New South Wales Court of Appeal CITATION : May v Perpetual Trustees Qld [2000] NSWCA 354 revised - 21/12/2000 FILE NUMBER(S) : CA 40136/00 HEARING DATE(S) : 30 November 2000 JUDGMENT DATE : 30 November 2000 PARTIES : Kirk May v Perpetual Trustees QLD JUDGMENT OF : Priestley JA at 14; Meagher JA at 2; Handley JA at 18 LOWER COURT JURISDICTION : District Court LOWER COURT 5146/97 FILE NUMBER(S) : LOWER COURT Sinclair DCJ JUDICIAL OFFICER : COUNSEL : Appellant: S.J. McMillan Respondent: T.H. Barrett/L. Byrne SOLICITORS : Appellant: Daniel Svir Respondent: Stone & Partners CATCHWORDS : Judgment Debtor - assignment - procedure - notice of motion to change name of judgment debtor from assignor to assignee - District Court Rules Part 7.r10(2) - practical purpose of rule. LEGISLATION CITED : District Court Rules Part 7 rule 10(2) - Arnison v Smith (1889) 40ChD at 567, Goodman v Robinson (1886) 18 QB 332 CASES CITED: In re the Freshwater Yarmouth and Newport Railway Company Limited [1913] WN (NSW) 184, In re Woodall (1994) 13 QB 479 In re Bagley [1911] 1 KB 317 DECISION : 1. Leave to appeal granted; 2. Appeal upheld; 3. Judgment below set aside,; 4. The motion below dismissed; 5. The judgment debtor's costs to be borne by the opposing parties who are to have a Certificate under the Suitors Fund Act - 3 - THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA: 40136/00 PRIESTLEY JA MEAGHER JA HANDLEY JA Thursday 30 November 2000 KIRK MAY v PERPETUAL TRUSTEES QUEENSLAND LIMITED (ACN 009 656 811) & 1 ORS JUDGMENT 1 PRIESTLEY JA: I will ask Meagher JA to give his reasons first in these proceedings. 2 MEAGHER JA: In this matter, his Honour Garling DCJ on 9 July 1998 gave judgment in favour of Perpetual Trustee Queensland Limited against Kirk May and Kirk May Pty Limited, the former judgment debtor being the current claimant. 3 On 6 December 1999 his Honour Phegan DCJ refused to set the judgment aside. 4 On 15 September 1998 Perpetual Trustees Queensland Limited assigned the benefit of its judgment debt to a company called Lismore Management Corporation Limited. 5 On 18 September 1998 a certificate of judgment was taken out. 6 On 25 February 2000 a motion was dealt with by his Honour Sinclair DCJ and according to the notice of motion what the claimant sought, that is Perpetual Trustees Queensland, was that the order which had been taken out have its name changed from Perpetual Trustees Queensland to Lismore Management Corporation. The notice of motion relied on District Court Rules Part 7 Rule 10(2), I might say relied on that and nothing else. 7 The order which his Honour made was not quite the order sought but it was an order in effect striking Perpetual Trustees Queensland Limited's name off the certificate and adding the name of Lismore Management Corporation Limited to the certificate. 8 All this was done and it had been done before in the District Court apparently pursuant to Part 7 Rule 10(2). That subrule says "Where the interest or liability of a party passes by assignment, transmission, evolution or otherwise to another person, the Court may make orders for the addition, removal or rearrangement of parties and may make orders for the further conduct of the action." 9 The claimant's case really is that his Honour Sinclair DCJ had no power to do what he did, certainly no power under the subrule relied on. That is because the subrule relied on is limited to the conduct of the action up until the time of judgment. In my view, what the appellant says is demanding of acceptance. 10 An action commences with a statement of claim and ends up in a judgment. When a plaintiff obtains a judgment in his favour his cause of action is extinguished and it becomes merged in the judgment. After that he becomes a judgment creditor. What the rule is dealing with is the removal of obstacles which take place before the final step. 11 Certainly it is true on the case law that in some respects and in some contexts a case after judgment can still be regarded as pending but that does not in my view add anything to the proper construction of Part 7 Rule 10(2). 12 If one looks at the rule and simply applies ordinary principles, one comes to the conclusion which I have just announced. If one searches for authority, one has in my view authority fairly close to the present case and I refer to the English Court of Appeal decision Arnison v Smith (1889) 40 Ch D at 567. 13 For those reasons, I am in favour of making the following orders: (1) Leave to appeal granted. (2) Appeal allowed. (3) Judgment of his Honour Sinclair DCJ set aside. (4) The opponent to pay the costs of today's application and of the proceedings before his Honour Sinclair DCJ and to have a certificate under the Suitors Fund Act . 14 PRIESTLEY JA: I agree. It seems to me that when Part 7 Rule 10(2) is read in the light of the case of Goodman v Robinson (1886) 18 QB 332 and In re The Freshwater Yarmouth and Newport Railway Company Limited [1913] WN (NSW) 184 as well as in the light of s 107 of the District Court Act and the rules immediately before and after Rule 10 in Part 7, the words "for the further conduct of the action" in subrule 2 of Part 7 Rule 10 should be taken as referring to the conduct of the action until judgment. On that footing, the order made by his Honour Sinclair DCJ was not one which was open to him to make. 15 The general position appears to be, in light of the two cases that I have mentioned and others that were referred to in argument today, that when an assignment of the whole of a judgment debt has been made pursuant to contract, the assignee can get the benefit of the judgment debt without the need to become a party to the proceedings but by following the other procedures available, as for example by way of the leave that can be obtained under s 107, even although it would seem that that leave would need to be obtained, in form at any rate, by the assignor, the judgment creditor. The point is that there is no substantial difficulty and probably no greater practical difficulty in the assignee of a judgment debt getting the benefit of that assignment by the method I have suggested than by the method the parties were hoping to pursue in this case by substituting a different name in the form of judgment. 16 Since as a practical matter I thus see no obstacle to the construction of the rule which I favour, and since indeed in my view that construction seems relatively plain, I favour the adoption of that construction and therefore since it may well be a matter that has been causing some practical perplexity in the District Court, as indicated by the other cases decided in the District Court on the point, I would join in granting leave and in upholding the appeal. 17 I agree with the orders proposed by Meagher JA. It may be necessary to add an order that the motion which was before his Honour Sinclair DCJ should be dismissed and the costs both of that motion and of the proceedings today of the judgment debtor should be paid by the opposing parties. 18 HANDLEY JA: I agree with the orders proposed by Meagher JA as amended by Priestley JA. I am not altogether persuaded that there was not power to add a party to these proceedings after judgment but I am satisfied beyond any doubt that there was no power to make the order that Sinclair DCJ made. That was an order which removed the name of the original plaintiff and judgment creditor, Perpetual Trustees Queensland Limited, from the record and substituted as the judgment creditor Lismore Management Corporation Limited. An order in that form in accordance with the general principles prima facie operates retrospectively to the commencement of the proceedings and not merely prospectively from the date of the order. 19 The cause of action at the time the proceedings were commenced was vested in the original judgment creditor. It was still vested in the judgment creditor when judgment was entered on 9 July 1998. The assignee did not acquire its interest in the judgment until 15 September 1998 and accordingly the order made, which removed the name of the original judgment creditor, was in my view clearly beyond power. There may have been power to add the assignee as a party. A suggestion to this effect appears in In re Woodall (1884) 13 QB 479 at 483 where Lord Justice Cotton said that it was not necessary to make the executrix a party by amendment but seemed to envisage that such an order might be made and dictum to the same effect is to be found in the judgment of Lord Cozens-Hardy MR, in In re Bagley [1911] 1 KB 317 at 325 where he said that it was not necessary for the assignee to be made a party before obtaining leave to issue execution. 20 I express no view on whether the rules of the District Court do permit the making of such an order but as I have said I am amply persuaded that there was no power to make the precise order that was made in this case and no substantial utility in doing so for the reasons given by the presiding judge. I agree with the orders proposed by Priestley JA. 21 BARRETT: A matter of clarification, your Honours. Insofar as Priestley JA referred to agreeing with Meagher JA's orders, or the substance of the order that Meagher JA mentioned that was not further mentioned was the Suitors Fund Certificate. 22 PRIESTLEY JA: I have made a note here now of the orders that I think between us we have indicated that the Court should make. I will read it out and see if anybody wants to say anything about it. 23 The orders of the Court are - 1. Leave to appeal granted, 2. Appeal upheld, 3. Judgment below set aside, 4. The motion below dismissed, 5. The judgment debtor's costs to be borne by the opposing parties and a Suitors Fund Certificate to be granted to those opposing parties. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.