Body Corporate 343562 v McGowan
[2013] NZHC 2621
•9 October 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2013-404-3746 and SH 19/2013
[2013] NZHC 2621
BETWEEN BODY CORPORATE 343562
Plaintiff
AND
MALCOLM McGOWAN
Defendant
| Hearing: | (on the papers) |
Appearances: | M Donovan for the Plaintiff |
Judgment: | 9 October 2013 |
JUDGMENT OF WOODHOUSE J
This judgment was delivered by me on 9 October 2013 at 3:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.
Registrar/Deputy Registrar
……………………………………
Counsel / Solicitors / Parties:
Mr M Donovan, Barrister, Auckland
Mr G Skeates (plaintiff’s instructing solicitor), Graeme Skeates Law, Solicitors, Auckland Mr M McGowan, Ireland
BODY CORPORATE 343562 v McGOWAN [2013] NZHC 2621 [9 October 2013]
[1] On 3 August 2012 the plaintiff obtained a judgment against the defendant in the District Court at Auckland in a sum of $15,710.31. In August 2013 the plaintiff, to enforce that judgment, sought a sale order from this Court. A sale order was issued on 23 August 2013. By email on 25 August 2013 a Deputy Sheriff of this Court advised the defendant, who lives in Ireland, that the amount outstanding on the sale order was $19,286.21.
[2] On 19 September the defendant sent an email to the Court stating that he had on three earlier occasions asked the plaintiff’s counsel for a bank account for transfer funds, or advice as to how to make payment, and that he had not received a reply. The Deputy Sheriff was asked for details of an account. On 20 September the defendant, through an agent, advised the plaintiff’s counsel that NZ$19,286.21 had been sent “to First Street’s account” with a value date of 24 September, being the “earliest the system would allow”. “First Street” is a reference to First Street Body Corporate Management Limited, the body corporate manager for the plaintiff. It seems that payment was made by the defendant in this way because there had not at that point a reply from the Deputy Sheriff. A reply was sent on 23 September with particulars of the Court’s bank account.
[3] The amount remitted by the defendant was $19,286.21. The amount paid into First Street’s account was $12 less than that, being a charge imposed at some point in the transmission of the funds.
[4] The plaintiff now seeks leave to apply this payment against debts other than the judgment debt arising from the District Court judgment. The details are in a memorandum from counsel for the plaintiff. The plaintiff’s preference is that part of the payment be applied first in satisfaction of a debt said to be owed by the defendant to a third party, Lighter Quay Residents Society Incorporated (Lighter Quay). The proposition that part of the payment be applied to the debt of a third party seems to be on the basis that the defendant’s payment was made to First Street rather than directly to the plaintiff, Body Corporate 343562, and First Street is also the body corporate manager for Lighter Quay. The defendant’s debt to Lighter Quay is said to be $9,862.75. The plaintiff wishes to apply the balance of the defendant’s payment towards a debt of $38,104.84 said to have been incurred by the defendant
with the plaintiff since the District Court judgment. In the alternative the plaintiff seeks an order that the defendant’s payment be applied solely to the alleged debt of
$38,104.84.
[5] The plaintiff submits that it is entitled to apply the defendant’s payment in this way on the basis that the defendant has not directed that the payment is to be applied in satisfaction of the District Court judgment. As a consequence, it is submitted, the plaintiff is entitled to appropriate the payment, and First Street is entitled to appropriate the payment, to the most recent debts, and the debts referred to in the preceding paragraph are said to be the most recent. The plaintiff referred to the discussion of rights of appropriation of a debtor and of a creditor in Doody v
Body Corporate 343562.[1]
[1] Doody v Body Corporate 343562 [2012] NZHC 6.
[6] I am satisfied that the defendant’s payment must be applied by the plaintiff and by First Street in satisfaction of the District Court judgment. I consider that it is clear beyond reasonable argument that the payment was made in satisfaction of the District Court judgment. It was not a general payment to First Street to be appropriated by First Street to more recent debts that may have been incurred by the defendant with the plaintiff, let alone appropriated in payment of a debt said to be owed to a third party. The payment was not made for the benefit of First Street at all. It was made to First Street on behalf of the plaintiff. The fact that the payment was made to satisfy the District Court judgment is abundantly clear from the communications to and from the defendant summarised earlier.
[7] I am also satisfied that the sale order should be discharged. There is the shortfall of $12 arising from the transfer debit. Mr Donovan submitted that if the defendant’s payment was to be applied in satisfaction of the District Court judgment there would still be the $12 owing in respect of which the plaintiff would wish to proceed to sale pursuant to the sale order. This would be sale of a property owned by the defendant in Auckland. There is no justification for permitting a property to be sold to recover a judgment debt of $12.
[8] I also note that this application is deficient in a number of respects other than the matters already addressed. It is an application in part on behalf of Lighter Quay, but Lighter Quay is a third party not before the Court. It is an application made without sworn evidence to support it. And it is an application made in respect of alleged debts which have apparently not been subject to any Court decision.
[9] If the plaintiff, or Lighter Quay, wishes to recover other sums from the defendant they will need to issue appropriate proceedings. However, in the hope that that might be avoided a copy of the plaintiff’s memorandum should be sent to the defendant, as well as a copy of this judgment . If the other debts are in fact owed the defendant may consider it prudent to pay them more promptly than he has paid the debt that gave rise to the District Court judgment.
Woodhouse J
0