Meadows v Moyle[2010] QDC 202

DISTRICT COURT OF QUEENSLAND

HIS HONOUR: The applicant is the second defendant in proceeding BD1553 of 1995.  She seeks an order that the order granting leave to commence enforcement proceedings made on the 23rd November 2009 be set aside.  She seeks ancillary orders consequent upon that, including an order that an enforcement warrant issued on the 13th January 2010 be set aside.  There is some urgency for the application.  It's 4.18 in the afternoon and a property is to be auctioned tomorrow.

The application to set aside the order granting leave to commence enforcement proceedings is brought pursuant to Uniform Civil Procedure Rule 667(1).  A basis upon which the Court may set aside such an order is if the order was made in the absence of a party and it is on that basis that the applicant applies.

The applicant/second defendant does make this application on the basis that there were material non-disclosures when the matter was heard before his Honour Judge Rafter on the 23rd November 2009.  Ms Garner, the applicant/second defendant, is a judgment debtor as a result of a judgment entered against the first defendant and against her as second defendant in the amount of $107,306.30.  Judgment was entered on the 27th March 1998.  Ms Garner was the guarantor of a debt.

In 1999, that is the year after judgment was entered, it was suggested by solicitors for Ms Garner on her behalf that there was little point in pursuing her to seek to satisfy that debt.  The plaintiff, Ms Meadows, having been persuaded that there was little reason in 1999, or little benefit, to pursue Ms Garner did not then pursue her.  It seems that in the year 2009 Ms Meadows learned that Ms Garner may have had assets.

On the 11th August 2009, Tucker & Cowen Solicitors for Ms Meadows demanded payment of the judgment sum and interest which they asserted was $229,194.27.  After some discussions with Mr Hensler of Tucker & Cowen, Ms Garner referred the matter to her then solicitor and left the matter with her solicitor in 2009.

The next that Ms Garner knew of the matter was on the 12th April 2010 when she was served with an enforcement warrant.  It seems that after the 11th August 2009 Ms Meadows applied for leave to commence enforcement proceedings by an application filed on the 30th October 2009.  The solicitors for Ms Meadows did not serve Ms Garner or solicitors known, or thought by them, to be acting for Ms Garner.  The application came before his Honour Judge Rafter SC on the 23rd November 2009.  An application for leave is brought pursuant to rule 799.

It is the case that an enforcement creditor may start enforcement proceedings without leave at any time within 6 years after the day that a money order is made.  After that an enforcement creditor needs the Court's leave to stay enforcement proceedings.

By rule 799 sub-rule 3, the application for leave to start enforcement proceedings may be made without notice to any person unless the Court orders otherwise.  It is the case that Ms Meadows was entitled to bring an application for leave to start enforcement proceedings returnable before his Honour Judge Rafter on an ex parte basis.  She was not obliged to give notice to Ms Garner.

On an application for such leave, she was obliged to satisfy the Court of certain things.  Rule 799 (4)(b) required her to satisfy the Court as to the reasons for her delay.  Aside from explaining to the Court her initial fear that Ms Garner would be incapable of satisfying a judgment, Ms Meadows explained that over the years she attempted to ascertain the whereabouts of Ms Garner but that she was unable to until the year 2009.

I do not sit on appeal from the judgment of my brother Judge.  The application before me is brought on the basis that I am to be persuaded that there were material non-disclosures to his Honour Judge Rafter and that if I am so satisfied I should exercise my discretion to set aside the ex parte order.

The consequence of that is that the applicant, Ms Meadows, would be obliged to apply again for her leave and the matter might be resisted by Ms Garner.  An applicant on an ex parte application has a duty to provide full disclosure to the Court.  I was referred to AMAC Warehousing and Transport Pty Ltd v. Fairfax Media Publications Pty Ltd [2009] NSW SC 970 and to the summary of the position by Slattery J in that case.

If I may be forgiven, I paraphrase the effect of paragraphs 15 and 16 from that case, at least those parts which are particularly relevant to the matter before me.  A party, on an ex parte application, has a duty of the utmost good faith to make disclosure to the Court all facts material to the determination of the matter before the Court and it is no excuse for the party to say that he was not aware of the importance of the facts.  The non-disclosure must be material in the sense that it is likely to influence the Court in acceding to the application.

The matters raised by way of non-disclosure are of two kinds.  One is said to have been a non-disclosure by the solicitor for Ms Meadows and the other is said to have been non-disclosure by Ms Meadows herself.  It was submitted that the solicitor for Ms Meadows should have disclosed that he had not served the application.  It was submitted that it was a material non-disclosure to have advised his Honour that he hadn't given notice of the application, he had just foreshadowed it and to have said that basically the solicitors for the second defendant, Ms Garner, deny liability and the “attitude's just simply perverse”.

The solicitor for Ms Garner did disclose that he had not served the application.  In response to the question whether the solicitors for Ms Garner had given an indication of wanting to he heard on the application he said “no” and it is accepted by counsel for Ms Garner that nowhere in correspondence with Mr Hensler for Ms Garner did solicitors for Ms Garner indicate that they wanted to be heard on such an application.

Counsel for Ms Garner supported his submission of material non-disclosure by Mr Hensler by reference to correspondence within the affidavit of Mr Hensler, document 28 in the file.  Two examples appear among the exhibits at page 8 and 13 where Mr Hensler wrote on the 18th August 2000 to Ms Garner and then subsequently on the 2nd September 2009 to former solicitors of Ms Garner to the effect that their client, Ms Meadows, will take such further action to enforce the judgment as may be advised.

It was submitted that such language was at least sufficient to be ambiguous and to suggest to a reader that the reader would be advised if further action to enforce judgment was to be taken up.  I don't accept that solicitors would have understood such a letter that way.

I do not accept that Mr Hensler's responses to his Honour can be said to have been a material non-disclosure.  Mr Hensler did make his Honour perfectly clear that the application had not been served;  he had not given notice to solicitors that the application was being brought;  that he had simply foreshadowed the bringing of an application.  The foreshadowing of such an application was no more than his writing letters of the kind to which I have referred that his client would take such further action to enforce judgment as may be advised.

With respect to material non-disclosure by Ms Meadows, it seems that Ms Garner has been a director of Atlantic Real Estate Pty Ltd ACN 010 420 970 since 21 July 1992 and that that company has carried on business trading in real estate continuously for 25 years from 1985 until now and that a search of the ASIC register of Atlantic Real Estate would, at any time, have revealed Ms Garner's personal address and that Ms Meadows worked in the business of Atlantic Real Estate Pty Ltd trading as Atlantic Real Estate for a period of 3 years at a time prior to the judgment.

It also appears that Ms Garner's address on all documents relevant to Court proceedings, that is the proceeding 1553 of 1995 in which judgment was obtained, appeared as 30 Heathwhite Street, Tarragindi and that if any correspondence had been sent to that address at any time in the 6 years following judgment it would have come to the attention of Ms Garner.  It appears that no correspondence was sent to that address.

It is submitted that the evidence of Ms Meadows to the effect that over the years she attempted to ascertain the whereabouts of Ms Garner was oblique and fell short of discharging the duty of utmost good faith.  I have had a submission from Mr Hensler that I should accept that Ms Meadows' evidence was, in fact, honest and on the material before me, I have no reason to reject that submission and proceed on the basis that Ms Meadows' evidence was honest where she deposes that she did not know of the whereabouts of Ms Garner and over the years she attempted to ascertain those whereabouts.

Accepting that does not lead me to conclude that she made any particular efforts to ascertain the whereabouts of Ms Garner, let alone reasonable efforts to do so.  The issue for me is not to determine whether Ms Meadows made reasonable efforts.  It is to determine whether there was a breach of her duty as a party seeking an ex parte order of the utmost good faith to make disclosure to the Court.

It seems to me that the failure to draw to the attention of his Honour Judge Rafter, with any particularity, the efforts that had been made and the knowledge which Ms Meadows had, which amounted to very relevant clues as to how Ms Garner might be located, is a significant matter.

It does seem to me that there has been by Ms Meadows a failure through the slight evidence of her unexplained attempts to ascertain the whereabouts of Ms Garner a non-disclosure of the fact that she had not sought to search for Atlantic Real Estate Pty Ltd, that she had not sought to engage solicitors to look for Ms Garner, that she had not sought to make contact with Ms Garner by writing to the address at which she had resided at the time of the judgment and that she had not attempted to make contact with Ms Garner's solicitors between 1999 and the expiration of 6 years after the judgment was obtained.

While these matters may not have persuaded his Honour Judge Rafter to make any different order, it does appear to me that they are material matters, which were not disclosed. They may have affected the order that his Honour would have made.  Accordingly, I will make the orders sought that the order granting leave to commence enforcement proceedings made on 23 November 2009 be set aside.

Now, Mr Hensler, that order having gone against you, do you have any submissions about which of orders 2 or 3 is appropriate?  Order 2 was that the enforcement warrant issue be set aside.  Order 3 was that the enforcement warrant be stayed.

MR HENSLER:  Be stayed.  To be stayed.

HIS HONOUR:  Thankyou.  I order that the enforcement warrant issued on 13 January 2010 be stayed.  Are there any further orders?

MR JOHNSTONE:  I'd seek costs of the application, your Honour.

...

HIS HONOUR:  The general rule being that costs follow the event except in exceptional circumstances, I am not persuaded that the honesty of Ms Meadows as a litigant is an exceptional circumstance.  I regard it as quite common that honest litigants are unsuccessful litigants and that their lack of success does not anything to do with dishonesty and honest unsuccessful litigants are regularly awarded to pay costs.

I order that the plaintiff pay the second defendant's costs of and incidental to this application to be assessed on a standard basis.  Is there anything else you require?

MR JOHNSTONE:  No, your Honour.