Big Country Developments Pty Limited v Peter Griffiths (No 4) [2019] NSWSC 1791

Supreme Court New South Wales

Medium Neutral Citation: Big Country Developments Pty Limited v Peter Griffiths (No 4) [2019] NSWSC 1791 Hearing dates: 12 December 2019 Decision date: 12 December 2019 Jurisdiction: Equity - Commercial List Before: Ball J Decision: (1) The fourth defendant's notice of motion filed on 14 October 2019 be dismissed.

(2) The fourth defendant pay the plaintiff's costs of the notice of motion. Catchwords: CIVIL PROCEDURE – Payment of judgment debt – section 107 of the Civil Procedure Act 2005 (NSW) and part 37 of the Uniform Civil Procedure Rules 2005 (NSW) – application to pay judgment debt by instalments – application to set aside decision of deputy registrar refusing application to pay debt by instalments – hearing de novo – whether to permit payment by instalments Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: In the matter of Australian Institute of Fitness (VIC & TAS) [2016] NSWSC 1143 Hellier Capital Pty Limited v Richard Albarran [2009] NSWSC 403 Category: Procedural and other rulings Parties: Big Country Developments Pty Limited (Plaintiff) Adrian Duncan (Fourth Defendant) Representation: Counsel: J O'Sullivan (Plaintiff) B Katekar with QM Noakhtar (Fourth Defendant)

Solicitors: &Legal (Plaintiff) O'Neill Partners (Fourth Defendant) File Number(s): 2011/404546

EX TEMPORE Judgment 1. By a notice of motion filed on 14 October 2019, the applicant, Mr Adrian Duncan, seeks an order setting aside an order made by the Deputy Registrar refusing his application to pay by instalments a judgment debt for which he is liable. The judgment arises out of proceedings commenced by the plaintiff. Big Country Developments Pty Limited (Big Country) in respect of guarantees given by Mr Duncan, who was the fourth defendant, and Mr Justin Fox, the third defendant. On 7 September 2015, the plaintiff obtained judgment against both Mr Fox and Mr Duncan for the sum of $664,613, together with the costs of the proceedings. 2. I was informed that as of 12 December 2019 with interest the total amount of the judgment is in the order of $850,000. 3. Following the orders made on 7 September 2015, Mr Duncan lodged an appeal, which was dismissed by the Court of Appeal on 19 July 2016. Mr Duncan then filed an application for special leave to the High Court, which was ultimately dismissed on 18 November 2016. On 3 January 2017, Big Country registered the judgment of this Court obtained on 7 September 2015 in the High Court of England and Wales. On 2 February 2017, Mr Fox was made bankrupt. It appears that Big Country has been unable to recover any significant amount of the judgment debt as a result of Mr Fox's bankruptcy. 4. During the period from 16 February 2017 until approximately the end of July 2018, Big Country made a number of attempts to serve Mr Duncan in England. Those attempts were unsuccessful. On 14 January 2019, the High Court of England and Wales made an order for substituted service on Mr Duncan. A statutory demand was served on Mr Duncan on 4 May 2019, and on 24 June 2019 Big Country presented a bankruptcy petition. Following unsuccessful attempts to serve the petition, Big Country obtained an order on 24 July 2019 for substituted service on Mr Duncan of that petition. 5. The petition was served on Mr Duncan in accordance with that order on 29 July 2019. The petition first came on for hearing on 18 September 2019 at which time it was adjourned until 30 November 2019. On the same day, Mr Duncan filed a notice of motion in this Court seeking to pay the judgment debt by instalments. That application was refused by the Deputy Registrar on 30 September 2019. It is an appeal from that refusal which is now before the Court. 6. On 12 December 2019 at 2.55am, Mr Duncan sent an email to his solicitor in which he said that he had that day, presumably meaning on 11 December 2019, transferred $80,000 to his solicitor's trust account. The email stated: … When received in your trust account, these funds are to serve as the "Initial Payment" under the Instalment plan. If the orders are made tomorrow, you have my instructions to transfer the AUD80,000 to Big Country at the appropriate account details. 1. The Instalment plan proposed by Mr Duncan involves an initial payment of $80,000 to be paid within fourteen days of the orders being made, then for amounts of $12,000 to be paid monthly for twelve months commencing 4 November 2019; then for amounts of $19,700 to be paid monthly for twelve months commencing 4 November 2020; then for amounts of $21,700 to be paid monthly for twelve months commencing 4 November 2021; and then finally amounts of $21,700 to be paid monthly for twelve months commencing 4 November 2022. It can be seen from this proposed payment plan that full payment will not occur until at least four years has elapsed. 2. In an affidavit sworn on 1 November 2019, Mr Duncan sets out information in relation to his current financial position. Broadly speaking, he says that he has no assets that could be sold to raise funds or which could be used as security to borrow funds. He does, however, say he has interests in three businesses. The first is in a group of companies he refers to as including Savants Restructuring Ltd and Savants Covenant Advisory Ltd (the Savant Companies), which provide insolvency advice to companies and advice to trustees of final salary pension schemes. Mr Duncan is the sole director and shareholder of both companies. The second is an interest in ABC Recycling Ltd and Prime Waste. Those businesses currently operate three trucks to collect commercial and industrial waste in London and, according to Mr Duncan, currently have nine employees. The third interest is Funding Flow Investments Ltd. That is said to be a new venture that Mr Duncan is in the process of establishing with a business partner, which is designed to raise funds through the issue of bonds to investors to be lent to distressed corporations. 3. Section 107 of the Civil Procedure Act 2005 (NSW) and Pt 37 of the Uniform Civil Procedure Rules 2005 (NSW) contain the provisions relating to the payment of a judgment sum by instalments. It is common ground that the hearing before me under those provisions is a hearing de novo, and not an appeal. In considering whether an order for the payment of a judgment debt by instalments should be made, the starting point is that the judgment creditor's right to immediate enforcement of the judgment should not be disturbed without some good reason going to enhancing the prospects of payment in full. As was said by Barrett AJA in In the matter of Australian Institute of Fitness (VIC & TAS) [2016] NSWSC 1143 at [11]: … The principal concern, as I say, is to discover whether an instalment arrangement will be more conducive to the judgment creditor's achieving payment in full in a reasonable time. … 1. In considering that question, the Court is entitled to consider various matters, including the history of the matter, the period of time for payment, the conduct of the judgment debtor, and the evidence going to the judgment debtor's ability to pay: see, for example, Hellier Capital Pty Limited v Richard Albarran [2009] NSWSC 403 at [3]-[4], [9]-[10] per McDougall J. It also may be appropriate for the Court to consider the public interest, including the public interest in persons with professional qualifications continuing to be able to work. 2. In the present case, I am not satisfied that an order for the payment of the judgment debt by instalments would result in the judgment being satisfied within a reasonable period of time. 3. In my opinion, the evidence demonstrates that Mr Duncan has resisted satisfying the judgment against him over a period of approximately four years. Taken alone, some of the events that demonstrate that resistance may have perfectly innocent explanations. Mr Duncan was entitled to appeal from the judgment entered on 7 September 2015 and to seek special leave to appeal to the High Court from the decision of the Court of Appeal, although there is no evidence that the judgment was stayed during that period. It may be that the difficulties in serving him can be explained by inadequate inquiries or bad luck on the part of Big Country, although the number of failed attempts and the orders for substituted service suggest that that is unlikely. Most telling in my view, though, is the fact that it was only after the hearing of the bankruptcy petition on 18 September 2019 that Mr Duncan first made the application to pay by instalments, and it was only the day before this application was heard that Mr Duncan says he had sent AUD80,000 to his solicitor's trust account as evidence that he is able to meet the first instalment of his proposed repayment plan. It is in that context that Mr Duncan's evidence that he is now willing and able to satisfy the judgment debt must be evaluated. 4. Mr Duncan's payment plan depends on what is said to be a substantial and recent change in his financial fortunes. He now has a partner who is willing to support him, although curiously only if the payment plan is approved. His former wife now works. That has removed some of the financial pressure of supporting her. Critically, however, the payment plan depends on the success of Mr Duncan's current business interests. However, the information provided by Mr Duncan in relation to those businesses provides no basis for thinking that he will have available sufficient funds to pay the amounts payable in accordance with his proposed plan. As I have said, Mr Duncan refers to three businesses as the source of the funds. First, he says he has been involved with the Savant Companies for ten years. He provides no accounts for those companies, but plainly the only reasonable inference is that they have not produced sufficient revenue to permit Mr Duncan to discharge the judgment debt owed to Big Country. 5. Second is Mr Duncan's interest in ABC Recycling Ltd and Prime Waste in which Mr Duncan says he has a half interest held through a family trust. However, on Mr Duncan's own evidence, that business has only been operating since May 2019. No accounts are provided for it. According to Mr Duncan, the business made a loss between July and September 2019. Mr Duncan does annex to his affidavit sworn 1 November 2019 what is described as a "Consolidated Profit and Loss Statement" for some of his businesses. That document sets out what is said to be actual results for the financial year ended 2019 and forecasts up until the financial year ended 2022. In relation to "Recycling ABC income" the document records that the actual results for the financial year ended 2019 are $151,422.14. Even assuming the financial year ends on 31 December 2019, it is very difficult to reconcile that figure with other evidence given by Mr Duncan suggesting the business has only recently started trading and made a loss over a three month period. 6. The third business interest relied on by Mr Duncan is that conducted by Funding Flow Investments Ltd which, as I have said, is apparently a business venture set up by Mr Duncan with a business partner. It is not clear how Mr Duncan holds his interest in that business. As I have said, the business is said to involve raising capital from investors by issuing bonds to lend to distressed corporations. There is no evidence to suggest that any capital has been raised, and whether any capital will be raised in the future is purely speculative. 7. Taking these matters into account there is no reason to believe that Mr Duncan will be able to comply with his payment plan. Mr Duncan submits that there are public policy reasons for approving the plan. Absent approval, he says that he will be made bankrupt. He says that as a result, he would not be able to work as a liquidator and would not be able to continue to pay child support and to continue to pay employees. However, in my opinion, there are two answers to these points. First, they are no answer to the conclusion that Mr Duncan is unlikely to comply with his payment plan. At most they would provide a reason for accepting a plan that is likely to be complied with, rather than insisting that the whole debt be paid immediately. Second, I am not satisfied that some of the business ventures could not continue in any event. It is not clear, for example, why the waste management business through ABC Recycling Limited and Prime Waste could not continue, nor is it clear why the new venture through Funding Flow Investments Ltd would be unable to continue. 8. For those reasons, the orders of the Court are: 1. Dismiss the fourth defendant's notice of motion filed on 14 October 2019; and 2. The fourth defendant pay the plaintiff's costs of the notice of motion.