Supreme Court New South Wales Medium Neutral Citation: In the matter of Westpac Banking Corporation [2023] NSWSC 170 Hearing dates: 27 – 28 February 2023 Date of orders: 1 March 2023 Decision date: 01 March 2023 Jurisdiction: Equity Before: Richmond J Decision: Orders made for payment of money out of court. Catchwords: PROCEDURE — funds paid into Court under Trustee Act 1925 (NSW) Pt 4 —Application for payment out of court Legislation Cited: Trustee Act 1925 (NSW) Pt 4 Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614; [1936] HCA 12 La Trobe Capital [2009] NSWSC 1118 Category: Procedural rulings Parties: Westpac Banking Corporation (Plaintiff) Zohre Hasgul (Applicant/Interested Party) Representation: Counsel: Mr RD Turnbull (Applicant/Interested Party) Solicitors: Abbas Jacobs (Applicant/Interested Party) File Number(s): 2021/322068 JUDGMENT 1. Before the Court is a Notice of Motion dated 16 August 2022, seeking an order for payment out of moneys held in Court. The moneys were originally paid into Court on 15 November 2021 pursuant to s 95 of the Trustee Act 1925 (NSW), being surplus funds from the sale by the mortgagee, Westpac Banking Corporation, of land at Chester Hill, New South Wales (the property). Interest has accrued since that time with the total presently being $230,847.29. 2. The substantive relief sought in the Notice of Motion is: 2. On the application of Zohre Hasgul, the funds paid into court be transferred to the trust account of Abbas Jacobs Lawyers and distributed in accordance with the agreement between Zohre Hasgul and Okan Hasgul dated 6 October 2021. 1. The applicant on the Notice of Motion is Ms Zohre Hasgul, who is the former wife of the former registered proprietor of the property, Mr Okan Hasgul. The property was the matrimonial home. Mr Hasgul had given a registered first mortgage over the property to Westpac Banking Corporation for a loan made by it to Mr Hasgul. Following his default, the Bank exercised its power of sale under the mortgage and the property was sold in June 2020. 2. After payment of the mortgage debt and the costs and expenses associated with the sale, the Bank's solicitors, Thomson Geer, held $227,773.05 in their trust account. 3. Prior to the sale of the property, Ms Hasgul registered a caveat in respect of the property, but agreed to withdraw it to enable the sale to occur on condition that surplus funds from the sale would remain in the trust account of Thomson Geer, until the parties had settled their family law dispute. The Bank did not agree to that course and instead paid the money into Court in November 2021 in these proceedings commenced by a summons filed under r 55.9 of the Uniform Civil Procedure Rules 2005 (NSW). 4. Ms Hasgul and Mr Hasgul were married in 2009 and had two children before they separated in 2018. They are now divorced. The children are now 10 and 12 years of age. No orders were made in the Federal Circuit and Family Court of Australia regarding the property of the marriage. 5. Mr Hasgul left Australia in late 2020 or early 2021, and has since that time been residing in Turkey. During 2021, Ms Hasgul and Mr Hasgul had discussions regarding the treatment of the surplus funds following the sale by the mortgagee. These discussions ultimately lead to an agreement being entered into on 6 October 2021 between Ms Hasgul and Mr Hasgul in the following terms (the Agreement): (i) The proceeds of sale of the matrimonial home (held in the trust account of Thomson Geer Lawyers) are to be transferred to the trust account of the Wife's solicitors, Abbas Jacobs Lawyers. (ii) The wife is to open bank accounts in the name of the children. (iii) The monies, less the legal fees disclosed to the wife and cost (sic) the wife has incurred, are to be transferred in equal amounts to each bank account of the children. 1. On 16 August 2022, Ms Hasgul's solicitor sent an email to Mr H Sayan, who was then acting as solicitor for Mr Hasgul, asking for confirmation that he held instructions to accept service on behalf of Mr Hasgul in respect of Ms Hasgul's Notice of Motion and supporting affidavit. Mr Sayan confirmed this by email on 17 August 2022 following which Ms Hasgul's solicitor sent him by way of service, copies of the Notice of Motion and two supporting affidavits. The covering email made clear that the Notice of Motion was seeking an order for the funds held in Court to be released to Ms Hasgul in accordance with the Agreement and proposed that this would be done by consent orders signed by Mr Hasgul and Ms Hasgul. 2. On 25 August 2022, Ms Hasgul's solicitor sent to Mr Sayan proposed consent orders allowing for the funds in Court to be transferred to her. Mr Sayan responded on 29 August 2022 that he was no longer acting in the matter, as Mr Hasgul was not giving any further instructions. 3. It appears that there were no further communications between Ms Hasgul and Mr Hasgul until 6 February 2023, when Ms Hasgul's solicitor sent an email to Mr Hasgul, using an email address which Mr Hasgul had previously provided to Ms Hasgul, again enclosing by way of service copies of the Notice of Motion and supporting affidavits and stating that the matter was listed before this Court on 28 February 2023. On the same day, Ms Hasgul's solicitor sent to Mr Hasgul a WhatsApp message to Mr Hasgul's mobile phone number, informing him that the email had been sent. Mr Hasgul's mobile phone number is known to Ms Hasgul because he uses it to speak to her and their children. On 24 February 2023 another email was sent to Mr Hasgul enclosing the same documents as the earlier email of 6 February 2023 but drawing his attention to the fact that the matter was listed before this Court on 27 February 2023. 4. I am satisfied that Ms Hasgul has received more than adequate notice of these proceedings and the nature of the claim which Ms Hasgul brings. The matter was listed on both 27 and 28 February 2023 and Mr Hasgul did not appear when the matter was called on both days. 5. The application is brought pursuant to r 55.11 of the Uniform Civil Procedure Rules 2005 (NSW). In La Trobe Capital [2009] NSWSC 1118, Slattery J identified three matters which an applicant under that provision must establish in order to justify an order for payment of moneys out of Court. The first is to identify the person who is the registered proprietor of the property which has been sold. It is clear on the evidence that this is Mr Hasgul. 6. Second, the applicant must establish that it is not merely an unsecured creditor in respect of the fund, but has a proprietary interest in it. In my view this requirement is satisfied by the Agreement. The subject matter of the Agreement is equitable property, being the beneficial interest of Mr Hasgul in the moneys which were then held in the trust account of Thomson Geer who were the solicitors for the Bank. It is sufficient for an equitable assignment of such property that the assignor expresses "an immediate intention to make over to the persons intended to benefit the equitable interest vested in the donor, or some lesser interest carved out of it": Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 at 622; [1936] HCA 12. Here the words "are to be transferred" in cl (i) and (iii) make clear that intention, and the persons intended to benefit are Ms Hasgul (to the extent of her legal fees and costs) and as to the balance, she takes as trustee for her children (in whose favour she is to open bank accounts into which she is required to deposit the balance, in equal shares). Ms Hasgul therefore has a proprietary interest in the entire fund, to meet her own legal fees and costs and as to the balance in her capacity as trustee for her two children. 7. Third, it is necessary for the applicant to prove who are the other potential claimants against the fund in Court and to prove that those persons have been notified of the claim. I am satisfied on the evidence that the only other potential claimant is Mr Hasgul and that he has been given proper notice of the payment out of Court pursuant to the Notice of Motion. In particular, the evidence establishes that the only persons who have previously claimed a proprietary interest in the property apart from the mortgagee are Mr Hasgul and Ms Hasgul. Westpac Banking Corporation, the plaintiff, informed the court that it would be taking no active part in the proceedings following the payment of funds into court and it was excused from making an appearance on 27 and 28 February 2023, when this application was heard. 8. In the circumstances, I am satisfied that I should make an order for payment out under r 55.11 including accrued interest, as sought by the applicant. 9. I make the following orders: 1. Zohre Hasgul be joined as a defendant to these proceedings. 2. The whole of the funds paid into court by the plaintiff together with any interest be paid out to the trust account of Abbas Jacobs Lawyers for distribution in accordance with the agreement between Zohre Hasgul and Okan Hasgul dated 6 October 2021. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 March 2023