SAYER v MURRAYFIELD NOMINESS PTY LTD and ORS [1994] NSWCA 277

SAYER v MURRAYFIELD NOMINESS PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MAHONEY JA 12 December 1994

[1994] NSWCA 277

Mahoney JA This is an application which comes before the court in difficult circumstances. There has been defalcation by a solicitor, described as Jack Diamond, in amounts which I am told will exceed $10 million. A receiver has been appointed of his practice and moneys have been seized. The present application concerns moneys that were the subject of orders made by Allen J in an application that was dealt with by him.

Putting the matter very broadly and, therefore, to an extent inaccurately, it appears that an account of a company, Milonia Pty Ltd, was used by Mr Diamond, or is claimed to have been used by him, as an account into which moneys received from others for investment were paid. Those moneys were, at least as to some part of them, used for purposes for which they were never given to him to be used.

In the case here in question sums of money were received by him, ie, by the company Milonia Pty Ltd, from a trustee company, Murrayfield Nominees Pty Ltd, the moneys having been derived from a number of the persons referred to as second opponents in the proceedings. When the receiver was appointed, those moneys were recovered, and they were dealt with by the receiver by being paid into a particular bank account.

Litigation was had before Allen J in respect of the moneys. As a result of that litigation his Honour made orders (I stress I put the matters generally) declaring that those moneys were moneys as to which Murrayfield Nominees Pty Ltd and the opponents to whom I have referred had proprietary claims. These claims were claims having priority over the persons who in the ordinary course would have claims to moneys misued by Mr Diamond through Milonia Pty Ltd.