Bucknell v Robins [2008] QCA 214

**[1] de JERSEY CJ: I have had the advantage of reading the reasons for judgment of Fraser JA. I agree with the order proposed by his Honour, and with his reasons.

[2] FRASER JA: The applicant, Mr Bucknell, applies for leave to appeal against the refusal of his application in the District Court for an order authorising him to satisfy the order debt he owes the respondent, Mr Robins, by payment of instalments.

[3] Mr Bucknell's order debt arises out of litigation he commenced in which he alleged negligence against Mr Robins, a solicitor who acted for Mr Bucknell in the purchase of his grazing property. Ultimately, on the second day of a three day trial, Mr Bucknell abandoned his proceedings. Following an appeal by Mr Robins from the trial judge's order that there be no order as to costs, on 6 December 2004 this Court ordered Mr Bucknell to pay Mr Robins' costs of those proceedings. Mr Bucknell was also ordered to pay Mr Robins' costs of the appeal but an indemnity certificate was granted for those costs under the Appeal Costs Fund Act 1973 (Qld).

[4] On 4 December 2006 a Registrar assessed the costs payable by Mr Bucknell to Mr Robins under the order at $28,696.95. Mr Bucknell did not pay that order debt or any part of it.

[5] On 8 October 2007 Mr Bucknell made an ex parte application against Mr Robins for an instalment order authorising him to pay the order debt by instalments. He represented himself, as he has done in all steps of his litigation. Mr Bucknell's evidence revealed that his income was derived from his business as a grazier and from Centrelink drought relief "exceptional circumstances" payments. The judge expressed concern that Mr Bucknell's evidence did not include material demonstrating that Mr Bucknell would have money available to pay the order debt by instalments. Mr Bucknell responded in these terms: "Well there never is . . . on a rural business, I'm afraid . . . it's always . . . touch and go . . ." When Mr Bucknell mentioned that he had not yet paid any part of the order debt, the judge observed that Mr Bucknell's failure to pay might lead to a lack of confidence as to whether Mr Bucknell could pay any of the instalments he proposed. There was also some inconclusive discussion about whether Mr Bucknell should apply at the same time for an instalment order in relation to the appeal costs, which had not by then been assessed. Mr Bucknells' application was adjourned with a view to it being reheard in early 2008 by the same judge after Mr Bucknell had prepared further material that demonstrated his financial capacity to pay the debt by instalments.

[6] Mr Robins' solicitors were then served with an unsealed copy of the application and supporting affidavit. They responded by letter on 19 October 2007 asking Mr Bucknell to indicate the amount that he would be able to pay by way of instalments. Mr Bucknell did not answer that question.

[7] Because the applicant later filed further, identical applications for the same instalment order the matter was mentioned on 7 December 2007 before a different judge. It became clear at that hearing that Mr Bucknell's application for an instalment order did not concern the appeal costs. It related only to the $28,696.95 debt. During the course of this hearing, the judge said:**

"But the first thing you might do as a matter of commonsense is start paying some money, I mean that - what you can afford, I mean that's - that's one of the most persuasive things but that's only - that's only commonsense advice, not for the Court. I think I'll just adjourn it over to February again and see what - and see what happens in the meantime."

**Mr Bucknell's application was again adjourned to the following year.

[8] The application was heard on 31 January 2008. Mr Bucknell then submitted that he could pay the order debt by $1,500 per month over two years but he indicated a preference for a five year period.

[9] The judge identified the relevant rules of the Uniform Civil Procedure Rules 1999 (Qld), r 869(1) and r 869(2), which provide:**

"(1) In deciding whether to make an instalment order, the court must have regard to the following -

(b) the enforcement debtor's means of satisfying the order;

(c) whether the order debt, including any interest, will be satisfied within a reasonable time;

(d) the necessary living expenses of the enforcement debtor and the enforcement debtor's dependants;

(f) if the applicant is the enforcement debtor - whether, having regard to the availability of other enforcement means, making the order would be consistent with the public interest in enforcing money orders efficiently and expeditiously.

(2) In deciding the amount and timing of the instalments, the court must be satisfied that the instalment order will not impose unreasonable hardship on the enforcement debtor."

[10] After a careful analysis of Mr Bucknell's evidence, the judge concluded that Mr Bucknell's financial reports for 2005-2007 did not support the view that he had the capacity to pay instalments in those years of income. His Honour then observed:

"[34] The property has, on anecdotal information, a gross value of about $2million. The Applicant is substantially in debt. The business is a very marginal operation. The business appears to be the only asset base and the sole income source (other than drought relief payment) of the Applicant.

[35] I have not been provided with any projection of income and expenditure for the current year or for the 2008-2009 period or subsequent years that may be relevant.

[36] There is no independent or expert analysis of the capacity of the business to make regular instalment payments. Even if a sum of $1,000 per month was paid, the instalment order would extend over about three years.

[37] The applicant has not made any payments at all. It seems that he has simply stalled the inevitable day when the respondent finally forces the issue of payment of the debt. I infer that the applicant remains, despite his protestations to the contrary, aggrieved at the failure of the litigation and the order debt made against him and has been hoping for 'better financial days' to arrive to enable him to deal with the issue in a manner least painful to himself.

[38] The applicant has had the benefit of observations made by two judges of this court as to what he needed to provide by way of evidence or what he needed to do in support of his application. His honour Judge Pack told him that his ability to pay instalments could be demonstrated by his making an interim payment to reduce the debt. However, the applicant has refused, failed or neglected to do any of those things suggested by the court and he now has an application that is inadequately supported by any cogent or reliable evidence and he also faces the imminent impact of the execution of an Enforcement Warrant."

**[11] The judge concluded that there was no merit in the application and refused it.

[12] Mr Bucknell now wishes to appeal from that decision. There is no right of appeal. Pursuant to s 118(3) of the District Court of Queensland Act 1967 (Qld) an appeal lies only by leave of this Court. The discretion to grant leave is not fettered, but leave will usually be granted only where there is a reasonable argument that the primary judge erred and that an appeal is necessary to correct a substantial injustice to the applicant: Arnold Electrical & Data Installations P/L v Logan Area Group Apprenticeship/Traineeship Scheme Ltd [2008] QCA 100 at [5].

[13] Mr Bucknell argues that the judge erred in concluding that the evidence of his capacity to pay instalments was unsatisfactory. He contends that he had the capacity to adjust his livestock sales to increase his income to pay the instalments. The evidence to which Mr Bucknell points is the 2007 book value of stock of $116,274.49 and his assertion in submissions that its market value was $300,000. That is a wholly inadequate foundation for Mr Bucknell's argument. The accounts revealed a net profit in 2007 of some $49,000 as opposed to a loss in 2006 of about $31,000 and that the book value of stock on hand increased from about $63,000 to about $116,000. But liabilities were also said to have increased, and by a larger amount: his overdraft, apparently converted in 2007 into a term loan, had increased from about $69,000 to about $90,000, and another loan had increased from $300,000 to $360,000. The 2007 accounts indicated that Mr Bucknell held less than $10,000 in cash. There was no evidence of his anticipated living expenses in the instalment period. There was no evidence that he had any further borrowing capacity. Indeed, according to Mr Bucknell's submissions, his bank had declined to lend him the money necessary to pay the order debt. Further, an unsworn account by Mr Bucknell's wife suggested that expenditure had exceeded income by some $10,000 in the period between July and December 2007. No current or budget figures or estimates were provided. Mr Bucknell did not swear that he would or would be able to sell stock or in any other way fund future instalments in any particular amount at any particular time.

[14] Plainly there was no error in the judge's view that the evidence was unsatisfactory. Despite the helpful remarks about the necessary evidence made by the judges at the two earlier hearings, Mr Bucknell's evidence simply did not provide the information required by r 869(1)(b), r 869(1)(c), r 869(1)(d), r 869(1)(f) and r 869(2).

[15] Mr Bucknell also argues that the judge erred by not giving adequate weight to what Mr Bucknell contended was the primary purpose of the instalment order provisions in the Rules, namely to mitigate hardship to a debtor where that can be done by ordering payment by instalments rather than in a lump sum. He argued that because he could meet the debt in full only by an immediate sale of significant numbers of his herd, which constituted his working capital, greater hardship would be caused to him being required to pay the whole debt than would be the case if he could pay by instalments. The Rules provide no support for Mr Bucknell's proposition that the consideration of hardship to the debtor must necessarily be given more weight than any other consideration, such as the public interest in enforcing money orders efficiently and expeditiously. More fundamentally though, whatever weight might have been given to the competing considerations expressed in the Rules, the evidence that Mr Bucknell chose to adduce fell far short of showing that it was just to make an instalment order.

[16] Mr Bucknell next argues that the judge denied him "due process" under r 872(1)(c) by "pre-empting the applicant's character and presuming that he will not pay the instalments even though his Honour has no evidence to make such assumption about the applicant's character". Rule 872(1)(c), which provides that an instalment order ceases to have effect if the enforcement debtor fails to make two consecutive payments, of course does not render irrelevant the criteria expressed in r 869. The judge's findings were not based upon any assumption about the applicant's character, but rather upon the evidence. That evidence notably included Mr Bucknell's failure to make any payment at all of the debt he had incurred on 6 December 2004 (later quantified on 4 December 2006) in the following lengthy period before he applied for an instalment order. It included also his continued failure to make any payment and his failure to adduce evidence of a budget showing a future capacity to pay instalments after the critical importance of both matters had been drawn to his attention in the two earlier hearings.

[17] Mr Bucknell argues that the judge erred by relying upon Mr Bucknell's failure "to make a goodwill or similar type payment to the respondent prior to the instalment order application". It was not a matter of goodwill. Mr Bucknell had a legal obligation to pay the debt he had been ordered to pay. His further argument in oral submissions in this Court that he should have been granted the instalment order because Mr Robins' insurer had not vigorously pursued him for payment until after he applied for an order reflects the same error and seeks to take advantage of an indulgence that had been granted to him. His failure to pay any part of the debt over a lengthy period was plainly a relevant consideration for the judge.

[18] It is convenient to mention here Mr Bucknell's statement in his oral submissions that he has paid $9,000 of the debt by instalments of $1,500. Counsel for the respondent accepted that payments have been received but relayed his instructions that only $7,500 has been received and that it was all received after the date of the order refusing Mr Bucknell's application. I understood Mr Bucknell to concede both points in his further oral submissions. Obviously if this evidence were received it would not demonstrate error in the order that preceded the payments. Nor, in the circumstances I have outlined, would the mere fact of these payments persuasively establish Mr Bucknell's willingness or capacity to maintain similar payments over the following years. Nor does it say anything as to his capacity to pay his debt more quickly. For these reasons, it does not assist him in this application.

[19] Mr Bucknell's further contention that Mr Robins had always sought payment of the whole debt serves only to emphasise the importance of Mr Bucknell's failure to make any payment. His additional argument, that his failure to make any such payment was irrelevant because the court is empowered by r 868(2)(b) to make an instalment order at any time before the ordered debt is paid, confuses the power of the court with the considerations relevant to the question whether the discretion to make an order should be exercised. There is also no substance in Mr Bucknell's submission that paragraph [37] of the judge's reasons reveals a misinterpretation of the Rules. His Honour appropriately relied upon Mr Bucknell's failure to make any payment as bearing upon the cogency or reliability of Mr Bucknell's assertions concerning his capacity or willingness to satisfy any instalment order.

[20] Mr Bucknell seeks to explain his failure to pay any part of his debt by his contention that the judge penalised him as an unrepresented party for waiting and relying upon the final direction of the court. This contention must be emphatically rejected. I have described what happened at the earlier hearings. Instead of the judge at the first hearing summarily dismissing Mr Bucknell's application, as would have been justified on the state of the evidence, his Honour granted the indulgence of an adjournment to Mr Bucknell to enable him to supplement his evidence. Mr Bucknell was informed of the nature of evidence required if his application were to have any prospects of succeeding and of the relevance of his continued failure to pay the order debt. His assertion that the judge encouraged him not to pay any part of the order debt until the appeal costs issue was resolved lacks substance. Nothing said by either of the judges at the earlier hearings could reasonably have conveyed to Mr Bucknell that he was not obliged to pay the order debt. The contrary is true. After a discussion at the first hearing about possibly combining the appeal costs with the order debt in an instalment application, the judge told Mr Bucknell that "it would be to your advantage to try and find a means to pay something in some way". I have already quoted the emphatic remark to similar effect by the judge at the second hearing.

[21] Mr Bucknell contends also that the judge gave inadequate consideration to the fact that the debt was a business debt arising out of his negligence action and that Mr Robins was indemnified by a large insurance company. He elaborated upon this in his oral submissions, contending that he was denied a "level playing field" in his dispute with Mr Robins who, unlike Mr Bucknell, could afford legal representation. Reference to the genesis of the debt, in litigation commenced by Mr Bucknell against Mr Robins which Mr Bucknell abandoned only after significant legal costs had been incurred, does not assist Mr Bucknell's cause. It should not be assumed, as it was in Mr Bucknell's oral submissions that the merits lay with him in that original dispute. The dismissal of his claim established the contrary. In any event, the merits in the litigation that preceded the order debt have no bearing upon the question whether an instalment order should be made. As to Mr Bucknell's reference to the financial strength of Mr Robins' insurer, Mr Bucknell's application was not refused because of any misapprehension by the judge as to the financial capacity of the insurer to cope with payment of the debt by instalments.

[22] Mr Bucknell argues that he should not have been penalised for his delay in applying, which he states was attributable to his ignorance of the relevant provisions in the Rules. It was not, however, his delay in making the application that proved fatal. Mr Bucknell's application was refused because, having regard to the criteria expressed in the rules, the judge considered that it was not just to make an instalment order.

[23] In considering whether the refusal of the instalment order has caused any injustice to Mr Bucknell it is also relevant to note that, although Mr Bucknell's evidence was deficient, there are indications that he may well have had the capacity to pay the order debt in full. Mr Bucknell asserted to the judge that he did have the capacity to borrow "under certain circumstances" but that "I don't want to borrow any more money; it's more interest". Similarly, in argument in this Court, Mr Bucknell asserted that he did have the capacity to pay the debt but that he did not want to sell his breeding herd as that would "affect" him later on. No doubt he preferred not to incur further interest or sell significant numbers of his breeding herd, but he adduced no evidence that payment of his debt in full would in fact cause him hardship nor as to the likely significance or extent of any such hardship. No such evidence was put before this Court.

[24] In oral submissions, Mr Bucknell also sought to be relieved from an order that he pay Mr Robins' costs of the unsuccessful application. Mr Bucknell's argument that Mr Robins only had himself to blame for appearing on Mr Bucknell's ex parte application overlooks the uncontradicted affidavit evidence by the solicitor representing Mr Robins that in or about October 2007 "the plaintiff sent an unsealed copy of the application ..., his affidavit in support and the transcript of the [first] hearing ... to our client." In any event, Mr Robins was legitimately interested in opposing the application, which Mr Bucknell presumably served because he appreciated that, if an order were obtained ex parte, Mr Robins would apply under r 868(5) to set it aside. No ground has been shown for interfering with this discretionary costs order.

[25] Mr Bucknell argued in his oral submissions that he should be relieved from an order that he pay Mr Robins' costs concerning the costs of an execution warrant issued by Mr Robins. The relevant costs order is not contained in the application books. It is not referred to in Mr Bucknell's application to this Court, which refers only to an order giving Mr Robins liberty to have costs of applications assessed. No notice of this application was given in Mr Bucknell's outline of submissions or otherwise, so far as the application books reveal. In these circumstances it is inappropriate to consider this argument.

[26] The order refusing Mr Bucknell's application was a discretionary one. Mr Bucknell has not demonstrated a reasonable argument that the discretion miscarried. I am not persuaded that there was an arguable error or any injustice in the result. I would therefore refuse the application for leave to appeal, with costs.

[27] LYONS J: I have had the advantage of reading the reasons for judgment of

Fraser JA. I agree with the reasons and the order proposed by his Honour.**