Burrell Solicitors Pty Ltd v Reavill Farm Pty Ltd [2018] NSWSC 107

Supreme Court New South Wales

Medium Neutral Citation: Burrell Solicitors Pty Ltd v Reavill Farm Pty Ltd [2018] NSWSC 107 Hearing dates: 2 February 2018 Date of orders: 02 February 2018 Decision date: 02 February 2018 Jurisdiction: Common Law Before: Garling J Decision: (1) Notice of Motion in each proceeding filed by the defendants on 6 September 2017 be dismissed. (2) Order the defendants to pay the costs of the plaintiff of those Notices of Motion. (3) Judgment reserved on the remaining issues. Catchwords: CIVIL PROCEDURE – application for adjournment – lack of expedition by defendants – interests of justice – overriding purpose – Civil Procedure Act 2005 Legislation Cited: Civil Procedure Act 2005 Cases Cited: Not Applicable Texts Cited: Not Applicable Category: Procedural and other rulings Parties: Burrell Solicitors Pty Ltd (P) Reavill Farm Pty Ltd (D1) Champions Quarry Pty Ltd (D2) Jeffrey Francis Champion (D3) Diana Christine Champion (D4) Representation: Counsel: N Simpson (P) M Jaireth (D1-D4) L Livingston (Applicant for BS Legal Pty Ltd)

Solicitors: Piper Alderman (P) Resolve Litigation Lawyers (D1-D4) File Number(s): 2013/255030; 2013/255045 Publication restriction: Not Applicable

EX TEMPORE Judgment 1. In 2013, the Court entered judgment in favour of Burrell Solicitors Pty Limited against four defendants: Reavill Farm Pty Limited, Champions Quarry Pty Limited, Jeffrey Francis Champion and Diana Christine Champion. Those judgments, at the time that they were entered, totalled about $540,000 ("the costs judgments"). 2. After inter-partes litigation (which potentially may have led to the four defendants obtaining either a monetary sum judgment which could be set off against the costs judgments, or else, relief precluding the plaintiff from enforcing the costs judgments) concluded adversely to the defendants on 1 September 2017, the four defendants subsequently filed a Notice of Motion seeking orders to enable them to pay the costs judgments by instalments. 3. At the time those applications were filed, evidence was filed about the financial position of each of the defendants. That evidence revealed, so far as Reavill Farm Pty Limited was concerned, that it had an excess of assets over liabilities of about $2.1M. The financial statement in respect of Champions Quarry Pty Limited reveals that it had an excess of assets over liabilities of about $3.5M. The position of the two individuals was far more modest, although each revealed an excess of assets over liabilities. 4. Collectively, the four defendants, as at the time these applications were filed, were in a financial position in which they had net assets that well exceeded the debt founded on the costs judgments, and which was still owed. As well, Mr Champion informed the Court in his affidavit that he had entities which he controlled, other than those that were the subject of the costs judgments, which had assets to which he intended to have resort. One such asset was an unencumbered property in respect of which a valuation in 2014 had suggested that its value exceeded $2M. 5. On 5 September 2017, an Assistant Registrar of the Court refused the defendants' application to pay the judgment debts by instalments. On 6 September 2017, the defendants filed a Notice of Motion objecting to the order refusing the instalment application, seeking that this Court set aside that order and seeking an order that the debt based on the costs judgments be paid by instalments. 6. No further evidentiary material relating to the financial position of the parties has been filed since September 2017. 7. On 27 October 2017, the Motion objecting to the order refusing the instalment payments was fixed for hearing today. At the same time, the Court also fixed for hearing today a dispute between Burrell Solicitors Pty Limited, the judgment creditor, and a company, BS Legal Pty Limited ("BS Legal"), as to which of those two companies was entitled to the fruits of the costs judgments which had been entered in 2013. The Court has heard, and has reserved its judgment on that issue. 8. At the conclusion of that hearing, the Court proceeded next to deal with the Notice of Motion filed by the four defendants. Counsel for the four defendants sought an adjournment of the Notice of Motion for a period of six months. The basis for that adjournment application, as articulated in an affidavit of the defendants' solicitor, Mr Hing, was that Mr Jeffrey Champion, one of the four defendants, wished to explore the prospect of and, if successful, obtain finance on the security of a property not owned by any of the defendants located at Tuckurimba in order to pay out the judgment debt. 9. Mr Hing set out five steps which Mr Champion proposed to engage in, as well as a step necessitating a variation of an undertaking given to the Court of Appeal in the course of other litigation. Mr Hing deposes that he was informed by Mr Champion and believed that the process referred to in those steps "… will take up to six months and the defendants will use their best endeavours to pay the judgment debts within this period." It is on the basis of this statement that an adjournment for six months is sought. 10. Counsel for the defendants submitted that it was in the interests of justice for that adjournment to be granted principally so as to enable a resolution of the dispute between the plaintiff and BS Legal as to who is lawfully entitled to the proceeds of the costs judgments; and secondly, to enable a course of conduct which is more likely to more speedily result in the debts being paid. Whilst ever the Notice of Motion filed by the defendants objecting to the order refusing the instalment application is on foot, there is, by reason of the legislation, a stay on the enforcement of the judgment debts. 11. Counsel for the defendants accepts, as he inevitably must, that his clients are not directly affected by the dispute as to the entitlements between the plaintiff and BS Legal in that his clients would be entitled to pay the judgment debts into Court to abide by the resolution of the competing position of those companies. In other words, his clients would be able to discharge those debts, regardless of the identity of the judgment creditor, by paying the money into Court and avoiding any further protraction. 12. The evidence reveals that these debts are long-standing - the judgments first having been entered in 2013. I accept that, at least until the Court of Appeal delivered its decision at the end of June 2017, the defendants had an argument that enforcement of the costs judgments should not be permitted to take place. Indeed, they had earlier obtained the stay on the enforcement of the costs judgments during the conduct of the associated litigation. 13. However, once the Court of Appeal delivered its decision on 28 June 2017, there was simply no reason for the defendants to refrain from paying the judgment debt any longer. 14. The evidence does not reveal that Mr Champion or any of the defendants, or anyone on their behalf, has taken any steps since 28 June 2017 to explore whether money could be raised to pay the judgment debts. Putting it differently; other than making an application to pay by instalments, which was short-lived and, on its face, hopeless, the defendants have simply done nothing to address the outstanding judgment. 15. Any application for adjournment must be determined according to the interests of justice and, in so doing, the Court is obliged to give effect to the overriding purpose set out in s 56(1) of the Civil Procedure Act 2005, that is, to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Section 58 permits the Court, in addition to having regard to the overriding purpose in considering whether or not to grant an adjournment, to have regard to the degree of expedition with which the respective parties have approached the proceedings, whether the degree of any lack of expedition is beyond the control of the respective parties and the degree of injustice that would be suffered as a consequence of any order. 16. The defendants have not approached the resolution of paying of the judgment debts with any expedition at all. They have simply done nothing, even up until now, and make a vague promise that they will address the matter within the next six months. 17. The plaintiff, which is the judgment creditor on the record, is in liquidation. The liquidator is entitled to proceed with the liquidation with all promptitude. An order adjourning the notice of motion would mean that a stay of enforcement proceedings would remain, thereby inevitably delaying the proper course of the liquidation. 18. The proposition that the defendants should be entitled to wait until the resolution of the debate between the plaintiff and BS Legal is without merit. Debts are owed. The two parties between themselves are arguing about which of them is entitled to the proceeds of the debts. Neither party argues that in any respect, the defendants are excused from paying the debts in full. On the contrary, both of those parties claim to be entitled to demand the full amount of the debts from the defendants. The defendants' position is entirely inconsistent with being able to pay money into Court. 19. There is no evidence before me that prejudice would occur to the defendants of any unremitting or unresolvable kind if the order for adjournment is refused. This is not a case, by way of analogy, where a person is to be turned out of their home if a stay of a judgment is not granted. On the contrary, the costs judgments exist against parties who tell the Court that they have more than sufficient assets to pay those judgments. They simply do not wish to. 20. On the other hand, prejudice would flow to the judgment creditors and the liquidator of the judgment creditor if an adjournment was granted. In addition, the granting of an adjournment does not reflect the overriding purpose in s 56 of the Civil Procedure Act and I concluded, as I indicated to counsel, that the application for an adjournment was not made out. I refuse it. 21. With the application for adjournment having been refused, counsel for the defendants indicated to the Court that the defendants did not wish to proceed with their motion of objection to the order refusing the instalment application. 22. Accordingly, it is appropriate for the Notice of Motion in each proceeding filed by the defendants on 6 September 2017 to be dismissed.