Campbell v Nesbit[1998] QDC 101

CHAMBERS

JUDGE DODDS

Between

and

MAROOCHYDORE

DATE 4\6\98

ORDER/REASONS

This is an application for summary judgment by the plaintiff pursuant to Rule 153 of the District Court Rules. Pursuant to the Rule, in any action in which the plaintiff seeks to recover a debt or liquidated demand in money payable by a defendant, a judge may make an order authorising the plaintiff to sign judgment for the relief claimed and costs unless the defendant “by affidavit or otherwise satisfies the judge that the defendant has a good defence to the action on the merits or discloses such facts as are sufficient to entitle the defendant to defend.”

In Barry -V Australia and New Zealand Banking Group Limited and Another (1992) 2 QR 12 it was held that before a judge may grant leave to sign judgment pursuant to the Rule he or she must be fully persuaded there was no real question to be tried, that there were no facts shown such as would lead to the inference that at the trial of the action the defendant might be able to establish a defence to the plaintiffs claim. “All the defendant has to do is establish a state of facts that displaces the prima facie effect of the mere belief of the deponent..... that there is no defence in fact or law. Unless that statement .....as to belief remains unimpaired.....and if the matter is left in doubt it is impaired the plaintiff has no right to the summary judgment....”; Cloverdell Lumber Co Pty Ltd -V- Abbott (1924) 34 CLR 122 at 133 per Isaacs J.

From about February 1996 the plaintiff, a solicitor, had acted for the defendant in Family Court and other matters arising out of the breakdown of his family relationship. Some payments were made on account of work done but according to the plaintiff a considerable sum remained outstanding. The plaintiff and defendant entered into a written agreement on the 12th of August 1996 which evidenced that the plaintiff advanced monies to the defendant “for the purpose of facilitation of costs in the Family Court, Magistrates Court and generally which (the plaintiff) is willing to do upon the execution of the agreement by the (the defendant).” It evidenced that the plaintiff would lend to the defendant the sum of $40000 to be used for the purpose of defraying legal costs. It contained provisions for the repayment of the money. In January 1997 the plaintiff issued proceedings in the Magistrates Court against the defendant for $40000 which was then the monetary limit of the Magistrates Court jurisdiction and obtained judgment by default on the 24th of January 1997. She issued a bankruptcy notice dated the 8th of April 1997 and intended to proceed with a creditors petition. There followed some negotiations between the plaintiff and another firm of solicitors then acting for the defendant and it is the plaintiffs case a compromise agreement resulted whereby the defendant would pay moneys owing by installments. Some payments were made according to the agreement but then ceased and the plaintiff issued a creditors petition on the 3rd July 1997. In the meantime the defendant had changed solicitors again and his new solicitors successfully applied to have the default judgment set aside. A costs order was made against the defendant. That removed any basis for the creditors petition and the application was dismissed with a costs order in favour of the plaintiff. His new solicitors also brought an application in the Family Court to set aside the agreement referred to above. On 12th December 1997 Justice Bell of the Family Court dismissed that application with a cost order in favour of the plaintiff. An appeal against Justice Bells order has been heard by the Full Court of the Family Court and the decision is reserved. Following Justice Bells decision the plaintiff made a further application in the Magistrates Court for summary judgment with respect to monies still outstanding under the agreement, alleged to be $28 869.98. On the 23rd of January 1998 she obtained summary judgment on the claim in an amount of $1090.40 plus costs of $85.00. She has appealed against the stipendiary magistrates decision to the District Court.

The plaint in the present action sets out:

It claimed a total amount of $52 663.31 being:

The alleged compromise

By letter of 24th April 1997 the then solicitors for the defendant wrote to the plaintiff referring to discussions and noting the issue of the bankruptcy notice and an intention on the part of the plaintiff to proceed to present a creditors petition at the earliest possible time. The letter proposed that in exchange for the plaintiff agreeing to withdraw the bankruptcy notice the defendant would pay the amount of the judgment by the payment of $10 000 by Friday of the following week, a further payment of $10 000 within 60 days and a payment of a minimum of $500 per month until finalisation of the property settlement (apparently outstanding) when the full balance would be repaid in full. It also indicated the solicitors held instructions to make application to have the Magistrates Court judgment set aside.

The plaintiff responded by letter of the 28th April 1997 with a counteroffer, namely that she would not proceed with the creditors petition pending payment in full of her outstanding fees, costs and charges including interest by bank cheque to her trust account by $10 000 on or before 12.00pm 1st May 1997, $10 000 on or before 12.00pm 30th June 1997, $500 on or before 12.00pm on the last working day of each month commencing July 1997 and such further or other payments which could be made from time to time. The periodic payments were to continue together with interest and other outstanding monies until paid in full or alternatively finalisation of property distribution proceedings and other matters in the Family Court or District Court “which ever is dealing with same” and the defendants solicitors undertaking to ensure that payment of such monies was made and to keep the plaintiff informed of all proceedings in which the defendant was involved from time to time together with details of any orders and of hearing dates “such undertaking be received with copies of all relevant documentation on or before 12.00 noon 30th April 1997.” The letter included a calculation of the balance then outstanding to the plaintiff in total an amount of $42 420.97.

The plaintiff wrote again to the defendants solicitors by letter by letter of the 29th of April 1997 recording that the defendant had attended at her offices that morning and made a part payment of $3000 and advised that he would continue to make such part payments on the basis that she receive at least $10 000 on or before 1st May 1997 and a further $10 000 prior to 30th June 1997.

The defendants solicitors wrote to the plaintiff by letter of the 1st of May 1997 referring to her letters of the 28th and 29th of April 1997. The letter informed “We have instructions that our client will agree to the proposal put forward by you and we note that he has already paid the sum of $3000 by way of part payment of the first instalment of $10 000 due by 1st May 1997. We can provide our undertaking that we ensure that our client understands his obligations and also that we will keep you informed of proceedings and hearing dates but neither and I nor our firm could make any undertaking that the payment of monies is made to you as obviously this is an obligation of our client and not the firm. Other than that our client will agree to the proposal and hopefully the question of your costs will be resolved within a reasonable time.”

The plaintiff wrote to the defendants solicitors by letter of the 2nd of May 1997 referring to previous discussions “wherein you advised that the undertaking requested shall be provided as soon as possible. In this regard I also note that arrangements have been made for payment of the first sum of $10 000 and pending receipt of your undertaking as required I note the following repayment schedule.” That schedule recorded the amount referred to in her letter of 28 April 1997 as outstanding namely $42 420.97 less total payments received from the defendant of $10 000 by 1st of May 1997 leaving an outstanding balance of $32 420.97 and showing interest at 11.5% on the outstanding balance being $10.2148 per day. It seems reasonably clear that the undertaking referred to is that contained in the defendants solicitors letter to the plaintiff of the 1st of May 1997.

A person who has a money judgment which remains unsatisfied has a number of options to execute the judgment. It seems to me that what the plaintiff has done is agree to hold her hand on taking steps available to her because the default judgment remained unsatisfied. The step she had proposed to take was one available to her in an attempt to gain satisfaction on the judgment. It appears from the defendants then solicitors letter of the 24th April 1997 to the plaintiff that the defendant was aware of his right to seek that the default judgment be set aside. Nonetheless he agreed to pay monies by instalments to the plaintiff if she would forbear from proceeding with the step in execution she proposed.

By obtaining a stay of the process of execution of the judgment the defendant has not obtained a benefit under the judgment which may prevent him from later seeking to set it aside which is what he in fact later did; Evans -V- Bartlem 1937 AC 473. Nor has the plaintiff by agreeing to postpone the process of execution pending payment been mislead by the defendant to her disadvantage. So long as she has the judgment she may take steps to execute it. It was arguably to the advantage of the plaintiff to receive the amount of the judgment in full albeit by instalments rather than to see the judgment set aside or to bankrupt the defendant and join other creditors. It was however a judgment by default. “Unless and until the court has pronounced a judgment upon the merits or by consent it is to have the power to revoke the expression of its coercive power where that has only been obtained by a failure to follow any of the rules of procedure”; Evans -V- Bartlem per Lord Atkin page 480.

It seems apparent that orders the defendants pay costs have not been complied with. An amount of $864.96 appears to be outstanding from costs ordered to be paid by the defendants upon the dismissal of the plaintiff's creditors petition. An amount of $90 32.15 appears to be outstanding being costs upon dismissal of the defendants application before Justice Bell. There has been a judgment against the defendant in the Magistrate Court for $1090 and costs of $85.00 which also remains unsatisfied. I note the defendant paid $10 000 to the plaintiff following the compromise and a further $500 on 30th April 1998 in an attempt, (futile in my view), to claim an accord and satisfaction regarding outstanding moneys claimed by the plaintiff.

The judgment obtained in the Magistrates Court for $1090 may be enforced in any way provided in the rules. So may the costs orders according to the rules of court of the court wherein they were respectively made. In this proceeding I cannot see any basis upon which I should give leave to sign judgment in the District Court for these amounts which are already the subject of Court orders.

The summons is dismissed.