DISTRICT COURT OF QUEENSLAND
CITATION:
Manikis & Anor v Byrne & Anor [2021] QDC 185
PARTIES:
JOHN MANIKIS and PAMELA MANIKIS
(Appellants)
v
ANDREW JOHN BYRNE
(First Respondent)
and
JOSHUA MICHAEL McPHERSON(Second Respondent)
FILE NO:
504 of 2021
DIVISION:
Civil
PROCEEDING:
Appeal
ORIGINATING COURT:
Magistrates Court, Brisbane
DELIVERED ON:
13 August 2021
DELIVERED AT:
Brisbane
HEARING DATE:
3 August 2021
JUDGE:
Farr SC, DCJ
ORDER:
1. Appeal allowed.
2. The acting Magistrate’s order of 12 February 2021 is set aside.
3. The application for an instalment order is dismissed.
4. The Magistrate’s order of 30 April 2021 is set aside.
5. Unless there are submissions to the contrary, the first respondent pay the appellants’ costs of this appeal on the standard basis.
CATCHWORDS:
APPEAL – GENERAL PRINCIPLES – INTERFERENCE WITH DISCRETION OF COURT BELOW – IN GENERAL – GENERAL PRINCIPLES – where the appellants obtained summary judgment against the first respondent in the amount of $97,487.66 (the judgment sum) – where an enforcement warrant was then issued to the appellants for the sale of property owned by the first respondent – where the acting Magistrate made an order which allowed the first respondent to pay the judgment sum in instalments pursuant to the Uniform Civil Procedure Rules 1999 (“UCPR”) r 868 – where the first respondent sought the making of an order to set aside the enforcement warrant – where another Magistrate then made an order for the enforcement warrant to be returned to the registry despite the appellants’ objection thereto – whether the acting Magistrate erred in law by failing to provide adequate reasons for the decision to grant the instalment order – whether the acting Magistrate erred in law by failing to take into account the mandatory requirements of UCPR r 869(1) when considering whether to make an instalment order – whether the acting Magistrate erred in law by failing to properly exercise his discretion in making the instalment order – whether the Magistrate acted in excess of jurisdiction when making an order for the return of the enforcement warrant, and thereby erred in law – whether the Magistrate denied the appellants natural justice and procedural fairness by giving them no opportunity to be heard by the court before an order to return the enforcement warrant was made, and thereby erred in law
LEGISLATION:
Uniform Civil Procedure Rules 1999
CASES:
Alchin v Daley [2009] NSWCA 418, considered
Bode v Commissioner of Police [2018] QCA 186 , applied
Dart & Anor v Singer & Ors [2014] QSC 316, considered
Hellier Capital Pty Ltd v Richard Albarran [2009] NSWSC 403, considered
Jakeman Constructions Pty Ltd v Boshoff [2014] QCA 354, considered
Minister for Immigration, Citizenship,Migrant Services and Multicultural Affairs v AAM17 (2021) 388 ALR 257; [2021] HCA 6, applied
Robinson Helicopter Company Inc v McDermott [2016] HCA 22, applied
Sunland Group Ltd v Townsville City Council [2012] QCA 30, appliedCOUNSEL: S W Trewavas for the appellants
M E Clarke for the first respondent
SOLICITORS: AJ & Co Lawyers for the appellants
DSS Law for the first respondent
Background
The appellants were landlords of premises. They leased those premises to a company of which the first respondent was a director. The first respondent personally guaranteed the obligations of the company. The obligations under the lease were not met and the first respondent became liable pursuant to the guarantee in April 2015.
On 7 December 2020 the appellants obtained summary judgment against the first respondent in the amount of $97,487.66 (the judgment sum).
On 13 December 2020 an enforcement warrant was issued to the appellants for the sale of property owned by the first respondent. From that date to 22 January 2021 the appellants’ solicitors took steps to enforce the judgment order over that property.
On 27 January 2021 the first respondent applied to the Magistrates Court to pay the judgment sum by instalments (the application). The first respondent proposed a payment plan that would have required payments to be made until 4 May 2026.
The application was heard on 12 February 2021 in the Brisbane Magistrates Court.
The appellants opposed the application on various grounds.
The learned acting Magistrate made the following order:
“So then the application is formally granted. I order that an instalment order pursuant to r 868 of the Uniform Civil Procedure Rules of 1999 (Qld) be made in relation to the amount of $97,487.66 in this proceeding on 7 December 2020.
I make the order authorising satisfaction of the judgment debt by instalment payments as follows: that is an amount of $380 payable weekly commencing on Monday 15 February 2021. The order will expire by satisfaction of the judgment debt in full or by further order of the court.”
The appellants filed a Notice of Appeal against that decision on 3 March 2021.
Following the filing of the Notice of Appeal, the first respondent’s solicitors emailed the Magistrates Court registry and sought the making of a further order to set aside the enforcement warrant.
The appellants were copied into the email and objected by email to the request on the basis that the correspondence was contrary to the Australian Solicitors’ Conduct Rules and therefore the request should be disregarded. The appellants submitted in that email that if the first respondent wanted the court to consider any matter, an application should be filed in the proceeding.[1]
[1] Affidavit of Ashley John Stanton and Annexures filed 20 May 2021 (Court document 6).
Notwithstanding the appellants’ response in that regard, another magistrate made the following order on 30 April 2021:
“The registrar is to direct the bailiff to return the warrant.”
The appellants sought leave to amend the Notice of Appeal such that the Magistrate’s decision of 30 April 2021 would also be subject to this appeal hearing. The first respondent did not object notwithstanding that, strictly speaking, the application was out of time given that it sought to appeal a different decision of the court.[2]
[2]Uniform Civil Procedure Rules 1999 (Qld) r 748.
Given that the amended Notice of Appeal relates to two decisions of the Magistrates Court, the appellants also sought leave to adduce further evidence, that being the correspondence that had occurred in the lead-up to the Magistrate’s decision of 30 April 2021. Irrespective of whether such evidence might be classified as fresh or new, the first respondent, understandably, did not object to its receipt by the court, and leave in respect of both issues was granted at the hearing.
Grounds of appeal
In relation to the order dated 12 February 2021 the grounds of appeal are:
1. The acting Magistrate erred in law by failing to provide adequate reasons for the decision to grant the instalment order.
2. The acting Magistrate erred in law by failing to take into account the mandatory requirements of r 869(1) of the Uniform Civil Procedure Rules 1999 when considering whether to make an instalment order.
3. The acting Magistrate erred in law by failing to properly exercise his discretion in making the instalment order.
In relation to the order dated 30 April 2021, the grounds of appeal are:
1. The Magistrate erred in law by acting in excess of jurisdiction as there was no application before the court to enliven the jurisdiction of the court to make any such order.
2. The Magistrate erred in law when he denied the appellants natural justice and procedural fairness as no opportunity was given to the appellants to be heard by the court before orders were made.
The law in relation to appeals
The procedure for appeals to the District Court is largely governed by the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) applying in the Court of Appeal. UCPR r 785(1) provides that Part 1 of Chapter 18 (other than certain designated rules) apply to appeals to the District Court. The mode of appeal is by way of rehearing.[3]
[3]UCPR r 765(1).
In Bode v Commissioner of Police [2018] QCA 186 at [42] McMurdo JA re-stated the task of a court conducting an appeal by way of rehearing to be as is described by the High Court in Robinson Helicopter Company Inc v McDermott[4] as follows:
“A court of appeal conducting an appeal by way of rehearing is bound to conduct a ‘real review’ of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings.”
[4] (2016) 331 ALR 550; [2016] HCA 22.
Submissions re: order of 12 February 2021
The appellants submit that the acting Magistrate not only failed to give adequate reasons for the exercise of the discretion to grant the instalment order, but, in fact, gave no reasons at all. The appellants further submit that any argument to the effect that the acting Magistrate’s reasons can be gleaned from the exchange between the bar table and the bench is either wrong in law[5] or alternatively, not possible given the nature of that exchange.
[5]Jakeman Constructions Pty Ltd v Boshoff [2014] QCA 354 at [13].
The appellants submit that the instalment order should not have been made for four reasons:
(a)an order that requires more than five years to repay a judgment debt is not a reasonable one. Such a period of time is excessive and would deny the appellants the fruits of their victory for an excessive period of time;
(b)it is contrary to public policy to enforce a creditor to operate as a de-facto bank, funding the debt to which the creditor is entitled to recover;
(c)there were other means by which the first respondent could pay the judgment debt, that being the sale of the real property that is owned by him; and
(d)the judgment debtor seeks to have the court allow him to retain his assets and shift the risk of payment to the judgment creditor if there were any adverse contingencies in the future.
The first respondent submits that the mere absence of adequate reasons is not an error of law or demonstrative of a relevant mistake for the purposes of an appeal when reasons were not required to be given, either by operation of the law or by request of the appellants. It is submitted that reasons were not required to be given because:
(a)of the way the hearing was conducted;
(b)there was no contest as to the facts material to the application;
(c)it was a minor, interlocutory order;
(d)it was an exercise of the court’s discretion; and
(e)the appellants did not request reasons.
Alternatively, the first respondent submits that even if reasons were required, it is clear from reading the transcript that the acting Magistrate considered each of the following matters before exercising his discretion:
(a)the reasonableness of the timeframe;
(b)public policy;
(c)the availability of other means to satisfy the debt; and
(d)the effect of shifting the risk of adverse contingencies of the future.
In any event, it is submitted that the acting Magistrate did provide reasons for his decision to grant the order, just at an unusual time. It is submitted that his use of the word “formally” in the order, should be understood as a reference to those reasons, which are contained most notably in the following passage:
“BENCH:Look, I – I disagree on the calculations there. I accept that five years, seven months is a long period of time.
MR NA:Certainly, your Honour.
BENCH:But I think on behalf of your client you’ve got to look at what’s the reality of the situation.
MR NA:Right.
BENCH:What’s the consequences? If today I say, ‘look, no, the application brought by the first defendant is dismissed’ you then go get the warrant and take the steps. What position is your client going to be in then? Have you done the economic calculations for the plaintiff, being the judgment creditor at this stage and enforcement creditor to come if you issue the warrant?
MR NA:Certainly, your Honour.
BENCH:Look, I – I – I can make a determination on all of the material that’s provided to me.
MR NA:Right, your Honour.
BENCH:But I’m just highlighting fairly on behalf of the defendant and fairly on behalf of the plaintiff the best position available to the plaintiff is what has been put by the applicant in this matter. The respondent – I accept the case and what Chief Justice Carmody as he then was stated in relation to this matter, but I think proportion of interest is going to be cut at a higher rate than what’s outlined in the matter that his Honour dealt with.
MR NA:Certainly, your Honour. While I concede with your advice, I’m afraid that my client’s instructions and my supervisor’s instructions is to ---
BENCH:No, look, I know you’re acting on instructions.
MR NA:Right.
BENCH:All I’m saying is has your client weighed up all of the facts and circumstances and the position?
MR NA:Yes, your Honour.
BENCH:As I said, it could change tomorrow. Not that we want a judgment debtor to die, but if he died and there’s joint tenancy, you’re in a real spot of bother.
MR NA:Certainly, your Honour. I will have another chat with the client as soon as I come back from this here ---
BENCH:Just – I don’t know whether you want to speak further, but I – I can make the order today and it would be in favour of granting an instalment order, on all of the principles that are enunciated in the higher courts.
MR NA:Right, your Honour.
BENCH:I think – I think it’s the best proposition as at today in relation to your client, and it seems on its face, if the word of the judgment debtor is taken at its highest, the best result for your client.
MR NA:Right.”
The first defendant also submits that the solicitor for the appellants, during that exchange, conceded that the granting of the order was the best outcome available for the appellants.
Finally, the first defendant submits that even if reasons were required but could not be gleaned from the transcript and are therefore found to be inadequate, this is nevertheless not a case in which it can be inferred from an absence of reasons that the court did not have regard to the pre-requisite considerations pursuant to UCPR r 869.
Consideration
The High Court has recently confirmed again that “the duty to give reasons is an inherent aspect of the exercise of judicial power”.[6] The Court described it as a “judicial duty”.[7]
[6] Minister for Immigration, Citizenship,Migrant Services and Multicultural Affairs v AAM17 (2021) 388 ALR 257; [2021] HCA 6 at [22].
[7] Ibid at [25].
The relevant obligations for a judicial officer to give reasons was considered by the New South Wales Court of Appeal in Alchin v Daley[8]:
“(i) The giving of adequate reasons lies at the heart of the judicial process, since a failure to provide sufficient reasons can lead to a real sense of grievance because the losing party cannot understand why he or she lost.
(ii)While lengthy and elaborate reasons are not required, at a minimum the trial judge’s reasons should be adequate for the exercise of a facility of appeal, where that facility is available.
(iii)The extent and content of the reasons will depend on the particular case and the issues under consideration, but it is essential to expose the reasoning on a point critical to the contest between the parties. This may require the judge to refer to evidence which is critical to the proper determination of the issue in dispute.
…”
[8] [2009] NSWCA 418 at [35], citing Pollard v RRR Corporation [2009] NSWCA 110.
The Queensland Court of Appeal considered the requirement to give adequate reasons:
(a)In Sunland Group Ltd v Townsville City Council[9] where the Court held:
“It was thus incumbent on the primary judge to provide adequate reasons for his conclusions as to the existence and extent of conflict. Failure to give such reasons would be an error of law.”
(b)In Jakeman Constructions Pty Ltd v Boshoff[10] where it held:
“A failure to give sufficient reasons for an order where reasons are required amounts to an error of law. So much is established by many authorities, including Drew v Makita (Australia) Pty Ltd and AL Powell Holdings Pty Ltd v Dick.”
[9] [2012] QCA 30 at [36]; the court then expanded on what adequate reasons are, by reference to Drew v Makita(Australia)Pty Ltd [2009] 2 Qd R 219.
[10] [2014] QCA 354 at [12] and the authorities cited therein.
I reject the first respondent’s submission that the acting Magistrate’s reasons can be gleaned from remarks he made during the course of argument at the hearing. His Honour’s comments do not allow me to infer that he considered each of the pre‑requisite requirements listed in UCPR r 869(1)(a)-(f), nor, how he assessed, if in fact he did, each of those matters – particularly, the matter listed in r 869(1)(c) and (f).
Furthermore, upon reading the transcript of that proceeding, I am left in the position of not knowing how the acting Magistrate balanced competing considerations, or, whether in fact he conducted such an exercise.
The first respondent has submitted that the fact that the appellants did not ask for reasons is a relevant consideration. That submission however, fails to recognise that it is incumbent on a judicial officer to provide adequate reasons for the conclusion reached.
The first respondent also submitted that the appellants’ solicitor conceded during the exchange that I referred to earlier with the acting Magistrate, that the granting of the instalment order was “the best position available to the appellants”.
I do not accept that that passage demonstrates that the appellants’ solicitor conceded that the making of the instalment order was the better result for his client. It demonstrated only that the appellants’ solicitor was an inexperienced advocate who was exercising a courteous approach, whilst nevertheless maintaining the position his instructions required.
Furthermore, the first respondent’s submission on this point fails to take into account the detailed written submissions that were provided to the acting Magistrate by the appellants.
Ultimately, I am of the view that the acting Magistrate failed to give adequate reasons and that such failure amounts to an error of law that requires the decision to be set aside, unless this court independently concludes that it was the appropriate order in the circumstances.
Application for instalment order
I note that in relation to this decision, the acting Magistrate was in a no more advantageous position than this Court, as the issue was decided on submissions (both written and oral) and affidavit material.
The parties have agreed that, if the instalment order is allowed to continue, the final payment will be made on 4 May 2026.
Submissions
The appellants have submitted that the instalment order should be set aside for the following reasons:
(a)the timing and amount of instalments are wholly unreasonable as it will take until 4 May 2026 to pay off the judgment debt and interest;
(b)enforcing the warrant of execution on the real property can pay the judgment debt more efficiently and expeditiously as opposed to paying the judgment debt and its interest by instalments; and
(c)enforcing the warrant of execution is consistent with the public interest in allowing the judgment creditor the fruits of victory.
Originally, the appellants also submitted to the Magistrates Court that on the face of the first respondent’s statement of financial position (SOFP), the first respondent appears to be financially incapable of paying the debt in accordance with his proposal. Given that no complaint of non-payment has been made by the appellants, this submission now carries less weight and I infer that the first respondent has met his repayment obligations to the present time.
The first respondent has submitted that, at the time the matter was in the Magistrates Court, his net equity position, if he sold his assets and paid out his debts, excluding the judgment debt, was in the amount of $23,378.[11] He submits therefore that if an instalment order was not made he would be forced to declare bankruptcy and that the appellants would then be financially disadvantaged.
[11] Affidavit of Andrew John Byrne filed in the Magistrates Court on 27 January 2021.
He further submits that the key issue is whether the judgment debt will be satisfied within a reasonable time, and argues that payment in full by 4 May 2026 is a reasonable time.
Consideration
UCPR r 869 provides:
“869 Prerequisites for instalment order
(1)In deciding whether to make an instalment order, the court must have regard to the following—
(a) whether the enforcement debtor is employed;
(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;
(e) other liabilities of the enforcement debtor;
(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.
(3)However, an enforcement hearing is not necessary before the court makes the instalment order.”
I note that although the first respondent is employed, it is impossible to discern his means of satisfying the order given the contents of his SOFP.[12] Yet, as I have noted, I infer that he has met his obligations pursuant to the order made by the acting Magistrate. His SOFP details his necessary living expenses for himself and his dependants[13] as well as his income. It suggests that his regular weekly expenses exceed his weekly net income by the amount of $477.
[12] According to this document, his regular weekly expenses total $1,477, yet his weekly net income is $1,000.
[13] His dependants include children aged 19, 17, 15 and 5 (see affidavit of Andrew John Byrne filed in the Magistrates Court on 27 January 2021, paragraph 11). His SOFP also included his wife as a dependant in the amount of $800 per week (which included the children), yet simultaneously stated that he was also financially dependent on her for the same amount.
Notwithstanding this mystery, the first respondent does not suggest that the order made by the acting Magistrate imposed an unreasonable hardship on himself.
Turning to UCPR r 869(1)(c), I note that in Hellier Capital Pty Ltd v Richard Albarran,[14] the court determined that the exercise of the court’s discretion in any particular case requires close attention to the facts of the case. In that case, an instalment order which provided for the repayment of the judgment debt in a little less than four years was granted.
[14] [2009] NSWSC 403 at [3].
The appellants rely upon Dart & Anor v Singer & Ors[15] which is submitted to be analogous to this matter. Relevantly, in that matter:
(a)the net weekly income of the judgment debtor was $1,036; and
(b)the judgment debtor proposed to pay the debt of $27,385 at the rate of $125 per week over five years.
[15] [2014] QSC 316.
In that matter, Carmody CJ (as he then was) when dismissing the application said:
“… the amount proposed would not enable some meaningful reduction to be made in the amount of the judgment debt, and the fact that judgment debts carry interest, an instalment order which ‘chipped away’ at only part of the interest obligation and did not reduce the principal would be ‘inefficacious’.”
The material facts of this matter are not significantly distinguishable from Dart, other than the fact that the first respondent has been making weekly repayments since the order was made. However, I note that in Dart, the court did not conclude that the judgment debtor would not have been financially able to make the proposed payments. Hence, that distinction is of little moment.
The first respondent bears the onus of satisfying me that the mandatory statutory criteria and the discretionary considerations favour the making of an instalment order.[16] Unfortunately for him, I am not so satisfied. The proposal to pay over a total period of just under five years three months is not reasonable, in that it is contrary to the public interest which exists “in enabling parties who have litigated their disputes to enforce the victory that they have achieved.”[17]
[16] Dart v Singer at p 4.
[17] Hellier Capital Pty Ltd v Richard Albarran [2009] NSWSC 403 at [19].
As was said in Hellier Capital Pty Ltd v Richard Albarran:
“The public interest arises, at least in part, because the system of adjudication through courts depends firstly on acceptance of the outcome (if necessary, after exhausting all avenues of appeal) and, secondly, the ability to enforce the outcome. If the process of adjudication is to survive, so that people do not resort to self-help, the courts should be slow to interfere in the normal process of enforcement.”[18]
[18] Ibid.
Therefore, taking all these matters into account, despite the first respondent’s financial obligations, I am not persuaded that the judgment debt would be paid within a reasonable time pursuant to the current instalment order.
Furthermore, I am of the view that another enforcement means is available ie: the sale of his real property, which would be consistent with the public interest in enforcing money orders efficiently and expeditiously. Of course, there is the chance of bankruptcy being declared, but, on the information before this court, that is a matter of mere speculation.
Application to set aside the Magistrate’s order of 30 April 2021
Both parties agree that if the outcome of this appeal results in the instalment order being set aside, then it is appropriate to order that the Magistrate’s order of 30 April 2021 also be set aside.
I therefore do not need to consider that matter any further or go into the detail of its history.
Orders
1. Appeal allowed.
2. The acting Magistrate’s order of 12 February 2021 is set aside.
3. The application for an instalment order is dismissed.
4. The Magistrate’s order of 30 April 2021 is set aside.
5. Unless there are submissions to the contrary, the first respondent pay the appellants’ costs of this appeal on the standard basis.