Eschenko v Shillcock [2003] QDC 237

1 [2003] QDC 237 DISTRICT COURT CIVIL JURISDICTION JUDGE DODDS No 744 of 2002 RUSLAN LEONIDOVICH ESHCHENKO Applicant and RICHARD JOHN SHILLCOCK Respondent SOUTHPORT ..DATE 25/07/2003 JUDGMENT WARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal offence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for their protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those categories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings. -- 1 of 9 -- 25072003 T13/KW M/T 1/2003 (Dodds DCJ) JUDGMENT 2 1 10 20 30 40 50 60 HIS HONOUR: There were two applications before me. One by the plaintiff to set aside an enforcement warrant authorising payment of a money order by instalments, the other by the defendant to remove a mareva injunction. On 20 January 2003 in the District Court at Southport a judgment was entered for the plaintiff against the defendant for $248,956.62 including $6,536.97 interest to the 20th January 2003 and $1,419.65 for costs. It was further ordered that enforcement of the judgment be stayed to the extent of $56,000 until trial of the defendant's counter-claim or earlier order. The judgment was pursuant to a consent order made on 29th November 2002. On 29th November 2002, the plaintiff, judgement creditor made a demand of the defendant, judgement debtor for payment of the amount, immediately payable pursuant to the judgment within seven days. On 5th December 2002, the defendant proposed payment over one year. This was rejected in writing by the plaintiff on the 29th January 2003. Further correspondence ensured wherein the plaintiff rejected the defendant's proposals of payment. On 18th March 2003 a bankruptcy notice was served on the defendant. Meanwhile, on 3rd March 2003 the defendant made an application to the Court for an order that he pay the money order by instalments. Such an application is provided for in chapter 19 part 7 of the Uniform Civil Procedure Rules (UCPR). -- 2 of 9 -- 25072003 T13/KW M/T 1/2003 (Dodds DCJ) JUDGMENT 3 1 10 20 30 40 50 60 The application was supported by a declaration by the defendant regarding his financial position. Form 71. The application was apparently successful. The registrar made an order for an enforcement warrant by instalments. $5,000 per month was to be paid commencing 1 March 2003, with the additional amount for costs and interest to be paid by 31 March 2006. The warrant meant that the last payment excluding costs and interest was to be on 1st March 2006. I was told that there had been an earlier informal approach to the Registrar monthly payments to be of a greater amount. The application to the Registrar, which was successful occurred without any notice to the judgment creditor. On 20th March 2003 solicitors for the defendant served on solicitors for the plaintiff the sealed enforcement warrant for payment by instalments. On 28th March 2003 in response to the plaintiff's solicitor's queries, the defendant's solicitors provided a copy of the form 71 referred to above. At the same time two payments of $5,000 were received from the defendant (presumably payments 1 and 2 according to the enforcement warrant for payment by -- 3 of 9 -- 25072003 T13/KW M/T 1/2003 (Dodds DCJ) JUDGMENT 4 1 10 20 30 40 50 60 instalments). Since, further payments of $5,000 have been made. Investigations were made by the plaintiff's solicitors. On 27th May 2003 the plaintiff applied for and obtained an order ex parte for an injunction (the mareva injunction) restraining the defendant from "disposing of or dealing in any way with his property or other assets (including removing such property or assets from Australia) whether in his own name or not and whether solely or jointly owned or not (except to the extent that the value of the defendant's unencumbered interest in his property or other assets does not fall below the amount of $191,436.88 -----)". There were further terms to the order which it is not necessary to set out here. The defendant's position, if I set aside the enforcement warrant by instalments is to seek an order for an enforcement by instalments in similar terms. The plaintiff's application to set aside the enforcement warrant was put on two basis. Firstly, it was submitted - it was obtained without notice to the plaintiff. Secondly, it was submitted - it was issued in reliance upon a form 71 supplied by the defendant, which has been shown to be false. -- 4 of 9 -- 25072003 T13/KW M/T 1/2003 (Dodds DCJ) JUDGMENT 5 1 10 20 30 40 50 60 The defendant's application to remove the mareva injunction did not rely upon any additional material other than a new form 71, which shows the earlier form 71 did not disclose the defendant's interest in five companies. It appears, however that this form 71 also fails to reveal a liability of the defendant, since discovered by the plaintiff's solicitors, namely pursuant to a mortgage supporting the borrowing by the defendant and another of $460,000 for five years which mortgage is still on the title of the property charged. -- 5 of 9 -- 25072003 D.1 T14/KB M/T 1/2003 (Dodds DCJ) 6 JUDGMENT 1 10 20 30 40 50 60 A judgement creditor is entitled to the benefit of the judgement. If the amount is not immediately forthcoming, the creditor may adopt lawful means to obtain the benefit of the judgement. One such means is to obtain an enforcement warrant. It is a warrant issued by a Registrar under Chapter 19 UCPR to enforce a money order. If a judgement debtor pays the judgement amount, then there is no need to enforce the order by warrant or otherwise. Chapter 19 UCPR contains a variety of provisions relating to enforcement warrants including part 7 of Chapter 19 providing for enforcement warrants for payment of a money order by instalments. Rule 868(2) provides that the Court may, on application of a party, issue an enforcement warrant authorising satisfaction of an order debt by instalment payments either when making a money order, or at any time after the order issues. Rule 869(1) sets out matters the Court must have regard to in deciding whether to issue an enforcement warrant authorising payment by instalments. One of the provisions directs attention to whether the debt, including any interest, will be satisfied within a reasonable time. Another applies if the applicant is the enforcement debtor and directs attention to whether the issue of the warrant sought would be consistent with the public interest in enforcing orders efficiently and expeditiously having regard to the availability of other enforcement means. -- 6 of 9 -- 25072003 D.1 T14/KB M/T 1/2003 (Dodds DCJ) 7 JUDGMENT 1 10 20 30 40 50 60 Rule 869(2) provides that in deciding the amount and timing of the instalments, the Court must be satisfied the warrant will not impose unreasonable hardship on the enforcement debtor. Rule 871 provides that the Court may, on application of an enforcement creditor, or enforcement debtor, set aside, suspend or vary an enforcement warrant. Any such order must be served upon the other party. Rule 870 prevents any other enforcement warrant issuing in relation to a money order, while an enforcement warrant authorising payment by instalments is enforced unless the Court otherwise orders. It is true as the defendant submits that there is no provision in part 7 requiring service of an application for enforcement warrant for payment of a money order by instalments, and that provision is made for an application to be made by an enforcement debtor. In my opinion an application by an enforcement debtor for such a warrant must be made on notice to the enforcement creditor. It must be served. An application for an enforcement warrant is an application to start a proceeding. See the meaning of proceeding in schedule 2 to the Supreme Court Act 1991, and is an originating process for the proceeding, when issued by the Court, see Rule 8 UCPR. -- 7 of 9 -- 25072003 D.1 T14/KB M/T 1/2003 (Dodds DCJ) 8 JUDGMENT 1 10 20 30 40 50 60 Rule 27 UCPR provides it must be served on each respondent unless the rules, an Act or another law permits the application to be heard and decided without being served. In the case of an application by an enforcement creditor, the rules provide it may be made without notice to another party, see Rule 817(2). In this case, with respect to an application for such an enforcement warrant, the enforcement creditor is the respondent, see Rule 26(2) UCPR. With the exception of an enforcement warrant authorising payment by instalments by an enforcement debtor, has no interest in obtaining an enforcement warrant. Plainly an enforcement creditor has an interest in obtaining an enforcement warrant. And one authorising payment of a money order by instalments is plainly one the enforcement creditor should have the opportunity to address. As I have already indicated, in this case, after the warrant was issued ex parte, investigations by the enforcement creditor revealed that the enforcement debtor had not disclosed assets. I set aside the enforcement warrant authorising payment by instalments issued 3 March 2003. -- 8 of 9 -- 25072003 D.1 T14/KB M/T 1/2003 (Dodds DCJ) 9 JUDGMENT 1 10 20 30 40 50 60 I refuse the present application to order another enforcement warrant authorising payment by instalments. The material before me shows that the second Form 71 fails to disclose a significant liability, namely the mortgage referred to above. Additionally, it is impossible to see from the information provided in either Form 71, how payments of $5,000 a month can be made by the enforcement debtor. Those payments made to date have been by cheque drawn by a proprietary company, Sealcrest Pty Ltd, of which it appears, from the second Form 71, the enforcement debtor is a shareholder. Regarding the Mareva injunction, no material other than the second Form 71 has been put before me. The Judge who made the order plainly considered on material then before him it should be made. The injunction will continue until further order. The parties have liberty to apply on three days' notice. I order the respondent pay the applicant's costs of and incidental to the application to set aside the warrant. That deals with all matters, gentlemen. ----- -- 9 of 9 --