Deputy Commissioner of Taxation v Lewis
[2024] QDC 192
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- Unreported Judgment
- Deputy Commissioner of Taxation v Lewis[2024] QDC 192
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Deputy Commissioner of Taxation v Lewis[2024] QDC 192
Deputy Commissioner of Taxation v Lewis[2024] QDC 192
DISTRICT COURT OF QUEENSLAND
CITATION: | Deputy Commissioner of Taxation v Lewis [2024] QDC 192 |
PARTIES: | Deputy Commissioner of Taxation (Plaintiff) v Kierin Anthony Lewis (Defendant) |
FILE NO: | 2258 of 2022 |
DIVISION: | Civil |
PROCEEDING: | Reference by the Registrar for directions. |
ORIGINATING COURT: | Brisbane District Court. |
DELIVERED ON: | 7 November 2024 |
DELIVERED AT: | Bundaberg |
HEARING DATE: | Heard on the papers. |
JUDGE: | Byrne KC DCJ |
DIRECTIONS: | I direct the Registrar that, in the circumstances of this matter:
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – JUDGMENTS AND ORDERS – EXECUTION AGAINST PROPERTY – WARRANTS OF SEIZURE AND SALE – where a default judgment was entered in favour of the plaintiff – where an enforcement warrant was issued and the property the subject of the warrant was sold – where the plaintiff received payment comprising the judgment debt, interest accrued to the date of settlement and costs of preparing the enforcement warrant – where the plaintiff objects to interest being paid only up to the date of settlement and to the balance of the sale proceeds being paid to the defendant prior to the assessment of all enforcement costs – where the Registrar refers these issues to the Court for directions pursuant to r. 982 of the UCPR. |
LEGISLATION: | Civil Proceedings Act 2011 (Qld) ss. 59, 85. Uniform Civil Procedure Rules 2005 (NSW) r. 39.28. Uniform Civil Procedure Rules 1999 (Qld) rr. 679, 793, 797, 798, 817, 820, 821, 836, 983. Uniform Civil Procedure (Fees) Regulation 2019 (Qld) reg. 3. |
CASES: | Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd [2019] 2 Qd R 336. |
SOLICITORS: | K & L Gates for the plaintiff. No submissions for the defendant. |
Introduction
- [1]On 15 September 2022 the plaintiff commenced proceedings in this Court for a debt due. On 23 November 2022, a default judgment was granted by the Registrar in the sum of $256,725.30, including $1,999.20 in costs and $3,586.87 in interest. An enforcement warrant was issued on 10 May 2023, which was to expire on 9 May 2024. Pursuant to r. 821 of the Uniform Civil Procedure Rules 1999, the warrant was later extended to 22 April 2025.
- [2]On 16 July 2024, the property the subject of the warrant was sold at auction, with settlement occurring on 16 September 2024. The Registrar received the sale proceeds for distribution, as is required by r. 836(1) of the UCPR.
- [3]On 23 October 2024, the plaintiff, as the enforcement creditor, received payment from the Court comprising the judgment debt, interest accrued to the date of settlement and the costs of preparing the enforcement warrant, consistent with r. 820(2) of the UCPR. All other enforcement costs, including those incurred since the issue of the enforcement warrant (“other enforcement costs”), were not accounted for in that payment.
- [4]The balance of the sale proceeds were retained by the Registrar pending calculation of the “poundage” under reg. 3 of the Uniform Civil Procedure (Fees) Regulation 2019, which will also be deducted from the balance of the sale proceeds.
- [5]In the course of correspondence, the plaintiff objected to the manner of calculation of the interest by the Registrar and to the prospect of the defendant being paid the balance of the sale proceeds prior to the assessment of the other enforcement costs. The Registrar has referred those issues to the Court for directions pursuant to r. 982 of the UCPR. Another Judge of this Court directed that the matter be heard on the papers, and the parties were given the opportunity to provide written submissions. The plaintiff has filed submissions and a supporting affidavit.[1] The defendant has not filed any material. It is envisaged that the balance of the sale proceeds will not be made available to the defendant until the directions are given.
The plaintiff’s submissions
- [6]Ultimately, the plaintiff contends that the following amounts should also be deducted from the balance of the sale proceeds before those funds are paid to the defendant:
- Post-judgment interest from the date of settlement of the property to 22 October 2024 (i.e. the date the plaintiff received the sale proceeds);
- Post-judgment interest from 23 October 2024 to the date of further payment of any proceeds from the proceedings to the plaintiff; and
- The total amount of all enforcement costs as assessed, to the date of assessment.
- [7]The plaintiff’s submissions can be distilled into the following propositions, in support of those outcomes.
Post-judgment interest.
- [8]The default judgment constitutes a “money order” for the purposes of the Civil Proceedings Act 2011 (“CPA”). Therefore, interest accrues on the money order from the date it was granted, by force of s. 59 of that Act.
- [9]That provision does not expressly provide when the interest stops accruing, but the Court of Appeal in Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd[2] held that interest must accrue until there is no further money to be paid under the money order debt. On the same authority, the money order was considered to be unpaid until the funds were received by the plaintiff. It is argued that as the payment made on 23 October 2024 included interest to the date of settlement and not the date of payment, the full amount of the money order debt has not been paid, and therefore interest continues to accrue.
The other enforcement costs.
- [10]Pursuant to rr. 679, 793 and 797(1) of the UCPR, the applicant’s costs of enforcing the money order are recoverable as part of the money order. They are part of the money order debt. Rule 836 regulates the distribution of the money received by the Registrar from the sale of the property and, because the other enforcement costs are part of the money order debt, they form part of the amount recoverable under the warrant.
- [11]The balance of the sale proceeds appears to be sufficient to satisfy the plaintiff’s other enforcement costs. While r. 798 allows for an enforcement creditor to commence separate proceedings to enforce the costs, it does not mandate it. If the plaintiff is in effect required to commence separate proceedings to enforce the other enforcement costs, it will likely result in another of the defendant’s real properties being sold to satisfy this aspect of the debt, which in turn will generate more costs that would need to be pursued. It is said that it is in the interests of both the plaintiff and defendant to have the debt satisfied out of the balance of the sale proceeds.
- [12]The consequence, it is submitted, is that the balance of the sale proceeds should not be distributed to the defendant until the other enforcement costs have been assessed.
Consideration of the issues
Post-judgment interest.
- [13]The decision in Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd does not assist the plaintiff’s submissions. There, the judgment debt was paid to the respondent’s solicitors subject to conditions, consistent with the respondent’s undertaking, to the effect that the respondent would not access the funds unless it succeeded on the appeal, and further that all funds would be refunded if the appellant succeeded on the appeal. In other words, the funds were expressly held subject to conditions and were not available for use by the respondent.
- [14]It was in those circumstances that the Court of Appeal emphasised that it was the conditional nature of the payment of the funds which meant that the payment had not satisfied the money order.[3]
- [15]In the present matter the proceeds of the sale were paid to the Registrar unconditionally. While it is true that the funds were not received by the plaintiff for roughly another month, the proper analysis of the cited decision shows that this is not determinative of the question. The emphasis is on the basis by which it was paid.
- [16]On that basis, the Registrar was correct to include a component for post-judgment interest only up to the date of settlement, which was the date the money was paid on account of the defendant.
- [17]The interest accruing on the other enforcement costs, as considered below, will be recoverable as part of the separate proceedings, if any, to enforce those costs.
The other enforcement costs.
- [18]The plaintiff has correctly identified that, by the combined operation of rr. 679, 793 and 797 of the UCPR, the plaintiff is entitled to recover the other enforcement costs as part of the money order. However, in my view, he is mistaken in thinking that means that they are necessarily recoverable under an enforcement warrant for a money order.
- [19]Pursuant to r. 817(1)(b)(iv) and (vi) of the UCPR, the enforcement creditor must attest to the costs incurred in previous enforcement proceedings in relation to the order debt and the details necessary to calculate the amount payable under the order at the date the statement is sworn. Those costs are calculated up to the date of the sworn affidavit, and, in this case, do not include the other enforcement costs. (For completeness, it is noted that r. 817(1)(vii) requires a calculation of the daily interest that will accrue in the future. I will return to this shortly.)
- [20]Rule 820(1)(c) requires that the warrant must state “the amount recoverable under the warrant” which, by r. 820(2), must include the costs of any previous enforcement proceeding of the same money order, the costs of the enforcement warrant and the amount of interest on the order debt. These compulsorily included amounts are drawn from the affidavit mandated by r. 817. They do not include the other enforcement costs. It is the amount recoverable which is authorised to be collected upon the execution of the warrant, not the total amount of the money order. The use of different terminology is telling.
- [21]Rule 836(2)(b) authorises the Registrar only to pay to the enforcement creditor “the amount recoverable under the warrant”. As part of that amount, the Registrar is authorised to pay interest on the money order debt to the date of settlement, some of which accrues since the granting of the enforcement warrant. That is not expressly permitted by r. 836, but is the necessary consequence of giving effect to s. 85 of the Civil Proceedings Act 2011. That is the obvious explanation why r. 817(1)(vii) requires the calculation of the daily rate of interest after the date of the affidavit sworn to obtain the enforcement warrant. Notably, it is only future interest which is drawn into the calculation of the “amount recoverable under the warrant” and not the other enforcement costs.
- [22]It follows that the Registrar is not authorised to pay the enforcement creditor the other enforcement costs from the proceeds of the sale.
- [23]The plaintiff’s rights of recovery of those costs are protected by r. 798. It may be inconvenient to approach the matter in that way from the plaintiff’s perspective, and it may be that it could be approached differently interstate.[4] Nonetheless, the plaintiff should be taken to have been cognisant of the procedure in this State when electing to apply for an enforcement warrant.
Directions
- [24]In the circumstances of this matter:
- The Registrar was correct to limit the calculation of post-judgment interest to the date of settlement of the sale of the real property under the enforcement warrant and not to the date of the full payment of the money order; and
- The Registrar is not authorised to pay the judgment creditor from the proceeds of the sale of the real property any costs incurred by that creditor other than those referred to on the face of the enforcement warrant.
Footnotes
[1]The plaintiff also made submissions about the correct calculation of the poundage, but that issue has not been referred to me.
[2][2019] 2 Qd R 336.
[3]Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd at [25]-[27], [32], [36].
[4]See for example r. 39.28 of the Uniform Civil Procedure Rules 2005 (NSW).