Practice and procedure - Application for an order suspending the enforcement of a judgment pursuant to Civil Judgments Enforcement Act 2004 (WA) s 15 - Turns on own facts

Civil Judgments Enforcement Act 2004 (WA), s 15

Rules of the Supreme Court 1971 (WA), O 14 r 3(2)

Grant v Banque Franco-Egyptienne [1878] 3 CPD 202

Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203

Re Utsa Pty Ltd (in liq) (Unreported, VSC, 26 June 1998)

Ruffles v Chilman [1999] WASCA 112

Sami v Roads Corporation [2009] VSCA 44

State Bank of Victoria v Parry [1989] WAR 240

1 LE MIERE J: The plaintiff applies for an extension of time in which to apply for an order under s 15 of the Civil Judgments Enforcement Act 2004 (WA) (the Act) and for an order that the order made on 24 October 2008 that the plaintiff pay the first defendant's costs of the originating motion be suspended until action CIV 2388 of 2008 is finalised.

2 By a notice of motion dated and filed on 15 October 2008 the plaintiff applied for an injunction to restrain the first defendant (ASICA) from disposing of, transferring, conveying, incurring any encumbrance on or otherwise dealing with the property at Lot 83 Colby Way, Thornlie (Colby Way Lot). The plaintiff's application came on for urgent hearing on the afternoon of 15 October 2008. After hearing argument from the parties I granted an interim injunction restraining ASICA from dealing with the Colby Way Lot. At the time I stated that the plaintiff's case was, in essence, that in late June or early July 2007 an oral agreement was reached between the plaintiff on behalf of himself and his company, T Boase Investments Pty Ltd, Mr Dryka, Mr Dryka's company, MKT Thornlie Nominees Pty Ltd, Mr Jneid and companies controlled by Mr Jneid, being R and Z Investments Pty Ltd and ASICA. After referring to the plaintiff's argument and various documents put into evidence to support it I outlined some of the difficulties in the plaintiff's case. I then stated that notwithstanding those matters I was, with some reservation, satisfied that the plaintiff had made out a serious case to be tried. I said that in coming to that decision I had regard to the fact that the plaintiff was acting in person and had put together the evidence in support of his application at very short notice and had not in his affidavit set out all of the material which he put forward in oral argument in support of his application. For those reasons I granted an interim injunction for a short period to permit the plaintiff to put on proper proof of his case and to permit the defendant to put forward an answer to that case if the defendant saw fit.

3 The originating motion came on for hearing on 24 October 2008. The defendant relied upon affidavits sworn by Mr Jneid and Mr Dryka. The plaintiff relied upon the material before me on 15 October 2008 and upon a further affidavit sworn by the plaintiff. After hearing argument I refused to continue the injunction for reasons concerned with the adequacy of damages and the balance of convenience.

4 On 24 October 2008 I ordered that the plaintiff's originating motion be dismissed and that the plaintiff pay ASICA's costs.

5 In the meantime, on 21 October 2008 the plaintiff commenced action CIV 2388 of 2008.

6 The initial defendants were Mr Jneid and ASICA. On 13 May 2009 the writ was amended to add Westside Developments Pty Ltd, a company associated with Mr Jneid, as a third defendant. The indorsement of claim says that the plaintiff's claim arises from a partnership agreement between the plaintiff and the defendants to deliver a 25% share of the Colby Way Lot joint venture. The indorsement of claim also refers to equitable estoppel, unconscionable conduct and misleading and deceptive conduct by the defendants. The amended statement of claim is a difficult document. It includes a narrative of events and argument. The prayer for relief claims the repayment of money and damages from each of the defendants. However, the primary thrust of the plaintiff's case appears to be directed at Mr Jneid rather than ASICA.

7 Section 15(1) of the Act provides that a 'person against whom a judgment is given may apply for an order suspending the enforcement of all or part of the judgment'. Section 15(3) provides that '[on] such an application the court may only make such an order if there are special circumstances that justify doing so'.

8 The plaintiff relies upon two matters. First, payment of the costs would cause him hardship and hinder or prevent him prosecuting action CIV 2388 of 2008. Second, the plaintiff says that his motion in CIV 2358 of 2008 is closely connected with his claims in CIV 2588 of 2008.

9 The principles applicable to the exercise of the discretion under s 15 of the Act are the same, or similar to, those formerly applicable under the Supreme Court Act 1935 (WA) and the Rules of the Supreme Court 1971 (WA): see Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203, [3] (McLure JA) in relation to suspending the enforcement of a judgment pending appeal.

10 In Ruffles v Chilman [1999] WASCA 112 Steytler J said:

... it is difficult to see what 'special circumstances' there are which should make it inexpedient to enforce the order (as to which see the provisions of O 47 r 13(1) of the Rules of the Supreme Court). The only other matter which was relied upon by the respondents in this respect was the impecuniosity of the appellant. However, the cases establish that the risk of bankruptcy would not ordinarily constitute a special circumstance for the purposes of O 47 r 13(1)(b) (see State Bank of Victoria v Parry [1989] WAR 240 at 245 and the cases there referred to). That being so, there is nothing which should displace the normal starting point which is, as the Chief Justice has said in State Bank of Victoria v Parry (supra), at 244, that a party who has obtained a money judgment is, on the face of it, entitled to proceed to execution without delay [21].

11 In State Bank of Victoria v Parry [1989] WAR 240 Malcolm CJ noted that 'a stay of execution on a summary judgment is often granted where the defendant has a counterclaim against the plaintiff' (246). Order 14 r 3(2) makes express provision for such a stay. The Chief Justice went on to observe that where the counterclaim arose out of a separate and distinct transaction, or where there was no connection between the claim and the counterclaim, the proper order was for judgment for the plaintiff with costs, without a stay pending the trial of the counterclaim (246). His Honour said:

The degree of connection between the claim and counterclaim, the strength of the counterclaim and the ability of the plaintiff to satisfy any judgment on the counterclaim are some of the considerations which the court may take account of in the exercise of its discretion whether or not to order a stay. In general, therefore, a counterclaim which is in effect an unconnected cross-action will not provide a basis for a stay under O 14, r 3. Consistently with this position a stay of execution of a judgment will not ordinarily be granted simply because the defendants bring a cross-claim in another action against the plaintiff, in the absence of special circumstances rendering it inexpedient to enforce the judgment: Wagner v Laubscher Bros & Co [1970] QB 313.

12 Malcolm CJ also addressed the situation where the judgment debtor has a claim against a party closely associated with the judgment creditor. Malcolm CJ said:

It would seem that where company A sues company B and obtains judgment and company C, which is very closely associated with company B, has a claim against company A for an amount not less than the amount of the judgment, the court may be prepared to lift the corporate veil and grant a stay. Where it does so, it is in effect treating the claim by company C as if it were a counterclaim by company B. In substance, this was the position in Burnet v Francis Industries PLC [1987] 1 WLR 802 (246).

13 In Sami v Roads Corporation [2009] VSCA 44 Williams AJA said that the 'possibility of setting off obligations under a costs order against some future order in favour of an applicant has been proffered as the justification for a stay' [27]. His Honour referred to Grant v Banque Franco-Egyptienne [1878] 3 CPD 202:

... where a stay of costs orders associated with an application was sought on the basis that the amount payable could be set off against costs which might be payable if the applicant were successful in the action. The application was refused, and Jessell MR (with whom Cotton and Thesiger LJJ agreed) said:

'It was quite unheard of, in courts where the practice of several taxations prevailed, that the mere chance of the litigant obtaining costs upon a decision at some subsequent stage of the case was to prevent his paying the costs already ordered to be paid under a separate judgment. Certainly no such rule ever existed in the old Court of Chancery and no such practice has been established under the Judicature Act; it does not seem to me that we ought to establish any such practice and that part of the application ought to fail' [27].

Williams AJA also referred to Re Utsa Pty Ltd (in liq) (Unreported, VSC, 26 June 1998) where Chernov J 'distinguished the facts in Grant from those before the court. [Chernov J] awarded a short stay of an order for costs in favour of liquidators who were obliged to pay costs, yet to be taxed, to the applicant in another proceeding' [28].

14 The plaintiff says, in effect, that he is in difficult financial circumstances. He is unemployed and has no substantial assets which might be realised to pay the outstanding costs.

15 The evidence presented by the plaintiff in relation to his financial circumstances is not comprehensive. Nevertheless, the material presented satisfies me of two things. First, the plaintiff has the ability to borrow money to pay the outstanding costs order. Second, to do so would impose a financial hardship on the plaintiff in that it would reduce the funds available to the plaintiff which he might borrow for the purposes of meeting his day-to-day living expenses.

16 In his written submissions of 2 April 2009 the plaintiff said that his application for a suspension order 'is asking the court for the opportunity to put his claim in CIV 2388 of 2008 which in all probability will be denied him if his application fails'. The plaintiff is self-represented in CIV 2388 of 2008 and hence requiring him to pay the outstanding costs order will not deprive him of funds which he is applying to meet his legal costs in CIV 2388 of 2008. In his affidavit of 2 April 2009 the plaintiff swore:

The deponent has real concerns that the pressure to find some kind of income (over and above the Centrelink payments he 'may' receive in the near future) to stem the outgoings the household finances are currently enduring, as described in paragraph 13(ii) of his Submissions, will result in him having to abandon the action in CIV 2388 of 2008.

17 I accept that pursuing proceedings in this court involves time and energy. However, the decision of the plaintiff not to seek employment so as to be able to devote himself fulltime to pursuing his claim in CIV 2388 of 2008 is not a sufficient reason to make the suspension order. It does not constitute 'special circumstances'.

18 The plaintiff's claim in CIV 2388 of 2008 is brought against ASICA as well as Mr Jneid and Westside. It is difficult to evaluate the strength of the plaintiff's case against either ASICA or Mr Jneid. The material available to me is essentially the statement of claim in CIV 2388 of 2008 and the affidavits sworn in CIV 2358 of 2008. In granting an interim injunction in CIV 2358 of 2008 on 23 May 2008 I said:

There are difficulties with the plaintiff's argument; just some of them are these. The properties at 104 and 106 Spring Road are the subject of an offer and acceptance by which T Boase Investments Pty Ltd purchased the properties for $1,125,000 and by another offer and acceptance of the same date, that is 20 August 2007, M K T Thornlie Nominees Pty Ltd purchased 100 Spring Road, Thornlie for $2.25 million; that is, those documents are on the face of them inconsistent with the plaintiff's case in that they contain contracts or constitute contracts by which the three lots at Spring Road were to be transferred to the Boase company and the Dryka company for a total of $3.375 million and make no mention of the transfer of the Colby Way property.

Another problem for the plaintiff's case is that the draft contract for sale of land in relation to the proposed strata unit at 83 Colby Way, Thornlie, to which I have earlier referred, is a sale by R and Z Investments Pty Ltd, M K T Thornlie Nominees Pty Ltd and T Boase Investments Pty Ltd, not by Mr Jneid, Mr Dryka and Mr Boase.

19 As I have said, the plaintiff's statement of claim is a difficult document to follow. On the materials presently available to me I am not able to be satisfied that the plaintiff has a strong case against Mr Jneid and his case against ASICA, on a preliminary view, appears to have considerable difficulties in its way. Of course, CIV 2388 of 2008 is at a relatively early stage and matters may appear different at the trial of the action when all of the evidence is considered.

20 In my view the situation in this case is different from that where a judgment debtor has a counterclaim against a judgment creditor or a party closely associated with a judgment creditor. In CIV 2388 of 2008 the plaintiff seeks damages and the repayment of money. The costs order resulted from an application for an injunction to restrain ASICA from dealing with land. The costs order is a final order. It is not subject to appeal. It will not be affected by any order made in CIV 2388 of 2008. The costs were not incurred as a result of proceedings brought by any other party. The proceedings brought by the plaintiff which led to the costs order are not a necessary step in pursuing the relief sought by the plaintiff in CIV 2388 of 2008.

21 The circumstances relied upon by the plaintiff in support of his application, either taken separately or together, do not constitute special circumstances. The interests of justice do not require that there be a suspension of the order. The application will be dismissed.