Shreeve & Ors v Jourdan

1. [1]

   The essential issue in this case is whether proceedings are an abuse of process when the plaintiff sues afresh on an otherwise stale judgment debt which he or she is no longer able to enforce without leave of the Court. If so, what is the appropriate relief?

Background

1. [2]

   The plaintiffs in these proceedings are Glenda Shreeve and Colin Shreeve who are married to each other. Mr Shreeve is the sole director of C & G Building Consultants Pty Ltd and Malachi Corporation Pty Ltd. The companies are further plaintiffs. I will refer to the group as the Plaintiffs. The essential business of the Plaintiffs is construction.

2. [3]

   The defendant, Raymond Jourdan, appears to have pursued a number of vocations over the years. More recently, he has described himself as a lawyer with a background in law and business.

3. [4]

   Up until December 2003 the Plaintiffs were involved in property development projects with four other interests. Mr Jourdan was one of the other interests. The details of the projects are no longer relevant.

4. [5]

   In December 2003 the Plaintiffs terminated their involvement with the projects. The termination was formally documented in a Deed dated 19 December 2003. There were 17 parties to the Deed of which four were the Plaintiffs. Mr Jourdan and companies related to him were also parties to the Deed, as were unrelated third parties such as a person named Ms Reece.

5. [6]

   Relevantly, Recitals G and H to the Deed provided:

6. [7]

   The operative clauses of the Deed provided for numerous payments to be made amongst the 17 parties. For current purposes it is sufficient to state that clause 7 provided as follows:

7. [8]

   By clause 4 another party promised to pay C & G Building Consultants $115,000 by 30 April 2004. By clause 6 another party promised to pay Malachi Corporation $50,000 by 30 June 2004. Both obligations were guaranteed by Mr Jourdan. Other parties to the Deed also guaranteed the payments to the Plaintiffs.

8. [9]

   Mr Jourdan did not perform his clause 7 promise to pay by 30 June 2004, or at all. C & G Building Consultants did not receive the money promised to it under clause 4 and Malachi Corporation did not receive the money promised to it under clause 6. Mr Jourdan did not pay either C & G Building Consultants or Malachi Corporation under the guarantee.

9. [10]

   On 22 July 2004 Mr and Mrs Shreeve filed a Statement of Liquidated Claim in the District Court. The amount claimed was $145,000. The named defendants were Mr Jourdan and the two guarantors of his obligations under the Deed. As against Mr Jourdan the cause of action was breach of the Deed. Interest was also claimed under s 83A of the District Court Act 1973 (NSW), together with costs.

10. [11]

    On 5 August 2004 further District Court proceedings were commenced against Mr Jourdan, this time by C & G Building Consultants. It sued to enforce Mr Jourdan’s guarantee of the $115,000 payment under clause 4 of the Deed. The relief claimed was described as “$115,000” plus interest and costs.

11. [12]

    On 16 August 2005 a third District Court proceeding was commenced against Mr Jourdan by Malachi Corporation. It too sued to enforce Mr Jourdan’s guarantee. The relief claimed was “$50,000” plus interest and costs.

12. [13]

    Mr Jourdan defended all the District Court proceedings. The basis for his defence is not revealed by the evidence on this application. It is apparent from the documents that Mr Jourdan brought a Cross Claim against the Plaintiffs. It appears that all three proceedings ran together. There was a single contested hearing.

13. [14]

    On 20 March 2006 the three District Court proceedings were determined by Judgments in favour of each of the Shreeves, C & G Building Consultants and Malachi Corporation. The terms of the Judgment in the Shreeves’ proceedings were:

14. [15]

    Judgments in equivalent terms were given in favour of each of C & G Building Consultants and Malachi Corporation.

15. [16]

    The copies of the Judgments in evidence state that they were given on 20 March 2006 but do not reveal if they were entered and, if so, when. The parties’ submissions proceeded on the assumption that the Judgments were entered for the purposes of s 133(1) of the Civil Procedure Act 2005 (NSW). Presumably that occurred on or shortly after 20 March 2006.

16. [17]

    Mr Jourdan did not pay the sums which were the subject of the Judgments against him. There is evidence that Mr Jourdan was experiencing financial difficulties in 2006. By then the other guarantor against whom the Judgments had been obtained was bankrupt.

17. [18]

    At this time the Plaintiffs were also in financial difficulties. Their difficulties arose from the aftermath of the previous property development projects and the cost of the litigation against Mr Jourdan. The Plaintiffs were also concerned that Mr Jourdan was on the verge of bankruptcy. There is nothing to suggest that it was unreasonable for them to have that concern. The Plaintiffs thought that there was a low prospect of recovery from Mr Jourdan and were not willing to incur the costs of “enforcement proceedings”.

18. [19]

    In 2008 the Plaintiffs discovered that Mr Jourdan had gone to live in India which they saw as another reason why recovery from him was unlikely.

19. [20]

    In any event, there was no action by the Plaintiffs to enforce the Judgments. There was no communication between the parties for the next twelve years.

20. [21]

    From approximately 2010 Ms Shreeve conducted internet searches “from which [she] believed that Mr Jourdan was living overseas”. She continued to conduct internet searches. By 2013 Ms Shreeve was unsure whether Mr Jourdan was still living abroad or had returned to live in Australia.

21. [22]

    “Sometime in 2017” Ms Shreeve saw from the internet that Mr Jourdan was living in Sydney. The Shreeves sought legal advice as a result of which the Plaintiffs commenced the current proceedings. Mr Shreeve says in his Affidavit:

22. [23]

    Ms Shreeve says in her Affidavit:

23. [24]

    The Statement of Claim was filed on 16 March 2018, which was four days short of the twelfth anniversary of the District Court Judgments.

24. [25]

    The named plaintiffs in the Statement of Claim are the Shreeves, C & G Building Consultants and Malachi Corporation. Mr Jourdan is the defendant.

25. [26]

    In relation to the Shreeves, the Statement of Claim pleads as follows:

26. [27]

    Corresponding pleadings are made in respect of the Judgments obtained by C & G Building Consultants and Malachi Corporation.

27. [28]

    The relief claimed in the Statement of Claim is as follows:

28. [29]

    The Statement of Claim was served on Mr Jourdan on 15 April 2018.

29. [30]

    On 23 April 2018 solicitors acting for Mr Jourdan wrote to the solicitors acting for the Plaintiffs and contended that it is impermissible to commence new proceedings to enforce a judgment debt arising from previous proceedings. The Plaintiffs’ solicitor did not agree. A short correspondence ensued but consensus remained elusive. On about 11 May 2018 Mr Jourdan’s solicitors ceased acting for him.

30. [31]

    On 17 July 2018 the Plaintiffs obtained a Default Judgment against Mr Jourdan. Despite the form of the Statement of Claim, in which the four different Plaintiffs sued in respect of three discrete debts, the Default Judgment was a single judgment for $764,442.04. The Default Judgment was given in favour of all four Plaintiffs.

31. [32]

    It is unclear on the evidence whether Mr Jourdan was informed of the Default Judgment in 2018. There is no evidence of him taking any steps to have it set aside. He did not pay the $764,442.04.

32. [33]

    There is no evidence of any steps being taken by the Plaintiffs to enforce the Default Judgment for the next six years. No explanation is given for that inactivity.

33. [34]

    On 6 May 2024 the Plaintiffs caused a Bankruptcy Notice to be issued in respect of the $764,442.04 Default Judgment.

34. [35]

    On 8 May 2024 Mr Jourdan received a letter from solicitors acting for the Plaintiffs. The Bankruptcy Notice and a copy of the Default Judgment were enclosed with the letter. Mr Jourdan was invited to pay the amount of the Default Judgment. He did not. The Bankruptcy Notice was formally served on 22 June 2024.

35. [36]

    On 28 June 2024 new solicitors acting for Mr Jourdan wrote to the Plaintiffs’ solicitors and asserted that the Default Judgment was irregular because it was a single judgment in favour of all four Plaintiffs when each Plaintiff was only entitled to a lesser discrete sum. For that express reason and no other, on 10 July 2024 the Plaintiffs consented to the Default Judgment being set aside. The Bankruptcy Notice was also withdrawn.

36. [37]

    On 5 August 2024 Mr Jourdan filed a Defence in which he denies the Plaintiffs’ entitlement to the relief claimed. He does not dispute the District Court Judgments, nor does he dispute that he has not paid. He does not admit his liability for interest. The only ground put forward as a defence is that these proceedings disclose no reasonable cause of action and/or are an abuse of process.

Mr Jourdan’s application

1. [38]

   By Notice of Motion filed on 31 July 2024 Mr Jourdan seeks the following orders:

2. [39]

   Although not claimed in the Notice of Motion, at the hearing on 10 October 2024 Mr Jourdan also made a claim for dismissal of the proceedings under Uniform Civil Procedure Rules 2005 (NSW) r 13.4(1)(c). No objection was taken to the application being put on that basis.

3. [40]

   As a threshold matter, Mr Jourdan accepts that an action in debt may lie where the debt is constituted by an earlier judgment debt, as would be the case where local proceedings are brought to enforce the judgment of a foreign court. Despite the terms of his Defence, Mr Jourdan does not submit that no reasonable cause of action is disclosed in the Statement of Claim. The basis for Mr Jourdan’s dismissal application is limited to the contention that the proceedings are an abuse of process.

4. [41]

   Mr Jourdan submits that the abuse of process arises because of the time which has elapsed since the District Court Judgments were given on 20 March 2006. It is now almost 19 years. It is described by Mr Jourdan as an “inordinate delay”. He also relies upon the claims being repeatedly “revived” at the last minute, first with the filing of the current Statement of Claim (a few days before twelve years) and then with the service of the Bankruptcy Notice (shortly before a further six years).

5. [42]

   Mr Jourdan claims that the delay has caused him prejudice. He specifically refers to the amount of interest which the Plaintiffs now claim as having accumulated on the District Court Judgments over the last 19 years. The interest is calculated at the high statutory rates. To illustrate the vice in the Plaintiffs’ claim for interest, Mr Jourdan refers to HK Frost Holdings Pty Ltd (in liq) v Darvall McCutcheon [1999] FCA 795 at [11] where Finn J expressed a disinclination to permit an award of interest in the face of unreasonable delay by the plaintiff.

6. [43]

   Mr Jourdan further submits that by bringing these new proceedings the Plaintiffs will circumvent a number of time restrictions which would otherwise apply to the Plaintiffs’ claims, specifically s 17 of the Limitation Act 1969 (NSW) and s 134 of the Civil Procedure Act 2005. By each provision, a twelve year limit has been imposed which expired on 19 March 2018 for the Plaintiffs’ claims. It will be recalled that the Statement of Claim in the current proceedings was filed on 16 March 2018. Mr Jourdan submits that the Plaintiffs’ decision to commence these proceedings was made with legal advice, from which it may be inferred that the purpose of the proceedings is to avoid the time restrictions which would otherwise apply to enforcement of the District Court Judgments. Mr Shreeve admits as much in the passage from his Affidavit set out at [22] above.

7. [44]

   Mr Jourdan also refers to s 41(3)(c) of the Bankruptcy Act 1966 (Cth) which provides that a bankruptcy notice shall not be issued in relation to a judgment if a period of more than six years has elapsed since the judgment was given. The Plaintiffs ceased to be able to serve a bankruptcy notice based on the District Court Judgments on 19 March 2012. By virtue of the new proceedings, time will start to run again if new judgments are obtained.

8. [45]

   Mr Jourdan submits that the explanation given by the Plaintiffs for their inaction between March 2006 and March 2018 is vague and insufficient. He also points out that no explanation whatsoever is given for the further delay between July 2018 when the Default Judgment was obtained in these proceedings and May 2024 when the Plaintiffs caused the Bankruptcy Notice to be issued. The Plaintiffs’ Affidavits are silent when an explanation is called for.

9. [46]

   Given the delay, Mr Jourdan submits that the Plaintiffs have not conducted these proceedings in a manner consistent with the overarching purpose of the Civil Procedure Act 2005. He submits that continuation of these proceedings after so much time will bring the administration of justice into disrepute.

10. [47]

    Mr Jourdan further submits that this is not a case where dismissing the proceedings will shut the Plaintiffs out from having their claims properly heard and determined by the Court. The claims under the 2003 Deed have already been heard and determined by the District Court. The Plaintiffs have already had their day in Court. Dismissal will only affect the Plaintiffs’ ability to enforce the District Court Judgments in circumstances where the Plaintiffs themselves “have been the architect of the delays”.

Submissions of the Plaintiffs

1. [48]

   The Plaintiffs oppose the dismissal application. Citing Williams v Jones (1845) 13 M&W 628; 153 ER 262, they submit that a new action in debt may lie where the debt is constituted by an existing judgment debt. They also refer to a number of more recent cases where the cause of action has been referred to: Dennehy v Reasonable Endeavours Pty Ltd (2003) 130 FCR 494; [2003] FCAFC 158; Chohan v Times Newspapers Limited [2001] 1 WLR 184; Williams v Department of Environment & Resources Management (No 2) [2015] QLAC 1; Ogbonna, In the matter of Ogbonna [2023] FCA 1334; John Lewis Food Service Pty Ltd v Mervyn Reynolds [2014] VSCA 162.

2. [49]

   The Plaintiffs further submit that the continued existence of the cause of action is expressly recognised by s 17(1) of the Limitation Act. They accept that it is not commonly litigated but say that that does not mean that the cause of action does not exist. As stated above, Mr Jourdan accepts that the cause of action exists.

3. [50]

   The Plaintiffs also point out that Mr Jourdan never has and does not now dispute his liability under the District Court Judgments. That submission is made good by the terms of the Defence which Mr Jourdan has filed in these proceedings.

4. [51]

   On the question of delay, the Plaintiffs focus not so much on their conduct but on Mr Jourdan’s conduct. They point out that Mr Jourdan has not at any time taken any step to pay the debts which are constituted by the District Court Judgments. No explanation is given for that failure. There is no suggestion that Mr Jourdan does not understand his obligations.

5. [52]

   The Plaintiffs also criticise Mr Jourdan’s conduct of these proceedings. They submit that he has not conducted them in a manner consistent with the overarching purpose of the Civil Procedure Act 2005. In particular, they point out that the Default Judgment was obtained in July 2018 but Mr Jourdan did not take any action to have it set aside until he filed the present Notice of Motion on 31 July 2024. That submission assumes that Mr Jourdan was aware of the Default Judgment before he received the letter dated 8 May 2024. The correctness of the assumption is unclear.

6. [53]

   As for their own delay, the Plaintiffs submit that the explanation they have given for the time before these proceedings were commenced in March 2018 is fair and reasonable when viewed in the context of Mr Jourdan’s circumstances, which they describe as “on the verge of bankruptcy, overseas or peripatetic”. They also emphasise that they lacked the financial means to enforce the District Court Judgments in 2006 because of the legal costs they had to pay to enforce their rights against Mr Jourdan under the Deed.

7. [54]

   The Plaintiffs do not accept that they are guilty of any delay in the conduct of these proceedings. The Statement of Claim was filed on 16 March 2018 and they obtained a Default Judgment on 17 July 2018. Nothing, however, is said about their inactivity over the subsequent six years.

8. [55]

   In any event, the Plaintiffs submit that mere delay does not constitute an abuse of process. They draw a distinction between delay in the conduct of proceedings and delay in the enforcement of a judgment. Given that the Court is concerned about both parties getting a fair trial, they submit that delay is objectionable if it postpones a trial but not otherwise. In the current case the delay has not caused prejudice because a fair trial has already been conducted and Mr Jourdan does not dispute his liability under the resulting District Court Judgments. There is no suggestion that delay will compromise the Court’s ability to conduct a fair trial in the current proceedings. All that will be required is proof of the District Court Judgments and non-payment (both of which are admitted) and calculation of interest. The Plaintiffs draw on the principles which govern the equitable defence of laches to contend that, absent prejudice, delay is not sufficient to give rise to an abuse of process.

9. [56]

   As for the amount of interest which is claimed, the Plaintiffs submit that there is no prejudice to Mr Jourdan. He has not admitted his liability for interest and it remains open to him to argue at the final hearing that some or all of the interest ought not to be allowed because of the (not admitted) delay by the Plaintiffs.

Statutory framework for the enforcement of judgments

1. [57]

   Some of the Plaintiffs’ District Court proceedings against Mr Jourdan were commenced before the Civil Procedure Act came into operation in 2005. Under the transition provisions, the statute and the Uniform Civil Procedure Rules 2005 nonetheless apply to the issues in this case: s 6(3) and sch 6, cl 5(1).

2. [58]

   Part 8 of the Civil Procedure Act 2005 provides for the enforcement of judgments and orders. It applies to the District Court Judgments in this case. Section 103 provides:

3. [59]

   The word “judgment” is defined in s 3 in the following terms:

4. [60]

   The term “judgment debt” is defined in s 3 as follows:

5. [61]

   Section 106(1) provides:

6. [62]

   As contemplated by s 103, Parts 39 and 40 of the UCPR contain machinery provisions for the operation of the enforcement writs and orders referred to in s 106.

7. [63]

   Section 134 of the Civil Procedure Act provides:

8. [64]

   Section 138(1) provides:

9. [65]

   As referred to above, another manner in which judgments may be enforced against natural persons is by bankruptcy proceedings. There is a six year time limit for the commencement of bankruptcy proceedings. Section 41(3) of the Bankruptcy Act 1966 provides:

10. [66]

    There is no provision in the Bankruptcy Act 1966 which empowers the Court to extend the six year limit.

11. [67]

    Also relevant to the current dispute is s 17 of the Limitation Act 1969 which provides:

Summary dismissal

1. [68]

   UCPR 13.4(1) provides:

2. [69]

   The concept of abuse of process directs attention to the way in which the process of the Court is being used in the particular case. In Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536 Lord Diplock said that abuse of process:

3. [70]

   The power of the Court to dismiss proceedings as an abuse of process must be exercised with caution: Spencer v The Commonwealth (2010) 241 CLR 118 [24] (French CJ and Gummow J). The party which contends for the abuse of process must satisfy the Court that it is so.

Decision

1. [71]

   A judgment of a court pursuant to which one party is ordered to pay money to the other party creates a judgment debt. In the past it has been possible to sue on that debt in fresh proceedings. In Williams v Jones (1845) 13 M&W 628; 153 ER 262 at 264-265, Pollock CB said:

2. [72]

   Parke and Alderson BB made similar statements, each observing that the cause of action provided the means by which foreign judgments can be enforced locally.

3. [73]

   The cause of action is referred to in s 17 of the Limitation Act 1969 which is set out above. Section 17 does not create the cause of action but it does acknowledge its existence.

4. [74]

   Apart from the enforcement of foreign judgments, the original purpose of suing on a judgment debt was explained by Finkelstein J in Dennehy v Reasonable Endeavours Pty Ltd (2003) 130 FCR 494; [2003] FCAFC 158. After referring to suing on foreign judgments, Finkelstein J said at [9]:

5. [75]

   The common law difficulty with enforcing a judgment after a year and a day arose not from a rule but from a presumption that the judgment had been satisfied within a year and a day: Lowsley v Forbes [1998] 3 WLR 501 at 504 (Lord Lloyd of Berwick). However, the common law also found there to be an implied promise by the judgment debtor to pay the judgment sum, which gave rise to a contract upon which the judgment creditor could sue afresh: Kuwait Oil Tanker Company SAK v Al Bader [2008] EWHC 2432 (Comm) at [8] (Teare J). Thus, at common law, problems caused by the first fiction (the presumed payment) were addressed by a second fiction (the implied promise).

6. [76]

   To that extent, a purpose of the cause of action was to avoid restrictions on enforcement of judgments, presumably because the restriction was considered to be undesirable.

7. [77]

   Given that it is possible to sue afresh on a judgment debt, there is scope for enforcement to be pursued long after the original judgment has been obtained. Finklestein J referred to the possibility of using the procedure “continuously”. In the current case, suing on the judgment debts would allow the Plaintiffs to pursue enforcement action more than 19 years after the original judgments were obtained. Mr Jourdan submits that the current proceedings are an abuse of process simply because of that length of time.

8. [78]

   There is substance in Mr Jourdan’s criticism of the Plaintiffs’ explanation for their failure to take steps to enforce the District Court Judgments prior to March 2018. The explanation is vague and unpersuasive. The evidence to support the explanation is superficial. Even if it is accepted that the Plaintiffs had good reasons for not taking immediate enforcement action in 2006, the good reasons appear to have evaporated well before 19 March 2018. Mr Shreeve understood that Mr Jourdan had returned to live in Australia “in or about 2017”. For Ms Shreeve it was “sometime in 2017”. Yet nothing was done until March 2018. In that period of months (possibly many months), enforcement action could have been taken, although it was already too late for a bankruptcy notice. On the Plaintiffs’ own case there was lengthy inactivity for which no explanation is given.

9. [79]

   I also accept Mr Jourdan’s submission that there is no explanation for the Plaintiffs’ inaction once they obtained the Default Judgment on 17 July 2018. An additional six years of delay was allowed to occur. Mr Jourdan submits that the prejudice from this six year delay must be viewed on top of the preceding twelve year delay.

10. [80]

    However, Mr Jourdan has not identified any actual prejudice caused by the delay and certainly nothing which can be described as manifestly unfair so as to warrant the proceedings being summarily dismissed for that reason alone. There is a presumed prejudice when any trial is conducted after a lengthy delay (Brisbane South Regional Authority v Taylor (1996) 186 CLR 541 at 555 (McHugh J)), but the presumption is weak in Mr Jourdan’s case. The Plaintiffs sue on debts which will be proved by the records of the District Court. There is no room to dispute the amount of the debts. There is no dispute that the debts have not been paid. There may be factual issues about the reasonableness of the Plaintiffs’ claim for interest over more recent years. However, any such factual issues do not make this a case where a fair trial is no longer possible.

11. [81]

    Nor does Mr Jourdan’s exposure to a liability for interest over such a prolonged period qualify as prejudice. The liability to pay interest under s 101 of the Civil Procedure Act 2005 is “unless the Court orders otherwise”. As the Plaintiffs submit, it remains open to Mr Jourdan to argue at the trial that interest ought not to be allowed for any period of unreasonable delay by the Plaintiffs. In any event, the purpose of interest is to compensate the Plaintiffs for being kept out of the judgment sums. The Plaintiffs have been kept out because Mr Jourdan has not paid.

12. [82]

    Mr Jourdan also complains that he has suffered prejudice because the judgments have been repeatedly “revived” over the years. I do not accept that submission. The reason why the Plaintiffs’ claims have periodically resurfaced in Mr Jourdan’s life is that he has not paid his debts.

13. [83]

    If it were just a question of delay, the proceedings are not an abuse of process. However, there is another issue in this case.

14. [84]

    As set out above, one of the original purposes of suing afresh on a judgment debt was to avoid a time restriction on enforcing judgments.

15. [85]

    As Finkelstein J also explained at [2] in Dennehy v Reasonable Endeavours Pty Ltd, over the centuries the temporal restriction on enforcing judgments have evolved from the original common law presumption that the judgment has been satisfied in a year and a day. In New South Wales today, the temporal restriction is set out in s 134 of the Civil Procedure Act 2005. The modern restriction differs in three significant respects to the old common law presumption. First, s 134 is more liberal than the common law presumption. Under s 134 a period of twelve years is allowed for enforcement. Compared to a year and a day, this is an increase by a significant order of magnitude. It is twice as long as the six year restriction which applies in England and Wales today: RSC Order 46.2(1)(a).

16. [86]

    Secondly, the modern restriction is also more flexible than the common law position. The twelve year time limit may be extended “by leave of the court”. The Court has a discretion whether to grant leave. Section 134 does not specify the criteria by which the discretion to grant leave is to be exercised. In Page v McKensey [2009] NSWCA 127 leave was granted under s 134 for enforcement action to be taken over 13 years after the relevant judgments were given. In granting leave, the Court referred to the fact that for years prior the judgment debtors had been on notice of the upcoming application for leave.

17. [87]

    In Duer v Frazer [2001] WLR 919 at 925, Evans-Lombe J considered the position under RSC Order 46.2(1)(a), which imposes the six year limit on the issue of a writ of execution subject to the “permission of the court”. Evans-Lombe J held that permission would be given where it is “demonstrably just” to do so. Regard is to be had to the explanation for the delay in enforcing the judgment, any delay in bringing the application for permission and any prejudice to which the judgment debtor will be exposed if enforcement is now permitted. In Patel v Singh [2002] EWCA Civ 1938 at [21]-[24], Peter Gibson LJ (with whom Sir Anthony Evans agreed) said that “demonstrably just” means the presence of something to take the case out of the ordinary. By way of example, Peter Gibson LJ referred to discovery that the judgment debtor has come into wealth when previously he or she was thought to be impecunious.

18. [88]

    Another way to view the discretion in s 134 may be to recognise the similarity between the purposes of such a provision and the purposes of limitation periods under the Limitation Act 1969. Some limitation periods may be extended by the Court if it is satisfied that it is “just and reasonable” to do so: e.g. ss 60G(2) and 62A(2). The same or similar criteria may be appropriate for the exercise of the discretion under s 134.

19. [89]

    In any event, the modern temporal restriction on enforcing a judgment has an inbuilt flexibility which ought ensure that a judgment creditor will not be shut out if it is fair, reasonable or just that enforcement still be permitted in the circumstances of the particular case. To put it the other way, s 134 will only preclude enforcement where it is not fair, reasonable or just for enforcement to be permitted.

20. [90]

    Thirdly, the time restriction in s 134 arises not from a common law fiction but from an act of Parliament. Such a distinction was considered to be important in Greville v Bird (1867) 6 SCR (NSW) 253. In that case, the plaintiff obtained a judgment from the District Court and then sought to sue on the judgment in the Supreme Court, not to circumvent a time restriction on enforcement but to circumvent a restriction on the enforcement procedures which were available in the District Court. Observing that the District Court was not an old common law court but one created by statute, Faucett J said at 255:

21. [91]

    Stephen CJ gave a judgment to the same effect, saying that the plaintiff’s ability to sue on the judgment of the District Court was essentially a question of construction of the District Courts Act. The Court gave judgment for the defendant on the demurrer.

22. [92]

    The statutory construction approach was also taken by all members of the Court in Berkeley v Elderkin (1853) 1 EL&BL 805 with the result that it was held that an action did not lie for a judgment of the County Court as contrary to the intention of the statue by which the County Court was created.

23. [93]

    In Duffy v De Rozzali (1887) 8 LR 153 at 156, Darley CJ said that Greville v Bird did not establish that the Supreme Court lacked the jurisdiction to hear a suit on a judgment of the District Court “but that the statute having provided a particular remedy, the parties are confined to such remedy”.

24. [94]

    In the current case the Plaintiffs have obtained judgments from the District Court which is a creature of statute. The statutory provisions which govern enforcement of the judgments are set out in Part 8 of the Civil Procedure Act 2005. Section 138 provides that nothing in Part 8 limits the manner in which the District Court Judgments may be enforced apart from the Civil Procedure Act 2005. It follows that suing on a District Court Judgment in the Supreme Court is not precluded as a matter of statutory construction. However, regard must be had to the regime established by Parliament in Part 8 and the purposes of that regime when considering whether these proceedings are an abuse of process. As Lord Diplock said in Hunter v Chief Constable of the West Midlands Police at 729, proceedings which are not inconsistent with the literal application of the procedural rules may nonetheless be an abuse of process if they are manifestly unfair to one party or would otherwise bring the administration of justice into disrepute.

25. [95]

    Section 134 reveals the intention of Parliament that after twelve years enforcement of a judgment be subject to a grant of leave by the Court. There are a number of good reasons to have enforcement of aging judgments subject to a grant of leave. First, the grant of leave may be on terms including as to the length of the extension. If a judgment creditor is able to obtain a fresh judgment without the leave of the Court, the fresh judgment will automatically be enforceable for another twelve years. Whilst enforcement in the thirteenth year may be fair, reasonable or just in the circumstances of a particular case, an extension to 24 years may not. Secondly, the Court considering whether to grant leave may take into account whether the time restriction has previously been extended. Without a requirement for leave, there is no reason why a judgment creditor may not repeatedly commence fresh proceedings and thereby make enforcement available indefinitely.

26. [96]

    The temporal restriction on the enforcement of judgments is today very different to that which applied when the common law presumption provided a legitimate reason for permitting a judgment creditor to sue afresh on a judgment debt. With the modernisation of the restriction, it is understandable that Finkelstein J said that today the cause of action is probably obsolete. In Lowsley v Forbes [1998] 3 WLR 501 at 509, Lord Lloyd of Berwick quoted the relevant Law Reform Commission report that stated that the cause of action is “nowadays very rare indeed”. In Kuwait Oil Tanker Company SAK v Al Bader [2008] EWHC 2432 (Comm) at [8] Teare J found the existence of the cause of action “surprising”.

27. [97]

    It is one thing to permit the cause of action to be used to circumvent a common law fiction and another thing altogether to permit it to be used to circumvent a liberal regime imposed by Parliament and which in any event has inbuilt flexibility. Even in the case of the old common law presumption, Finkelstein J recognised that use of the cause of action may be an abuse of process. That conclusion may be more readily reached in the modern environment.

28. [98]

    Indeed, modern cases about suing on a judgment debt show a more restrictive approach by the Court today. There may be cases where it will still be permitted. In Bennett v Royal Bank of Scotland [2004] EWCA Civ 988, Mr and Mrs Bennett gave guarantees to secure a loan from the bank to a corporate borrower. Mrs Bennett’s guarantee was secured over real property but Mr Bennett’s guarantee was not. After default on the loan, the bank obtained a judgment against Mr and Mrs Bennett. The bank was effectively precluded from taking bankruptcy proceedings against Mr Bennett because the judgment debt was considered to be secured over Mrs Bennett’s property. For the next six and half years the bank sought to enforce the judgment against Mrs Bennett and, through her, the security. That avenue came to an unfruitful end when the House of Lords set aside Mrs Bennett’s guarantee because of the undue influence exercised over her by Mr Bennett and of which the bank had constructive knowledge. Under SCR Order 46.2(1)(a) there was a six year restriction on enforcing the judgment against Mr Bennett which had by this time expired. However, against the risk that it might lose in the House of Lords, the bank had already commenced fresh proceedings against Mr Bennett by suing on the existing judgment debt. Following the House of Lords decision, the bank served Mr Bennett with the fresh proceedings. Mr Bennett applied to have them struck out as an abuse of process. The Court considered the circumstances and found that the bank had a legitimate reason for not taking earlier enforcement action against Mr Bennett and for commencing the fresh proceedings whilst it awaited the House of Lords decision. At [24] the Court said:

29. [99]

    The fresh proceedings against Mr Bennett were held not to be an abuse of process and were allowed to continue.

30. [100]

    A different approach was taken in Kuwait Oil Tanker Company SAK v Al Bader [2008] EWHC 2432 (Comm) where the plaintiff obtained a judgment against a fraudster for US$137,323,404. The plaintiff actively sought to enforce the judgment over the following six years but the judgment debt remained largely unsatisfied. The plaintiff then commenced fresh proceedings in which it sued the defendant on the original judgment debt. The plaintiff was continuing to take enforcement action against the defendant’s more recently discovered assets in foreign jurisdictions. There was evidence that enforcement in the foreign jurisdictions might be prejudiced or delayed if the original judgment was not still “recognised” in England. Teare J held that the second proceedings were not an abuse of process. However, Teare J specifically referred to the acknowledgment by the plaintiff that it should not be permitted to circumvent the six year restriction on enforcement in RSC Order 46.2(1)(a). With that acknowledgment, Teare J did not dismiss the fresh proceedings, but stayed them until the plaintiff obtained “permission of the Court” to proceed with enforcement in accordance with RSC Order 46.2(1).

31. [101]

    In Habib Bank Ltd v Central Bank of Sudan [2014] EWHC 2288 (Comm) Burton J found that fresh proceedings commenced by the plaintiff in which it sued a judgment debtor for the original judgment debt of GBP101,881,346 were not an abuse of process because of the “enormous efforts” already made by the plaintiff to enforce. As with Kuwait Oil Tanker Company SAK v Al Bader, Burton J permitted the proceedings to continue, but on terms which required the plaintiff first to obtain permission to proceed with enforcement in accordance with RSC Order 46.2(1).

32. [102]

    These proceedings are a literal application of the procedural rules by which the Plaintiffs sue on judgment debts obtained in District Court proceedings nineteen years ago. By that literal application the Plaintiffs will be relieved of the obligation to apply to the District Court for leave to enforce as otherwise required by s 134 of the Civil Procedure Act 2005. These proceedings will therefore deprive Mr Jourdan, the Court and the public interest of the safeguards sought to be provided by the requirement for leave under s 134, which safeguards are intended by Parliament.

33. [103]

    Such an outcome would be manifestly unfair to Mr Jourdan because he will be deprived of the safeguards Parliament intends him to have. For the same reason, the outcome may otherwise bring the administration of justice into disrepute. The explanation for the delay which has brought this state of affairs about is not sufficiently substantial to warrant some other conclusion.

34. [104]

    In these circumstances, the proceedings are an abuse of the process for the purposes of UCPR 13.4(1)(c).

35. [105]

    Bankruptcy is a creature of statute, first introduced into the law by Parliament in 1542. The objective of bankruptcy legislation is that all creditors should be entitled to come in and prove, and that the bankrupt should emerge from the bankruptcy freed from all his or her liabilities: Pyramid Building Society v Terry (1997) 189 CLR 176 at 212 (Kirby J). An essential feature of a modern system of bankruptcy law is that provision is made for the discharge of the debtor from future liability for his or her existing debts: Storey v Lane (1981) 147 CLR 549 at 556 (Gibbs CJ). As Justice Stone said in Fitz-Gibbon v Inspector General in Bankruptcy [2000] FCA 1677 at [14]:

36. [106]

    Section 41 of the Bankruptcy Act 1966 does not permit a bankruptcy notice to be issued in relation to a judgment six years after the judgment was given. There is no power to extend the time, which suggests that Parliament intended there to be a strict temporal limit. A temporal limit would operate harmoniously with the objective of achieving finality in the affairs of the debtor.

37. [107]

    In Mr Jourdan’s case, the Plaintiffs have not been able to issue a bankruptcy notice since 19 March 2012. That date had long since passed when the current proceedings were commenced on 16 March 2018. If these proceedings are permitted to continue, and a fresh judgment obtained, the possibility of bankruptcy will be revived long after it ceased to be an option.

38. [108]

    It may be argued that it is an abuse of process for fresh proceedings to be brought by which a debtor is to be exposed anew to the risk of bankruptcy proceedings which have long since been closed by the bankruptcy statute. In Bennett v Royal Bank of Scotland it was said that it is not an abuse of process per se to commence fresh proceedings with the object of preserving the right to take bankruptcy proceedings. That was a case where the fresh proceedings were commenced whilst the right to take bankruptcy proceedings still existed, their object being to extend that existing right. In the current case, the Supreme Court proceedings were not commenced until six years after the Plaintiffs’ right to issue a bankruptcy notice had already expired. The revival of an expired right may be a further reason why these proceedings are an abuse of process. In view of the conclusion I have reached above, it is not necessary for this issue to be considered further.

Orders to be made

1. [109]

   In the face of the abuse of process, the question arises as to what order ought to be made by the Court. One option would be to strike out the Statement of Claim under UCPR 14.28(1)(c). The vice in the Plaintiffs’ claim is one of substance and not one of mere pleadings. There is no utility in striking out the Statement of Claim.

2. [110]

   I have considered whether the proceedings ought to be stayed in conformity with the approach taken in Kuwait Oil Tanker Company SAK v Al Bader and Habib Bank Ltd v Central Bank of Sudan. The stay would remain in place until such time as the Plaintiffs obtain a grant of leave under s 134. This is not the preferred course for two reasons. First, s 134 clearly contemplates that an application for leave will be made in the proceedings in which the judgment was given. Secondly, it is already open to the Plaintiffs to apply for leave in the previous District Court proceedings against Mr Jourdan. If such leave were properly to be given, a fresh judgment in the current proceedings would be unnecessary other than to revive the Plaintiffs’ right to issue a bankruptcy notice.

3. [111]

   The appropriate remedy is for the proceedings to be dismissed under UCPR 13.4(1)(c).

4. [112]

   In concluding that the proceedings are to be dismissed, I have considered whether the Plaintiffs will suffer prejudice by that decision. As stated above, the Plaintiffs still have the right to apply to the District Court under s 134 for an extension of time to enforce the original District Court Judgments. For the reasons given above, it may safely be concluded that leave will be forthcoming if it is demonstrably just, or just and reasonable, that the Plaintiffs still be permitted to enforce the District Court Judgments. By dismissing these proceedings, the Plaintiffs will only lose the opportunity to enforce the District Court Judgments to the extent that it is not demonstrably just, or just and reasonable that they be permitted to do so. Such a loss is not relevant prejudice for the purposes of exercising the Court’s discretion under UCPR 13.4. The Plaintiffs will also lose the opportunity to revive their right to issue a bankruptcy notice. For the reason given above, it may be doubted that that is relevant prejudice having regard to the terms of s 41 of the Bankruptcy Act 1966.

5. [113]

   In any event, I do not consider that the prejudice which the Plaintiffs will suffer as a result of these proceedings being dismissed is such as to warrant them being permitted to continue as an abuse of process.

Orders

1. [114]

   I make the following orders:

   1. (1)

      The proceedings are dismissed.

   2. (2)

      The Plaintiffs pay the defendant’s costs.