines what the enforcement officer must do in selling the property by public auction. In particular, at paragraph 3, the rule provides that, "The property sold by public auction must be sold under the following conditions of sale: (a) For goods if the person conducting the auction considers the particular lot in which the goods are to be auctioned is worth less than $500 or for other property if the enforcement debtor agrees, at the best price obtainable."
So that phrase is the same phrase as is used in rule 833 sub-rule 2. Rule 832 sub rule 3 paragraph (b) provides "Otherwise, if the reserve is reached to the highest bidder" which, for all practical purposes, may be an amount considerably more than a best price obtainable.
Paragraph (c) provides, "If the person conducting the auction considers there is a dispute as to who is the highest bidder, the property is to be auctioned and knocked down to the highest bidder."
Sub rule 8, paragraph 8 provides in rule 832 that, “If the property put up for sale at public auction is not sold by auction, the enforcement officer may sell the property privately, (a) For an amount not less than the highest bid made at the auction, that the enforcement officer considers is a reasonable amount of the property; (b) If no bid was made at the auction for an amount the enforcement officer considers is a reasonable amount for the property or; (c) In accordance with a Court order.”
In this rule, according to paragraph 9, “Reserve for property to be sold at auction means the reserve amount set by the enforcement officer, being an amount the enforcement officer considers is not less than a reasonable amount for the property.” So rule 832 paragraph 8 is primarily concerned with attaining a reasonable amount for the property.
Paragraph (a) aims to achieve an amount at least equal to or greater than the highest bid, but it must still be a reasonable amount for the property. A reasonable amount for the property is envisaged then as being something potentially, but not necessarily, more than the highest bid.
Paragraph (b) only covers a situation where there is no bid at the auction, so it’s irrelevant to these proceedings because there were clearly bids at this auction, as set out in the affidavit material.
Paragraph (c) is irrelevant because there’s been no application for a Court order. In fact, it could be said that the whole of that paragraph is irrelevant today for present purposes, because the parties - or I should say the enforcement officer - there is no evidence that the enforcement officer attempted a sale privately under those conditions, nor is there any evidence that the enforcement creditor, the applicant, sought any such private sale from the enforcement officer after reaching the highest bid at the auction. But whether that attempt has been made, in my view, is relevant to the exercise of discretion under rule 833.
It was said to me in argument today that it was not sought to try to go down the track of rule 832 paragraph 8, as a private sale, with or without a Court order, because it was thought that it might be worse for the respondent, for the judgment debtor. I don’t agree with that supposition when the comparison is made between the terms “best price obtainable” and the aim of paragraph 8 in rule 832 to achieve a reasonable amount for the property.
Also the process of a private sale under rule 832, paragraph 8, can be transparent and fair, because there is the ability to seek an order of a Court. So if an enforcement officer feels he has a reasonable price, but is concerned about that or any other term of sale he can seek the Court’s concurrence with what he’s proposing to do by seeking an order under paragraph (c). It seems to me that proceeding directly to rule 833 has the aim of achieving the lowest price possible.
I’ve been referred to a number of cases which assist this Court in the exercise of its discretion. But at the outset I must state that each of the cases referred to were cases which looked backwards at what had already occurred where there had been sales, and where purchasers had gained certain rights and interests.
And where the issue before those Courts was then to determine whether that Court should set aside the sale, which, in my view, raises substantially different considerations to what this Court has to do looking forward as to whether a sale should occur, and looking at what would be the best price obtainable.
There were no cases referred to which deal with this Court’s role under Rule 832, paragraph 8, subparagraph (c), or under Rule 833, sub-rule(2). However, I do acknowledge that each of the cases is persuasive authority and that they act as a very strong guide as to the factors that I could take into account, and must take into account in deciding whether there is evidence of the best price obtainable and as to whether or not the Court should exercise its discretion to make an order under rule 833.
As I said the Court’s role in those cases seems to be to look backwards, whereas this Court needs to look forward. When this Court is looking forward to whether a sale should occur in all the circumstances, and whether there is evidence of the best price obtainable, there is more opportunity to apply guidelines which would avoid inequity, unfairness and injustice, for example, by way of an unconscionable bargain. Provided the Court can find that there is evidence of the best price obtainable and that the Court should exercise its jurisdiction, then the Court should make an order.
But in the cases referred to the relevant parties were, in most instances, far removed from being parties to any proceedings like the parties are in this matter where Mr Solomon was not only the judgment creditor as a result of a defamation action brought against the respondent, but he was also the highest bidder at the auction.
So in those cases that have been referred to me there were, in some cases, purchasers involved in the proceedings to set aside who had already acquired some rights and interests in the property due to the contract already being signed.
Those cases which I have been referred to include Margeorg Pty Ltd v Kavanagh [2009] QSC 211, the High Court decision in Anderson v Liddell (1968) 117 CLR 36; [1968] ALR 321; (1968) 41 ALJR 354, and Owen v Daly [1955] VLR 442. I am thankful to Mr Holt for referring me to extracts from those cases, and for providing me with copies of those cases, which I’ve now had the time to read in full.
In those cases it was important for the Courts to examine the conduct of the bailiff to determine whether there had been any collusion or other improper conduct in arriving at the sale, and as I said, the issue is whether those sales should be set aside. In Margeorg's case, the Court noted at paragraph 21 that, "There was no debate about Margeorg being anything but a stranger to the facts relating to the conduct of the sale." And his Honour referred to the decision of Lucas J, in Anderson v. Liddell in the original trial, reported at [1967] QR 410, where his Honour referred to Owen v. Daly, and stated,
"In Owen v Daly, the judgment creditor was closely involved. He was himself the purchaser of the Sheriff's sale at the nominal price, sufficient only to defray the expenses of selling. Dean J found that the sale was not a real sale at all, and while recognising that this was an unusual remedy, set it aside, remarking that in doing so, he saw no hardship to the judgment creditor."
In the case of Anderson v. Liddell in the High Court, Justice Kitto thought it was significant that one of the parties was a purchaser from the Sheriff, and stated, "I do not see, as at present advised, any ground upon which a purchaser from the Sheriff can be denied his right to have a transfer registered in accordance with that section, unless the jurisdiction of a Court of Equity to act in personam be attracted by proof of collusion between him and the Sheriff."
In the case before me, Mr Solomon is not a purchaser, he is a judgment creditor who was allowed to bid at the auction and became the highest bidder. He is most certainly not prevented from bidding, and the mere fact that he was the judgment creditor should not draw adverse inferences against him. But, it is a relevant and natural concern for any interested bystander and, no doubt, for the vendor and the enforcement officer, that he was in that position of special knowledge. He had special interest in the matter, as he already owned one half of the parcel of land, upon which the duplex the subject of this application, was built; and he has a potential conflict of interest having a special knowledge of the circumstances of the sale.
In deciding the best price obtainable, in my view the Court must act on evidence and there is a discretion to exercise which may not be exercised favourably to the applicant if the evidence does not satisfy the onus on the applicant to prove the best price obtainable, or if there are other discretionary factors weighing against the exercise of the discretion.
Here, when I have regard to the affidavit evidence, in the applicant's affidavits, there is no - or in the respondent's affidavit, there is no evidence of the reserve price. And in my view, the reserve price is not relevant to this immediate consideration, except to the extent as conceded, that there was a reserve, and that it must have been more than $250,000, therefore the property was passed in at the enforcement officer's auction. But otherwise, the lack of evidence of the reserve price is not relevant to my consideration here today. It is only relevant to that purpose, which was conceded, of drawing the inference that there was, obviously, a reserve price, it wasn't reached, and it had to be more than the highest bid of $250,000 and the property was therefore passed in.
The evidence relied upon by the applicant in his affidavit was basically that he was the highest bidder, at $250,000, and that that is the best obtainable price. He relied upon a number of newspaper articles, which pointed out the difficulties of the current property market. Some would, perhaps, view the articles as running down the present property market. Others might simply refer to the articles as pointing out the current difficulties in the market at the time of writing. But the articles, to me, seem selective at best. They refer principally to apartments, and high-rise apartments, to ordinary houses and units, as opposed to a site like the one in question, which is a potential redevelopment site. If the applicant were able to purchase the respondent's duplex, then he would own the total parcel, which is 790 square metres and zoned Residential B.
Those newspaper articles refer also to things like the high end of the market having suffered the worst falls, and there is no evidence that this property is in the high end. They also referred often to new apartments, these properties in question are not new apartments, and they referred to things like the oversupply of rentals. I just do not consider the newspaper articles to be helpful in any respect. All they manage to do is point out what everybody currently knows or ought to know, that there are many sectors of the property market which are depressed; that it is, in some quarters, a buyers market.
The applicant offers no evidence of valuation. There could have been, for example, an analysis of recent sales factoring in forced sales in the current market. It could have factored in things like the extent of advertising penetration achieved by the auction process, and that the property is zoned B and has potential for redevelopment. It could have included an analysis of the suburb, generally, and the street in particular, and in my view, if the applicant had faith in what such a valuation would show, he could have presented such evidence, but there is no such evidence to assist the Court.
There seems, on the evidence, and the tactics adopted in this case, to be more interest in obtaining the property than the actual judgment debt. The respondent, on the other hand, has at least given evidence, in her affidavit, of a considerable amount of RP Data. Much of it, perhaps, definitely irrelevant given the dates of the sales, given the intervention of the global financial crisis, and the buyers market that some quarters find themselves in. But there is no evidence that this particular property would find itself in that quarter.
The RP Data presented does show, however, that the next door property, at number 27, sold for $387,000; the land content was 253 square metres, and it sold on the 24th of April 2009. That's compared to the total land value where the applicant and respondent each own a duplex, being 790 square metres. On the 23rd of December 2008, the RP Data shows that a lot with an area of 363 square metres at number 27, that is, the other half of that property, sold for $395,000. It can be observed that each of those sales was during some part of the global financial crisis. The applicant himself is shown, on the RP Data sheet, to have bought his duplex for $301,000 on the 10th of July 2006, which was, perhaps, before the global financial crisis.
The respondent's affidavit also gives uncontradicted evidence of the fact that a valuation had been provided to the enforcement officer in the range of 310 to $320,000. In my view, it is reasonable to infer, in the absence of evidence to the contrary, that the valuation would have taken into account all the circumstances of a forced sale by an enforcement officer, if the valuation is being provided to an enforcement officer for the purpose of his sale at auction.
I am not satisfied that the best obtainable price is $250,000. In all the circumstances, and all the evidence before me, the applicant has failed to discharge his onus to satisfy me firstly, of what the best obtainable price is, and it is most certainly not $250,000; and secondly, has failed to satisfy me that I should, in any case, exercise my discretion to make an order as sought.
Order
The application is therefore refused.
0
1
1