Martinek v Evans [2004] FCA 1269 (13 September 2004)

PRACTICE AND PROCEDURE – judgment – enforcement – failure to comply with costs orders – whether Court should grant summons seeking oral examination of and production of documents by judgment debtor – reliance on enforcement procedures of Supreme Court of the State or Territory in which judgment to be enforced – whether clear that judgment to be enforced in Victoria – whether other methods of execution should be attempted first – whether bankruptcy notice more appropriate than summons with non-attendance punishable as contempt of court

Federal Court Rules O 37 r 1, O 37 r 7
Supreme Court (General Civil Procedure) Rules 1996 (Vic) O 67

Martinek v Evans [2002] FCA 1584 referred to
Martinek v Evans [2003] FCA 1403 referred to

MARY-ANN MARTINEK v MARK EVANS AND CHIEF OF ARMY
V 7 of 2002
V 373 of 2002

GRAY J
13 SEPTEMBER 2004
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 7 of 2002 V 373 of 2002

BETWEEN:	MARY-ANN MARTINEK APPLICANT
AND:	MARK EVANS FIRST RESPONDENT CHIEF OF ARMY SECOND RESPONDENT
JUDGE:	GRAY J
DATE OF ORDER:	13 SEPTEMBER 2004
WHERE MADE:	MELBOURNE

1. The respondents have leave to file in Court the affidavits of Lynn Charles St John sworn on 10 September 2004, Naomi Rose Miller sworn on 10 September 2004, Angela Barnett sworn on 10 September 2004 and Lieselotta Rosa Siebel sworn on 3 September 2004 and the exhibits to those affidavits.

2. The motions the subject of the notice of motion filed on 26 August 2004 be dismissed.

3. There be no order as to the costs of the motions.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 7 of 2002 V 373 of 2002

BETWEEN:	MARY-ANN MARTINEK APPLICANT
AND:	MARK EVANS FIRST RESPONDENT CHIEF OF ARMY SECOND RESPONDENT

JUDGE:	GRAY J
DATE:	13 SEPTEMBER 2004
PLACE:	MELBOURNE

1 By notice of motion filed on 26 August 2004, the respondents in two completed proceedings in this Court seek orders in the following terms:

2 Attached to the notice of motion is a draft summons, calling upon the applicant in each of the two proceedings to attend before the Court and to produce documents in categories described in the draft summons.

4 Attempts have been made to serve the notice of motion on the applicant, both personally and by registered post. So far as the registered post attempt was concerned, it took place on 9 September at 3.10 pm. It therefore remains unclear whether the item will be returned in the ordinary course of registered post, or whether it has reached the applicant. A further attempt was made to serve personally, involving among other things an electoral roll search. The consequence of the electoral roll search reveals that the address for which the applicant is on the electoral roll is factory premises, and the occupants of the building have not heard of the applicant. Other attempts to find an actual address, as distinct from the post office box address, which the applicant has used as an address for service in the proceedings, have been unsuccessful. Nevertheless, counsel for the respondents suggest that the motion can be heard without notice to the applicant, and I have proceeded to deal with the matter on that basis.

5 The application is the result of two earlier proceedings in the Court. In one of them, the applicant sought to challenge an attempt to discharge her from her service in the Australian army. That proceeding resulted in terms of settlement, the detail of which need not trouble me further in relation to this application. In a subsequent proceeding, despite the terms of settlement, the applicant attempted to raise further challenges to the process of discharging her from army service. On 18 December 2002, North J dismissed her application in that proceeding. See Martinek v Evans [2002] FCA 1584. On that date, his Honour made orders, including the following orders:

6 The applicant did not apply by 15 January 2003 to vary that order. Instead, she filed a notice of motion on 3 October 2003, in essence seeking an enlargement of the time fixed by the order of 18 December 2002. On 24 November 2003, North J dismissed the notice of motion and ordered that the applicant pay the respondent’s costs of and incidental to it. See Martinek v Evans [2003] FCA 1403.

7 The bill of costs for the order made on 18 December 2002 was duly taxed at $26 282. The bill of costs in respect of the order for costs made on 24 November 2003 was taxed at $15 785. Hence, the total of $42 067, which is said to be owing under the two judgments.

8 The affidavit material in support of the notice of motion reveals that the respondents have made various attempts to obtain compliance with the orders for costs, including offering the applicant an opportunity to request payment by instalments if she is unable to meet the full cost. The applicant has been unresponsive to these attempts. The respondents’ solicitors have received communications from a person describing himself as a ‘conciliator’, and apparently acting on behalf of the applicant. In a telephone conversation, the conciliator has stated that the applicant has no intention of complying with the costs orders.

9 In a lengthy and detailed letter, dated 14 April 2004, the conciliator set out the contents of the terms of settlement in the first of the earlier proceedings, and then proceeded to challenge the validity and effect of those terms in various ways, in a manner that suggested an intention on the part of the applicant to reopen many of the matters that were then settled. The conciliator also indicated that he had referred the matter to someone described as ‘our in-house solicitor’ and suggested that the solicitor was in the process of issuing a notice of motion. It does not appear that any further proceeding has ever been commenced. In a further telephone conversation, on 21 May 2004, the conciliator again indicated that the applicant had no intention of complying with the costs orders. I may therefore take it that the applicant cannot be expected to comply in the near future with those orders.

10 I cannot help commenting, however, that if the conciliator is encouraging the applicant to believe that she is not obliged to comply with the Court orders in respect of costs, then the conciliator is doing the applicant no favours. His conduct is indeed reprehensible if that is the case. It is plain that the applicant is bound by the orders and is obliged to comply with them and to pay the sums due in respect of costs.

11 The application by way of the notice of motion is made pursuant to O 37 r 7 of the Federal Court Rules. Subrule (1) of that rule provides:

12 The form of this rule presents the respondents with the obvious difficulty of determining in which State the order is to be enforced. Since, on the face of the material they have no evidence of the location of any assets, but rather seek to ascertain, through the process of examination of the applicant, whether assets exist, it is impossible for them to say that they intend to enforce the order in a particular State. Counsel for the respondents pointed me to O 37 r 7(4), in which it is said that:

13 Again, the difficulty is that the respondents apparently have formed no view as to their desire to enforce the order in any particular State or Territory. They will enforce it wherever they hope to find assets. Counsel for the respondents referred me to the material relating to the electoral roll search, in an endeavour to suggest that because the applicant is registered on the electoral roll in Victoria it is most likely that the order would be enforced in Victoria. The material as to the residence of the applicant in Victoria at the present time is, as I have said, not encouraging.

14 Counsel for the respondents referred me to O 67 of the Supreme Court (General Civil Procedure) Rules 1996 (Vic), the Rules of the Supreme Court of Victoria. Order 67 relevantly provides:

(1) The Court may, on application by a person entitled to enforce a
judgment, order a person bound by the judgment to –

(2) Where the Court makes an order under paragraph (1), it may order
that the person attend to be examined before or produce the document or thing to a Master or Registrar.

(1) An application for an order under Rule 67.02 or 67.03 may be made
without notice to the person bound by the judgment.

(2) An order under Rule 67.02 or 67.03 shall be served personally on the
person bound and on any other person ordered to attend or to produce any document or thing.’

15 The provisions of O 67 are plainly in discretionary form, although the notes to the rules in Williams Civil Procedure Victoria suggest that there is English authority that an order for examination is usually made as of course, unless the judgment debtor has become insolvent.

16 In a case like the present, I should have expected that the respondents would place before the Court some evidence of the likelihood that the applicant would have assets. There is no evidence in the material in support of the notice of motion as to what salary the applicant might have been receiving while she was serving in the army, or what benefits she might have received under the terms of settlement, that could have translated themselves into assets of some kind. Nor is there any evidence in the material in support of the application of attempts to find assets, other than by the use of the resources of the Court in conducting an examination of the applicant. There is no evidence, for instance, of searches of the register of land titles, or of other searches. Counsel for the respondents informed me from the bar table that such searches have in fact been conducted, and that they have revealed both the involvement of the applicant in some corporations and the registration in her name of some real property at Bendigo, which is subject to a mortgage.

17 There are several reasons why I do not think that I should grant the orders sought by the respondents in the notice of motion. The first is that I am by no means satisfied that the rules of the Supreme Court of Victoria are the appropriate provisions to which recourse should be had, when it is not known in which State or States or Territory or Territories the order for costs might be enforced. The intent rather is to ascertain where assets might be, against which enforcement could be levied. I do not think that O 37 r 7(4) is an answer to this difficulty. It merely provides an entitlement for the judgment creditor to confine the enforcement procedures to those of one State or Territory, where more than one is involved.

18 The second reason is that the material before the Court is inadequate. My view is that the procedure of examining a judgment debtor as to his or her means of paying the judgment debt should be used as a last resort, after other means of finding assets have been utilised. That is why I should have expected the notice of motion to be supported by material disclosing what searches had been made and the results of those searches. If indeed it is the case that a search has located real property registered in the applicant’s name, I should have expected that the respondents would have sought to enforce the judgment against that property. The sum owing under the two orders for costs, as taxed, is not a particularly large sum. I find it hard to accept that it is an appropriate procedure, when there is known real property subject to a mortgage, to seek to examine the owner of that real property in an endeavour to ascertain to what extent the property is subject to the mortgage and to what extent it might be available for execution. In my view, therefore, the material is inadequate.

19 The third reason why I should be reluctant to grant the orders sought is that, on the assumption that a summons in an appropriate form were to be issued and were able to be served personally, the sanction for non-attendance would be the issue of a warrant for the arrest of the applicant pursuant to O 37 r 1 of the Federal Court Rules. To expose the applicant to the possibility of such a sanction in a case like the present seems to me to be undesirable, especially if there is the possibility of ascertaining the presence of assets against which execution could be levied by other means. I drew the attention of counsel for the respondent to the possibility of using a bankruptcy notice. If, as counsel for the respondent suggested, part of the aim of a summons to examine the applicant was to seek to bring matters to a head and perhaps to prompt some negotiation as to the payment of costs, then I should have thought that a bankruptcy notice would have precisely the same effect but without the undesirable sanction of the possible arrest of the applicant if she were to maintain her attitude that she has no intention of complying with the orders.

20 For all of these reasons, I am of the view that the motions should be dismissed. There will of course be no order as to the costs of the motions. The orders I make are:

2. The motions the subject of the notice of motion filed on 26 August 2004 be dismissed.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

	The applicant did not appear and was not represented

Counsel for the respondents:	C Horan

Solicitor for the respondents:	Phillips Fox

Date of Hearing:	13 September 2004

Date of Judgment:	13 September 2004

Federal Court of Australia

Martinek v Evans [2004] FCA 1269 (13 September 2004)