Squire Constructions Pty Ltd v The Ukrainian Association of Western Australia in Perth (Inc)
[2005] WASC 280
SQUIRE CONSTRUCTIONS PTY LTD -v- THE UKRAINIAN ASSOCIATION OF WESTERN AUSTRALIA IN PERTH (INC) [2005] WASC 280
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASC 280 | |
| Case No: | ARB:24/2002 | 21 NOVEMBER 2005 | |
| Coram: | MASTER NEWNES | 19/12/05 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Act does not apply to payments made before Act came into force Act applies to any payments made after it came into force | ||
| B | |||
| PDF Version |
| Parties: | SQUIRE CONSTRUCTIONS PTY LTD THE UKRAINIAN ASSOCIATION OF WESTERN AUSTRALIA IN PERTH (INC) |
Catchwords: | Practice and procedure Whether s 24 of Civil Judgments Enforcement Act 2004 (WA) applies to payments made by judgment debtor before Act came into force Whether applies to payments made after Act came into force where judgment creditor issued enforcement proceedings before Act came into force |
Legislation: | Civil Judgments Enforcement Act 2004 (WA), s 24, s 24(1), s 104 Courts Legislation Amendment and Repeal Act 2004 (WA), s 143(2), s 145, s 146 Interpretation Act 1984 (WA), s 37(1) |
Case References: | Falk v Haugh (1935) 53 CLR 163 French v Smith (2005) VSCA 114 Maxwell v Murphy (1957) 96 CLR 261 Re Mangan; Ex parte Andrew (1983) 123 ALR 633 Re Walsh; Ex parte Deputy Commissioner of Taxation (1982) 42 ALR 727 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
THE UKRAINIAN ASSOCIATION OF WESTERN AUSTRALIA IN PERTH (INC)
Defendant
Catchwords:
Practice and procedure - Whether s 24 of Civil Judgments Enforcement Act 2004 (WA) applies to payments made by judgment debtor before Act came into force - Whether applies to payments made after Act came into force where judgment creditor issued enforcement proceedings before Act came into force
Legislation:
Civil Judgments Enforcement Act 2004 (WA), s 24, s 24(1), s 104
Courts Legislation Amendment and Repeal Act 2004 (WA), s 143(2), s 145, s 146
Interpretation Act 1984 (WA), s 37(1)
(Page 2)
Result:
Act does not apply to payments made before Act came into force
Act applies to any payments made after it came into force
Category: B
Representation:
Counsel:
Plaintiff : Mr M Levitan
Defendant : Mr A J McLean
Solicitors:
Plaintiff : Melvyn Levitan
Defendant : Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Falk v Haugh (1935) 53 CLR 163
French v Smith [2005] VSCA 114
Maxwell v Murphy (1957) 96 CLR 261
Re Mangan; Ex parte Andrew (1983) 123 ALR 633
Re Walsh; Ex parte Deputy Commissioner of Taxation (NSW) (1982) 42 ALR 727
Case(s) also cited:
Nil
(Page 3)
1 MASTER NEWNES: I have before me an application by the Sheriff under s 104 of the Civil Judgments Enforcement Act 2004 (WA) ("the Act") who seeks directions as to the amount payable by the defendant under a writ of fieri facias issued by the plaintiff in respect of arbitration awards which have been registered as a judgment of this Court.
2 Several issues were raised for determination but I understand that all but one have now been resolved. The remaining issue concerns the effect of s 24 of the Act. In order to explain how that issue arises, it is necessary to go back to the original orders made by this Court on the plaintiff's application to enforce the arbitrator's interim award of 24 July 2002 and the final award of 8 November 2002.
3 On 20 January 2003 it was ordered that there be judgment for the plaintiff against the defendant in the sum of $177,867, that the defendant pay interest on the sum of $160,182 at the rate of 10 per cent per annum from 1 June 2000 to 7 June 2002 and thereafter on the sum of $177,867 for the period 8 November 2002 until payment and the defendant pay the plaintiff's costs of the arbitration to be taxed.
4 On 4 March 2004, a writ of fieri facias was issued in respect of the sum of $160,182 owing under the interim award of 24 July 2002 plus costs of execution and interest on that sum at the rate of 10 per cent per annum from 1 June 2000 until payment. The operation of the writ of fieri facias has since been extended by order of the Court. The Sheriff has seized, pursuant to the writ of fieri facias, property owned by the defendant.
5 Since the award was made the costs of the arbitration and an appeal have been determined and substantial interest has accrued on the outstanding amount. As at 20 August 2004, the amounts owing to the plaintiff were the judgment sum of $160,182, an amount of $113,597.93 for costs and a further sum of $78,210.36 in respect of interest.
6 On 20 August 2004, the defendant made a payment to the plaintiff in the sum of $60,000. The plaintiff applied that sum against the outstanding interest. The defendant made a further payment on 1 September 2004 and the plaintiff applied that first in payment of the outstanding interest as at that date and the balance in reduction of the outstanding costs. Further payments on 15 September 2004 and 27 September 2004 were treated in the same way. Following the last payment, the moneys owing comprised the sum of $160,182, being the original judgment sum, and an amount of $8,945.86 for costs.
(Page 4)
7 On 9 September 2005, the defendant made a further payment in the sum of $116,475.03, which the plaintiff applied first against outstanding interest of $15,772.57, second to extinguish the outstanding costs of $8,945.86 and the balance of $91,756.60 in reduction of the judgment sum. There remains, therefore, an amount of $68,425.40 owing by way of the judgment sum, plus some small amounts which have accrued in respect of interest and costs since that time.
8 The defendant says that, pursuant to s 24 of the Act, all of the payments made by the defendant must be applied first to the principal sum and then to the interest and costs. When so applied, the effect is to extinguish the defendant's indebtedness to the plaintiff entirely. Accordingly, the writ of fieri facias has been satisfied and should be discharged.
9 The plaintiff, on the other hand, says that it was entitled to apply the moneys first to interest and then to costs and the principal sum, and that there accordingly remains an amount of some $68,000 still owing under the writ of fieri facias. That impasse having been reached, the Sheriff has sought directions as to the proper calculation of the amount owing under the writ of fieri facias.
10 The Act provides, by s 24, as follows:
"(1) A judgment creditor who receives or recovers money in respect of a judgment debt, whether or not under an enforcement order, must apply the money so as to discharge —
(a) firstly, the judgment sum;
(b) secondly, any interest due to the judgment creditor on the judgment sum; and
(c) thirdly, any enforcement costs in connection with the judgment."
(Page 5)
- Courts Legislation Amendment and Repeal Act 2004 (WA) and, in particular, on s 145 and s 146 of that Act. Those provisions, so far as relevant, provide as follows:
"145. Pending proceedings to enforce a judgment
(1) If immediately before commencement proceedings for or in connection with enforcing a judgment are pending in a court, then on commencement either —
(a) the proceedings may be continued under the law in force immediately before commencement, despite the enactment of the Civil Judgments Enforcement Act 2004; or
(b) the person entitled to the benefit of the judgment may discontinue the proceedings and commence proceedings under the Civil Judgments Enforcement Act 2004 to enforce the judgment.
(2) If proceedings are continued under subsection (1)(a) —
(a) no enforcement process may be issued under the law in force immediately before commencement for or in connection with enforcing the judgment; but
(b) subject to the Civil Judgments Enforcement Act 2004, the court may make any order under that Act that substantially corresponds with any order that the court could have made in the proceedings under the law in force immediately before commencement.
…
146. Pending process to enforce a judgment
(1) If immediately before commencement any enforcement process is in force, then on
(Page 6)
- commencement the process continues in force under the law in force immediately before commencement until —
(a) the process ceases to be in force under that law;
(b) the process ceases to be in force under subsection (6)(a); or
(c) the expiry of 12 months after commencement,
whichever happens first, and may be served, dealt with, or executed, under the law in force immediately before commencement which continues to apply to and in respect of the process.
- …"
12 It was argued on behalf of the plaintiff that the effect of those provisions is that, enforcement proceedings in connection with the judgment having been commenced before 1 May 2005, those enforcement proceedings continue under the law in force prior to that date and that, accordingly, the common law as to the application of moneys to a debt continues to apply.
13 In the course of argument I suggested to counsel that the correct position may lie somewhere between their clients' respective positions; namely, that the common law position as to the application of moneys paid in respect of an interest-bearing debt applied up to 1 May 2005 and that thereafter any payments received by the creditor must be applied in the manner prescribed by s 24 of the Act. I invited counsel to provide any further written submissions as to that by 25 November 2005 and a calculation of the amount that would be outstanding if it were correct. I have since received those submissions.
14 I consider that the position is that common law rule applied up to 1 May 2005 and thereafter s 24 of the Act governed the application of any payments received by the creditor.
15 In Falk v Haugh (1935) 53 CLR 163 at 173 Rich, Dixon, Evatt and McTiernan JJ said:
(Page 7)
- "It has long been a rule that when payments are received generally on account of a debt, which is in part interest and in part principal, they are treated as applicable to interest in priority to principal … The rule affords only a presumption in the absence of any actual or express appropriation by the debtor or the creditor."
16 It is the right of the debtor, however, to direct in the first instance how the payment is to be applied and once the debtor has so directed, the destination of the payment cannot be changed by the creditor: Re Walsh; Ex parte Deputy Commissioner of Taxation (NSW) (1982) 42 ALR 727; Re Mangan; Ex parte Andrew (1983) 123 ALR 633 at 640. See also French v Smith [2005] VSCA 114.
17 It was not suggested that there was any direction by the defendant in this case.
18 In my view, it follows that the plaintiff was entitled to apply the money as it did prior to 1 May 2005. I do not accept the defendant's contention that the effect of s 24 is that all payments made prior to the coming into force of the Act are, upon the Act coming into force, to be treated as having been applied in the manner specified in that section. There is nothing in the Act which provides that it is to have any retrospective operation. In Maxwell v Murphy (1957) 96 CLR 261 at 267, Dixon J said:
"The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events."
19 Moreover, s 143(2) of the Courts Legislation Amendment and Repeal Act 2004 provides that nothing in the transitional provisions of that Act limits the operation of the Interpretation Act 1984 (WA). Section 37(1) of the Interpretation Act relevantly provides that where a written law repeals an enactment, the repeal does not, unless the contrary intention appears, affect any right, interest, title, power or privilege created, acquired, accrued, established or exercisable, or any status or capacity existing, prior to the repeal.
20 There is, in my view, nothing in the Act which is capable of rebutting the presumption that s 24 is to apply only to the payments
(Page 8)
- received on or after the date on which the Act comes into effect. There is nothing in the Act to suggest any retrospective application. Indeed, the relevant terms of s 24(1) are cast in the future tense and are not apt to refer to moneys already received or recovered by a judgment creditor.
21 I do not, however, accept the plaintiff's submission that the effect of the transitional provisions is to continue to preserve the common law position with respect to the application of payments made by a debtor. What, in my view, is preserved by the transitional provisions is the enforcement process, namely the validity of any writ, order or other process issued by the Court in connection with enforcing a judgment, and the law applicable to that process. The presumption at common law as to the application by a creditor of payments made by a debtor is quite a different matter and not one with which those provisions are concerned.
22 Accordingly, s 24 deals with the manner in which any moneys received or recovered by a creditor as from 1 May 2005 are to be applied, regardless of whether or not any enforcement proceedings (whether pre or post 1 May 2005) have been commenced.
23 It follows, in my view, that the plaintiff was entitled to treat the payments it received prior to 1 May 2005 as it has. From that date, and in particular in relation to the payment made on 9 September 2005, it was required to apply the money in the manner set out in s 24 of the Act. The consequence of that is that an amount of $60,413.20, plus the Sheriff's costs, remains owing under the writ of fieri facias. There is a slight discrepancy between the figures provided by the parties for the Sheriff's costs which will need to be resolved.
24 I will hear the parties on the form of orders that should be made and on the costs of the application.
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