Marinchek v O'Sullivan

Judgment 1This is a Notice of Motion filed by the judgment debtor seeking a review of the Registrar's decision made on 20 March 2014 to rescind an instalment order that had initially been made in chambers, following the filing of a Notice of Motion to pay by instalments on 7 February 2014. 2The parties have been involved in lengthy and no doubt hideously expensive litigation over many years in this Court, the District Court and the Court of Appeal. Theirs is a building dispute. The judgment that is the subject of these proceedings is one entered in this court on 14 August 2013 in an amount of $75,364. Following the entry of that judgment, the judgment debtor sought a stay of proceedings which application was ultimately dismissed by consent on 7 February 2014. On that same day, the judgment debtor filed his initial application to pay by instalments. That application was dealt with by a Registrar in chambers and an order was made that the judgment debt be paid by monthly instalments in the sum of $2,462.59. The judgment creditor objected to that determination and on 20 March 2014, another Registrar rescinded the previous instalment order made. The judgment debtor now challenges the decision of the Registrar and seeks in effect the reinstatement of the initial instalment order. 3The court's power to review the decision of the Registrar derives from rule 49.19 of the Uniform Civil Procedure Rules 2005. That rule provides: 49.19 Review of registrar's directions, certificates, orders, decisions and other acts If in any proceedings a registrar gives a direction or certificate, makes an order or decision or does any other act, the court may, on application by any party, review the direction, certificate, order, decision or other act and make such order, by way of confirmation, variation, discharge or otherwise, as the court thinks fit. 4The power of the court to make an instalment order comes from section 107 of the Civil Procedure Act 2005 and the mechanism for how an application for the making of such an order is to be dealt with is found in rule 37.4 of the Uniform Civil Procedure Rules. That rule is in the following terms: (1) This rule applies if the court is dealing with: (a) an application for an instalment order pursuant to rule 37.2 (3) (b), or (b) an objection against an order made under rule 37.3 (1) (a) or (b). (2) On receiving the application or objection, the court: (a) must set the matter down for hearing, and (b) must give notice of the time, date and place of the hearing to the judgment creditor and the judgment debtor, and (c) if it has not already been done, must also give to the judgment creditor a copy of the affidavit referred to in rule 37.2 (2) (b). (3) The court may determine an application for an instalment order, or an objection against an order refusing such an application: (a) by making an instalment order in relation to the amount owing under the judgment debt, or (b) by dismissing the application. (4) The court may determine an objection against the making of an instalment order: (a) by varying or rescinding the instalment order, or (b) by dismissing the objection. (5) As soon as practicable after making its determination, the court must give notice of the determination, and (if it makes or varies an instalment order) of the terms of the order or the order as varied, to the judgment creditor and the judgment debtor. 5The matter came before me for hearing in the motions list on 1 May 2014. The judgment debtor appeared in person and Mr Lichtwark, solicitor, appeared for the judgment creditors. In the course of the hearing I gave the judgment debtor leave to file in court an affidavit sworn on that day and purporting to set out details of his financial position. He had filed an earlier financial statement in support of the initial application for an instalment order that had been dealt with by the Registrar(s). That initial affidavit was also before me, as annexure (P) to the primary affidavit that he had filed in support of his motion, being an affidavit sworn 25 March 2014. That primary affidavit contained a significant amount of unnecessary and superfluous detail dealing with and touching upon the lengthy history of the parties tortured litigious path. 6On 1 May 2014 I was not satisfied that the judgment debtor had put all relevant information before me. Given that he was unrepresented I provided him with an adjournment until 15 May to allow for further material in support of his motion to be filed and served. On the 13 May 2014 the judgment debtor filed a document entitled "Summary of submission of behalf of judgment debtor". Relevantly no further evidence was filed. Notwithstanding the judgment debtor's failure to provide further evidence I have nonetheless had regard to his further submissions. On 15 May I adjourned the matter for decision until 22 May 2014. I also made further directions on that day for the filing of written submissions concerning an application foreshadowed by the judgment creditors for indemnity costs and for an order preventing the judgment debtor from obtaining any further stay of execution. 7The thrust of the judgment debtor's application is that an order should be made that he pays the judgment debt by instalments in the sum of $2,462.59 per month. He says that if such an order is made the judgment debt will be discharged in 3 years. The judgment creditors object to such an instalment order being made for a number of reasons to which I will shortly come, and say that if the orders sought by the judgment debtor are made, then payment of the judgment debt would not be completed for approximately four years having regard to prevailing interest rates. 8As will be clear from the above, these parties are unable to even agree on the mathematical calculation for the period of time required to satisfy the judgment debt having regard to current interest rates and the quantum of the instalments. 9The judgment debtor's case can be broadly put in the following terms: (1)He acknowledges the debt and is doing his best to satisfy it. (2)He has a strong history of employment in the financial services and aged care industry. (3)He has more recently elected to voluntarily absent himself from the workforce and become a full time carer for his 3 year old son. (4)His debts significantly outweigh his assets. (5)He has no current income and is maintaining himself, his partner and his son by funds being advanced to him by what he describes as "friendly creditors". No evidence was provided by these "friendly creditors" despite the judgment creditor being given the opportunity to do so by the adjournment between the 1 and 15 May 2014. (6)He intends to return to work at some time in the future, although no precise date has been set for that return. Not even an approximate date for that return to work was advised me. He estimates that on his return to paid employment he will earn a substantial income. His affidavit sworn 1 May 2014 estimates that income to be in the weekly amount of $6,731. (7)He believes that if his application to pay by instalments is refused then the judgment creditors will proceed to bankrupt him and that, as a consequence, the judgment creditors will not be paid what is owed to them. He asserts that the best and indeed only way that the judgment debt will be satisfied is by his being allowed to pay it by instalments in the amount that he has suggested. He asserts further that if the instalment order is not made then his "friendly creditors" will terminate the current credit facility that has been provided. (8)That the granting of his application would avoid undue hardship to him and would be in the best interest of all parties. (9)That since the instalment order was initially made, he has met his obligations pursuant to it, and that he had, as at 1 May 2014 paid 2 instalments in the sum of $2,462.59. His further submission filed 13 May 2014 asserted that he had made a further instalment payment since 1 May 2014, and I note that no issue was taken with that assertion by Mr Lichtwark when the matter came before me on 15 May 2014. He says that these payments demonstrate a capacity to meet the instalment order previously made. 10The affidavits relied upon by the judgment debtor were sworn on 7 February 2014 (the first affidavit), 25 March 2014 (the second affidavit) and being the affidavit that I have earlier referred to as the primary affidavit in these proceedings, and 1 May 2014 (the third affidavit). On any view of it, these affidavits demonstrate that the judgment debtor is in a most parlous financial position. 11The first affidavit indicated that the judgment debtor's weekly income was in the sum of $122 comprised solely of social security payments. He swore to assets of $76,958 and weekly expenses of $4,879. The total of his liabilities were in the sum of $1,422,411. 12The second affidavit set out, as previously indicated, a significant degree of detail concerning the lengthy dispute between the parties. Paragraphs 50 and following deal with issues concerning this motion, and include submissions on what it is contended by the judgment debtor is the relevant law to be applied. 13The third affidavit deposes to the fact that the judgment debtor's weekly income had increased to $5,446 comprised of $140 of social security with the balance being provided from debt and borrowing facilities provided by "friendly creditors". These "friendly creditors" are not identified, nor has the judgment debtor filed with the court any affidavit evidence from them, which deals with or touches upon the terms and conditions attaching to these facilities. This it seems to me is a significant deficit in the evidence relied upon by him. The affidavit sworn 1 May 2014 indicates that the judgment debtor has assets including what he describes as anticipated assets in the sum of $575,864. In my view, the estimated interest and cost recovery assets that he deposes to within that affidavit being in the sum of $345,980, are so speculative as to not warrant my taking them into account in respect of this application. It is entirely unclear as to when, if ever, those assets would be realised. 14Whichever of the financial statements I have regard to indicates that the judgment debtor has liabilities that substantially exceed his assets. In the first affidavit this disparity is in the sum of $1,345,453 and in the third affidavit $1,466,592.00. Of course these calculations also demonstrate that in the period between the judgment debtor swearing his first affidavit on 7 February 2014 and his third affidavit on 1 May 2014, a period just short of 3 months, his overall financial position has deteriorated by an amount of $121,139. 15The judgment creditors essentially contend that: (1)Under Rule 37 of the Uniform Civil Procedure Rules, there is no further process available for the judgment debtor to bring this application. I should indicate that I do not accept this submission. The hearing before me is a hearing de novo of the application dealt with by the Registrar. (2)The judgment debtor's motion is prejudicial to the judgment creditors. (3)The judgment debtor's motion does not identify any issues or errors in the decision of the Registrar or demonstrate any basis for setting aside the order made. For the reasons indicated in (1) I do not accept this submission. The hearing before me is de novo. (4)The making of any instalment order would be futile given the judgment debtor's financial circumstances. (5)There is no evidence before the court to enable a conclusion to be drawn that the instalment order can in fact be met on a continuing monthly basis. (6)The period of time over which payment would be required to be made if the instalment order were granted is unreasonable. (7)In the circumstances of such long running and hard fought litigation the judgment creditors are entitled to the "fruits of their success".