CITATION : CAMERON (as Executrix of the Will of ALEXANDER DONALD ROBERT GORDON CAMERON (DEC)) & ORS -v- MURDOCH (as Administratrix of the Estate of JAMES CAMERON (DEC)) & ORS [2003] WASC 264

BETWEEN : EDITH MARY MAUD CAMERON (as Executrix of the Will of ALEXANDER DONALD ROBERT GORDON CAMERON (DEC))

LADY BARBARA MARSHALL MURDOCH (as Administratrix of the Estate of JAMES CAMERON (DEC))

KIM GORDON STANTON (as Executors by succession of the Will of JOHN EVANDER JAMES CAMERON (DEC))

KIM GORDON STANTON (as Executors of the Will of DOUGALD CAMERON (DEC))

KIM GORDON STANTON (as Executors of the Will of MARY JANE ISABELLA CAMERON (DEC))

BARBARA MARSHAL MURDOCH (as Executrix of the Will of CHARLES LESLIE EDWARD KEITH CAMERON (DEC))

MARTIN CAMERON THOMPSON (as Executor of the Will of LILIAN EFFIE THOMPSON (DEC))

OLGA MORRISON LINDON (as Administratrices of the Estate of JESSIE DOLINA ELLEN PETROFF (DEC))

EVAN JOHN CAMERON (as Administrators of the Estate of CATHERINE ANNE LOCKHEAD (DEC))

Limitation of actions - Section 32 Limitation Act - Part payment of a debt by one joint debtor after limitation period expired - Whether revives liability of other debtors - Whether implied promise to pay balance of debt required - Turns on own facts

Judgments Decrees and Orders Act 1838 (Imp), s 19

Limitation Act 1935 (WA), s 32

Limitation Act 1969 (NSW), s 54

First-named Second Plaintiff : Mr R H B Pringle QC & Mr B L Oakley

Duer v Fraser [2001] 1 All ER 249

1 MASTER NEWNES: This is an application to set aside an order made ex parte on the application of the eighth defendants for examination of the first-named second plaintiff ("Mr Cameron") as a judgment debtor. The order was made on 10 June 2003. It is submitted on behalf of Mr Cameron that the debt in respect of which the examination is sought is statute-barred.

2 The action has a very long history. It commenced in 1980 and culminated in an appeal to the Judicial Committee of the Privy Council, at a time when that avenue of appeal was still available. Fortunately, it is unnecessary to canvass the history of the action in any detail. It appears that, after some 23 years, it is almost at an end. A short point, however, has arisen in relation to proceedings that have been taken by the eighth defendants to recover the costs of the proceedings in the Privy Council from, among others, Mr Cameron.

3 On 30 May 2003, the eighth defendants applied by motion for an order that the first, second and third-named second plaintiffs attend before a Registrar of this Court to be examined as to their means to satisfy a costs order made in respect of the Privy Council proceedings. The order for examination was made on 10 June 2003.

4 It appears from an affidavit of Mr Duckham, the solicitor for the eighth defendants, filed in support of the motion, that an amount in excess of $40,000 remains owing to the eighth defendants pursuant to the costs order made by the Privy Council. The fourth-named second plaintiff, Ms Powell, has previously made part-payment in respect of the costs and has been released from any further liability.

5 Mr Cameron has applied by chamber summons filed 1 August 2003, for an order setting aside the order that he attend for examination. The chamber summons was amended by order on 16 June 2003 to add further grounds to it. Only the limitation question was argued before me as, if determined in Mr Cameron's favour, it would be determinative not only of this application, but of any claim by the eighth defendants against him for the costs.

6 In order to set the matter in context, it is necessary to go back to a little of the history of it. The plaintiffs' appeal to the Privy Council was heard in November 1985. The appeal was dismissed on 12 February 1986 and an order was made that the plaintiffs pay, among others, the eighth defendants' costs of the appeal to be taxed. The costs were taxed on 5 June 1986 and allowed in an amount of [sterling]12,063.84. On 30 August 1991, the judgment of the Privy Council was registered under s 19 of the Judgments Decrees and Orders Act 1838 (Imp), which has been adopted in Western Australia. A caveat was subsequently lodged against the property of one of the other plaintiffs.

7 On 12 November 1991, the eighth defendants made an application to this Court to examine Ms Powell, one of the second plaintiffs, as to her means to satisfy the costs order. On 31 August 1992, an order was made granting leave to issue execution against Ms Powell. On 23 December 1992, Ms Powell and the eighth defendants entered into a deed to give effect to a settlement that had been reached between them. The deed recited that the sum of [sterling]12,063.90 was due and payable by the plaintiffs pursuant to the order of the Privy Council and that Ms Powell had agreed to pay to the eighth defendants the sum of $12,000 "in full satisfaction of any claim which the Releasors have or may have in the future against her alone in respect to [sic] her liability pursuant to such balance of costs payable in favour of the Releasors". By the deed, it was agreed:

"(1) in consideration of the sum of twelve thousand dollars ($12,000) paid by the Releasee to the Releasors the receipt of which is hereby acknowledged the Releasors themselves and their and each of their successors personal representatives and assigns HEREBY RELEASE the Releasee in respect of all future claims and demands of any nature which they have or may have against the Releasee only in respect to such Costs Order ... preserving and maintaining however their rights to the remaining Second Appellants [second plaintiffs] and the First Appellant [first plaintiff] ... "

8 The deed provided that the parties to it would keep the terms of it confidential. The deed, by cl 3, also provided that if the other respondents to the appeal received any funds from Ms Powell in satisfaction of the costs order made against her and paid any amount to the eighth defendants, then the eighth defendants would hold those moneys on trust for Ms Powell up to a maximum of $12,000.

9 It is submitted by Mr Cameron that the claim against him by the eighth defendants for the balance of the costs is statute-barred by reason of s 32 of the Limitation Act 1935 (WA). That provides, so far as is relevant, as follows:

"No action or suit or other proceedings shall be brought to recover any sum of money secured by any ... judgment ... but within 12 years next after a present right to receive the same shall have accrued to some person capable of giving a discharge for or release of the same; unless in the meantime some part of the principal money, or some interest thereon, shall have been paid, or some acknowledgement of the right thereto shall have been given in writing signed by the person by whom the same shall be payable, or his agent, to the person entitled thereto, or his agent; and in such case no action or suit or proceedings shall be brought but within 12 years after such payment or acknowledgement ... "

10 It was submitted that, since more than 12 years have elapsed since the judgment for costs was obtained in 1986, it is now statute-barred and accordingly the judgment cannot be enforced in this State by execution or otherwise: Mulder v Mulder (1939) 43 WALR 38.

11 Counsel for the eighth defendants, whilst not conceding that point, submitted that, in any event, there had been payment of part of the principal money by one of the joint debtors, Ms Powell, in or about December 1992 and, accordingly, the liability of all of the debtors had been revived by that payment for a further period of 12 years.

12 It was submitted by counsel for Mr Cameron that, first, the payment made by Ms Powell was not a payment within s 32 of the Limitation Act and, secondly, that if it was, a part-payment by one joint debtor does not start time running afresh against the other joint debtors.

13 On the second point, without making any concession, senior counsel for Mr Cameron acknowledged that he could find no authority to support that proposition. Counsel, quite properly, drew my attention to cases on the Real Property Limitation Act 1874 (UK) which pointed the other way. He referred to Re Frisby, Allison v Frisby (1890) 43 Ch D 106, Bailie v Irwin [1892] 2 IR 614 and Halsbury's Laws of England, 2nd ed vol 20, pp 666 to 667, footnote (g).

14 In Re Frisby, Allison v Frisby (supra) the question was whether payments of interest by a mortgagor had the effect of keeping the mortgagee's claim alive against the surety under s 8 of the Real Property Limitation Act 1874, a provision in similar terms to s 32 of the Limitation Act. The Court of Appeal held that it did. Cotton LJ said at 116:

"The section says nothing about the person by whom the money is paid, and in my opinion it is satisfied if the payment is made by anyone liable to pay. If the surety takes the benefit of the section he must also take the burden."

"In my opinion a payment satisfying the words of the section is made whenever there is a render of money to a person entitled to receive it by a person liable to pay it. I agree that payment by a stranger would not do, the money in that case not being paid in discharge of a liability of the person paying it. If we were to confine 'payment' to a payment by the person against whom or his representative the action is brought, I think we should be doing a great injustice. It is usual for the mortgagor - not the surety - to pay the interest, and it would be contrary to good sense and the common understanding of mankind that while he is doing so the statute should run in favour of the surety unless he makes a payment or gives an acknowledgement."

16 In Brew v Brew [1899] 2 IR 163 it was held that where part of a judgment debt had been recovered by way of execution against one joint judgment debtor it kept the debt alive against both judgment debtors.

17 In my view, what was said in Re Frisby applies with equal force to the position of co-debtors under s 32 of the Limitation Act. Accordingly, the payment of part of the debt by one joint debtor has the effect of reviving the liability of all of the debtors for the debt.

18 It is therefore necessary to deal with the first point.

19 It was submitted on behalf of Mr Cameron that the payment of $12,000 by Ms Powell was not a part-payment under s 32 of the Limitation Act in that it did not acknowledge, expressly or impliedly, a liability to pay the balance or some part of the balance. Counsel argued that the payment was made in order to obtain a release of Ms Powell from all future liability in respect of the debt. It was not therefore a part-payment on behalf of the joint debtors within the meaning of s 32 of the Limitation Act. Counsel also drew attention to the fact that the deed expressly provided that it was confidential and that the parties covenanted not to disclose its terms to any person, including the joint debtors. He also observed that, under cl 3 of the deed, the eighth defendants may become liable to repay part of all of the money to Ms Powell in the events referred to in that provision.

20 In support of his argument, counsel referred to Bucknell v Commercial Banking Co of Sydney Ltd [1937] HCA 35; (1937) 58 CLR 155. In that case, the question was whether a letter written by the debtor to the creditor was a sufficient acknowledgement of a statute-barred debt to revive the debtor's liability to pay. On the question of when a debt, against which time is running or has run, can be revived, counsel referred to the statement of the principle in the judgment of Dixon J, at 163 - 164 as follows:

"An express promise in writing by the debtor to pay revives his liability. But the liability is revived only according to the tenor of the promise. If it is so expressed as to be conditioned or subject to limitations, the conditions must be fulfilled before the liability becomes enforceable and the limitations must be observed ... but although a document relied upon as an acknowledgement contains no express promise, it may effect a revival of the debtor's liability if there is found in it a distinct admission of the debt. The law implies from an acknowledgement of the existence of a liability a promise to discharge it. Words clearly acknowledging that the writer is liable suffice to raise that implication but although the promise is implied as an artificial consequence of the written admission of liability and is not the result of a search after the true meaning disclosed by the writing, yet if the document in which the admission occurs expresses an intention inconsistent with the making of such a promise or an intention consistent only with the making of a qualified promise, the implication will be rebutted or qualified accordingly ... [I]f the document in which the admission of liability is found contains an expression of some qualification which is inconsistent with an unconditional or unrestricted promise to pay, the promise implied from the acknowledgement of the debt will be qualified by the condition or limitation expressed."

21 Senior counsel for Mr Cameron also referred to Surrendra Overseas Ltd v Government of Sri Lanka (1977) 2 All ER 481, where a similar question arose under the Limitation Act 1939 (UK). The case concerned a dispute arising under a charter party. After completion of the voyage to which the charter party related, a dispute arose between the charterers and the owner. The owners claimed balances of freight and demurrage. The charterers disputed those claims and contended that they had a cross-claim. The causes of action of both parties arose before 10 July 1968. On 20 March 1970, the charterers wrote to the owners' agent with a statement of account containing their set-off or counterclaim and stating the balance they alleged to be due to the owners. Subsequently, the charterers paid that amount to the owners. In July 1974, the owners sought to institute arbitration proceedings in respect of its claim. The question arose as to whether the owners' claim was statute-barred. The owners contended, among other things, that the payment by the charterers constituted a part-payment under s 23(4) of the Limitation Act 1939 (UK). That provision, relevantly, provided:

"Where any right of action has accrued to recover any debt or other liquidated pecuniary claim ... and the person liable or accountable therefor acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgement or the last payment."

"Since the balance paid by the charterers to the owners stemmed from the fact that the admitted liability for freight and demurrage exceeded the cargo claim, the owners contend that the payment of this balance was a 'payment in respect of' the owners' claim ... but that is not what the payment purported to be. It purported to be, and was, a payment of the only sum which the charterers admitted to be due. It was not on account; not a part-payment of any kind. On my view this is fatal to the owners' contention for the same reasons as those which define the character of an acknowledgement. A part-payment, like an acknowledgement, can only revive a cause of action and start time running afresh if it provides evidence in the form of an admission by the debtor that the debt remains due despite the passage of time ... In Cottam v Partridge [1842] EngR 562; (1842) 4 MAN&G 271 at 280, the doctrine of part-payment was in my view correctly described in the argument as 'payment of money in part-payment of a whole debt; which is an acknowledgement of a debt being due, not in words but an act done'."

23 Kerr J referred to the following passage of Buckley J in Re Footman Bower & Co Ltd [1961] 2 All ER 161 at 164:

"For a payment to have this effect it was necessary that it should amount to an acknowledgement of a debt and import a new promise to pay the outstanding balance ... [S]ince the enactment of the Limitation Act 1939 the position has been different, for section 23(4) now contains a statutory provision applicable to simple contract debts whereby any payment in respect of a debt will make time start to run afresh in respect of that debt. There is no longer need to establish a new promise to pay. In my judgment, however, one must still look at the act and intention of the debtor to see whether the payment is made in respect of the particular debt ... "

"A part-payment, like an acknowledgement, must be evidence of an admission of liability for the debt claimed."

25 In Stage Club Ltd v Miller Hotels Pty Ltd (1981) 150 CRL 535, the question was whether the reference in the balance sheet of the debtor to the creditor as a secured creditor constituted an acknowledgement of the debt under the Limitation Act 1969 (NSW). The relevant provision, s 54, provided that:

"(a) a person confirms a cause of action if, but only if, he

(i) acknowledges, to a person having (either solely or with other persons) the cause of action, the right or title of the person to whom the acknowledgement is make; or

(ii) makes, to a person having (either solely or with other persons) the cause of action, a payment in respect of the right or title of the person to whom the payment is made."

26 At 544, Gibbs CJ referred to Bucknell v Commercial Banking Co of Sydney Ltd (supra) and observed that there the Court was concerned with the statute of James I, under which it was necessary that a new promise to pay should be capable of being inferred from the acknowledgement. His Honour went on:

"Under the Limitation Act 1969 it is not necessary that any promise to pay should be express or implied. What is necessary is an acknowledgement of the existence of the debt. ... [A]lthough under the Limitation Act 1969 it is no longer necessary that there should be a promise to pay, it is still necessary, in my opinion, that an acknowledgement should admit or recognise the present existence of a cause of action; in other words, where the claim is for payment of a debt an acknowledgement, to be sufficient, must recognise the present existence of the debt. I respectfully agree with the statement of Kerr J in Surrendra Overseas Ltd v Sri Lanka (1977) 2 All ER 481 at 487 that 'to acknowledge a claim, as a matter of ordinary English, signifies an admission that it is due'. There is no acknowledgement of a debt unless there is 'an admission that there is a debt ... outstanding and unpaid': Good v Parry [1963] 2 QB 418 at 423."

27 I consider the position is the same under s 32 of the Limitation Act 1935. It is not necessary to find in an acknowledgement or part-payment any express or implied promise to pay the outstanding balance. The acknowledgement or payment must, however, admit or recognise that the debt is outstanding and unpaid.

28 In this case the deed pursuant to which the payment was made expressly acknowledged that the amount of the costs of [sterling]12,063.90 remained outstanding and unpaid. The sum of $12,000 was paid so that Ms Powell would be relieved from any further liability to the eighth defendants for the balance of the debt. The fact that the part-payment was in exchange for that release does not, in my view, make the payment any less a payment of part of the debt. Nor does the fact that by the part-payment Ms Powell was released from any further liability for the balance of the debt make the part-payment any less an admission that there is a debt outstanding and unpaid. Indeed, the release was obtained by Ms Powell specifically because there was an outstanding, unpaid debt. The release could not, of course, affect such rights of contribution as exist between the joint debtors.

29 It follows, in my view, that the payment by Ms Powell was a payment of part of the principal money within the meaning of s 32. Accordingly, it revived the liability of the joint debtors as from that date for a further period of 12 years and, therefore, the claim for the balance of the debt against Mr Cameron is not statute-barred by reason of s 32 of the Limitation Act.