FEDERAL COURT OF AUSTRALIA

Linke v TT Builders Pty Ltd (No 2) [2015] FCA 704

THE COURT ORDERS THAT:

1.    Pursuant to rr 41.01 and 41.10 of the Federal Court Rules and s 8(1) of the Enforcement of Judgments Act 1991 (SA), until further order the Second Respondent’s property, namely:

(a)    The whole of the land in Certificate of Title Volume 6109 Folio 395 situated at Lot 2 Archibald Street, American River, South Australia; and

(b)    The whole of the land in Certificate of Title Volume 6109 Folio 396 situated at Lot 50 Archibald Street, American River, South Australia, (collectively referred to as “the Properties”)

be charged with the judgment debt of $94,507.33 arising from the Certificate of Taxation issued 22 May 2015 in this proceeding, interest accruing thereon under r 39.06 of the Federal Court Rules 2011 (Cth), together with the costs and disbursements of and incidental to the interlocutory application filed on 2 July 2015 (“the Charged Debt”);

2.    The charge referred to in Order 1 above remain in force until the earlier of:

(a)    The Charged Debt is paid in full;

(b)    This Order is discharged.

3.    Pursuant to rr 41.01 and 41.10 of the Federal Court Rules and s 8(2) of the Enforcement of Judgments Act 1991 (SA), the charge referred to in Order 1 above be registered on the title of each of the Properties;

4.    Pursuant to r 17.03 of the Federal Court Rules, the above Orders, the Applicant’s interlocutory application filed on 2 July 2015 and the affidavit of Samuel David Burford made 2 July 2015 be served:

(a)    on the First Respondent by delivering them by prepaid courier with proof of delivery to its registered office address;

(b)    on the Second Respondent by the following methods of service:

(i)    transmission by text message to +679 979 6013;

(ii)    transmission by email addressed to the Second Respondent at sales@futureinbuilding.com;

(iii)    delivery by prepaid courier with proof of delivery addressed to the Second Respondent to PO Box 728, Blackwood SA 5051;

(iv)    delivery by prepaid courier addressed to the Second Respondent with proof of delivery to each of 42A Burnell Drive, Belair SA 5052 and 18 Devonshire Road, Hawthorndene SA 5051; and

(v)    by personal service on Armando Tessitore, addressed to the Second Respondent’s attention.

5.    Service in accordance with order 4(b) above will be good and sufficient service of the above Orders, the Applicant’s interlocutory application filed on 2 July 2015 and Mr Burford’s affidavit.

6.    Costs be reserved.

7.    The matter be adjourned for further directions at 9.00am on Friday 24 July 2015.

8.    There be liberty to apply.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

EX TEMPORE REASONS FOR JUDGMENT

1    On 5 October 2014, the applicant’s claim against the first and second respondents, TT Builders Pty Ltd and Mr Tessitore respectively, was resolved by the applicant’s acceptance of an offer of compromise. The background to the applicant’s claim is contained in Linke v TT Builders Pty Ltd [2014] FCA 672.

2    Subsequently, on 23 February 2015, the Court made orders for the taxation of the costs to which the respective parties were entitled pursuant to the acceptance of the offer of compromise and for the identification of the net amount by way of costs to which the applicant is entitled.

3    On 22 May 2015, a Registrar of the Court issued a sealed Certificate of Taxation of the applicant’s costs, net of the amount to which the respondents were entitled, at $94,507.33. Pursuant to r 40.32(2) of the Federal Court Rules 2011 (Cth), a sealed Certificate of Taxation has the form and effect of an order of the Court.

4    The applicant now wishes to enforce the costs order. He seeks orders pursuant to rr 41.01 and 41.10 of the Federal Court Rules and pursuant to s 8 of the Enforcement of Judgments Act 1991 (SA) that land owned by Mr Tessitore at American River on Kangaroo Island be charged with the judgment debt of $94,507.33, together with interest accruing thereon, as well as the costs and disbursements he incurs in enforcing the costs order.

5    Rule 41.01 permits a party to apply, without notice to the opposing party, for directions with respect to the enforcement and execution of an order. The hearing today has proceeded without notice to TT Builders Pty Ltd or Mr Tessitore.

6    Rule 41.10 provides as follows:

41.10    Execution generally

(1)    A party who wants to enforce a judgment or order of the Court may apply to the Court to make an order, to issue any writ, or to take any other step that can be taken in the Supreme Court of the State or Territory in which the judgment or order has been made as if the judgment or order was a judgment or order of that Supreme Court.

(2)    An order made under subrule (1) authorises the Sheriff, when executing the orders of the Court, to act in the same manner as a similar officer of the Supreme Court of the State or Territory in which the order is being executed is entitled to act.

(3)    A party who wants to enforce an order in more than one State or Territory may adopt the procedures and forms of process of the Supreme Court of the State or Territory in which the judgment or order has been made.

As can be seen, r 41.10 implicitly authorises the Court to make an order, to issue any writ, or to take any other step which may be taken by the Supreme Court of the place in which the judgment or order has been made as if that judgment or order was a judgment or order of the Supreme Court. Rule 41.10 should be read in conjunction with s 53 of the Federal Court of Australia Act 1976 (Cth) which provides:

53 Enforcement of judgment

(1)    Subject to the Rules of Court, a person in whose favour a judgment of the Court is given is entitled to the same remedies for enforcement of the judgment in a State or Territory, by execution or otherwise, as are allowed in like cases by the laws of that State or Territory to persons in whose favour a judgment of the Supreme Court of that State or Territory is given.

(2)    This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for the execution and enforcement of judgments of the Court.

7    In this respect, s 8 of the Enforcement of Judgments Act is pertinent to the application of r 41.10 and to s 53 of the Federal Court Act. It provides:

8 – Charging orders

(1)    A court may, on application by a judgment creditor, charge property of a judgment debtor with a judgment debt or part of a judgment debt.

(2)    Where the court makes an order under subsection (1), it may make ancillary or consequential orders—

(a)    requiring registration of the charge; or

(b)    prohibiting or restricting dealings with the property subject to the charge; or

(c)    providing for the sale of the property and the application of the proceeds of sale; or

(d)    relating to any other incidental or consequential matters.

8    By virtue of the definitions in s 3 of the Enforcement of Judgments Act, the Supreme Court of South Australia is a Court for the purposes of s 8. Similarly, the applicant is a judgment creditor for the purposes of s 8.

9    The applicant seeks the charging orders in the present case, having regard to the following matters:

(a)    TT Builders does not own any real property.

(b)    The evidence suggests that Mr Tessitore may be disposing of assets with the effect that enforcement of the judgment debt may be thwarted. When the applicant commenced the proceedings, Mr Tessitore owned properties at Belair and Hawthorndene (suburbs of Adelaide) as well as the two blocks at American River. However, on 5 July 2012, Mr Tessitore transferred the Belair property to his son; in December 2014, he disposed of the Hawthorndene property; and the two properties at American River are presently advertised for sale.

(c)    Mr Tessitore has not responded to demands for payment of the judgment sum or to other correspondence from the applicant’s solicitors. His former solicitors ceased to act for him with effect from 27 May 2015.

(d)    Despite several searches by the applicant’s solicitors, Mr Tessitore’s present whereabouts are unknown. His last known address as notified by his former solicitors in their Notice of Cessation to Act is the Hawthorndene property. However, as I have already indicated, the evidence indicates that Mr Tessitore disposed of that property in December 2014.

(e)    Mr Tessitore has not answered calls to a mobile telephone number with which he has been associated in the past.

10    In this combination of circumstances, the applicant has apprehensions that it will be difficult for him to enforce the judgment debt.

11    It is in the public interest that the Court’s orders are respected and obeyed. Accordingly, it is appropriate for the Court to assist judgment creditors to enforce their entitlements. Respect for the law will be undermined if judgment debtors can readily frustrate enforcements of judgments against them. Spender J referred to these considerations in Guthrie v Robertson (1987) 13 FCR 336 at 337-8 when he said:

It is obviously crucial to the efficiency of the Court’s process that its orders be obeyed, and the Court should be astute to lend whatever assistance it can to enable its orders to be enforced.

Section 53 of the Federal Court Act, s 8 of the Enforcement of Judgments Act and r 41.10 reflect this public interest.

12    Having regard to these matters, I am satisfied that it is appropriate for the charging orders sought by the applicant to be made and for there to be orders that the charges be registered on the titles of the two Kangaroo Island properties.

Associate:

Dated:    10 July 2015