New South Wales Supreme Court CITATION : ANZ v Maunder & Anor [2009] NSWSC 1356 HEARING DATE(S) : 27 November 2009 JUDGMENT DATE : 27 November 2009 JURISDICTION : Equity JUDGMENT OF : Slattery J at 1 EX TEMPORE JUDGMENT DATE : 27 November 2009 ORDERS: 1 The first named defendant, namely Rebel Lisa Maunder, be amended to "the trustee of the property of Rebel Lisa Maunder, a bankrupt". DECISION : 2 The Registrar of the Supreme Court to pay from monies already paid into Court, the sum of $39,246.55 together with 50% of any interest accrued on the monies previously paid into Court, to James Alexander Shaw, the trustee of the property of Rebel Lisa Maunder, a bankrupt, care of the First Applicant's solicitors. 3 The Registrar of the Supreme Court to pay from monies already paid into Court, the sum of $39,246.55 together with 50% of any interest accrued on the monies previously paid into Court, to Bradley Darrell Maunder, care of [address not published]. 4 Each party to pay their own costs of the motion. 5 These orders may be entered forthwith. CATCHWORDS : EQUITY - equitable remedies - mortgagee exercised power of sale - surplus proceeds of sale paid into Court - motion for payment out of court - whether applicant entitled to funds - whether any competing claimants - whether all interested parties served - calculation of interest Trustee Act 1925 (NSW) Part 4 LEGISLATION CITED : Bankruptcy Act 1966 (Cth) s 134(1)(d) Real Property Act 1900 (NSW) s 58(3) Uniform Civil Procedure Rules 2005 (NSW) r 19.2 CATEGORY : Principal judgment CASES CITED : Adams v Bank of New South Wales [1984] 1 NSWLR 285 Avco v Financial Services Limited v Commonwealth Bank of Australia (1989) 117 NSWLR 679 Plaintiff: Australian and New Zealand Banking Group Limited PARTIES : First Defendant: The Trustee of the Property of Rebel Lisa Maunder, a Bankrupt Second Defendant: Bradley Darrell Maunder FILE NUMBER(S) : SC 3375/07 Plaintiff: No appearance COUNSEL : First Defendant: Mr G Smith Second Defendant: No appearance Plaintiff: No appearance SOLICITORS : First Defendant: Trisley Lawyers Second Defendant: No appearance IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY LIST SLATTERY J FRIDAY 27 NOVEMBER 2009 3375/07 AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED v THE TRUSTEE OF THE PROPERTY OF REBEL LISA MAUNDER, A BANKRUPT & BRADLEY DARRELL MAUNDER JUDGMENT 1 HIS HONOUR: Introduction 2 In June 2007 the ANZ Bank exercised a power of sale as mortgagee of land at Pindari Road, Forster. The surplus from that sale was paid by the bank into Court. After the mortgage debt was subtracted from the proceeds of sale a balance remained of $78,493.09. The bank, as plaintiff, paid that sum into Court pursuant to Part 4 of the Trustee Act 1925 (NSW). The funds have remained in Court since 28 June 2007. They were not claimed by either of the owners of the property for some two years. 3 In this judgment I will not give the precise address of the property or of any person in conformity with the Court's policy of avoiding the risk of identity fraud through its published judgments. The property will be referred to throughout this judgment as "the Forster property". At the time it was sold the registered proprietors of the Forster property were the defendants Rebel Lisa Maunder and Bradley Darrell Maunder. 4 The funds in Court came to attention upon the bankruptcy of the first defendant, Rebel Lisa Maunder on 23 June 2009. James Alexander Shaw was appointed her trustee in bankruptcy. 5 The trustee first asks the Court, as a preliminary procedural step to make orders today in the Equity Duty List to alter the title of proceedings to record that he is the trustee of the estate of Rebel Lisa Maunder. Pursuant to s 134(1)(d) Bankruptcy Act 1966 (Cth) and r 19.2 Uniform Civil Procedure Rules 2005 (NSW), I will make order 1 of the motion amending the name of the first defendant to "the trustee of the property of Rebel Lisa Maunder, the bankrupt". The Issues 6 The substantive issue before the Court today is the trustee's motion for the payment of the funds out of Court pursuant to s 98 Trustee Act. On behalf of the estate of Rebel Lisa Maunder, the trustee seeks orders directing the Registrar of the Supreme Court to pay to him the sum of $39,256.95 from the funds in Court, and for the same amount to be paid to Mr Maunder. 7 It is necessary before such an order can be made for an applicant to demonstrate a number of matters. These matters are discussed in Avco v Financial Services Limited v Commonwealth Bank of Australia (1989) 117 NSWLR 679. 8 First the applicant must demonstrate an entitlement to the funds. Second, the applicant must show that there are no competing claimants to the funds which would prevent payment out to the applicant. Third, where other claimants may be affected, the applicant must show that he has notified those other claimants. Finally the applicant must calculate or provide a formula for the calculation of the amount to be paid out of Court. I will deal with each of these matters in turn. Grounds for Payment Out Established 9 The trustee has demonstrated his entitlement to the funds in Court. The plaintiff acted as mortgagee in possession of the Forster property. Rebel Lisa Maunder and Bradley Darrell were its registered proprietors at the time of sale. This is confirmed by the trustee, by the form of transfer of the property to them as registered proprietors in April 2001 and by a title search on the Forster property performed on 29 October 2009. 10 Messrs Kemp Strang, solicitors, acted for the ANZ Bank on the sale. In a letter of 14 November 2009, the ANZ Bank informed the trustee that the proceeds of sale of about $314,000 were distributed to the ANZ Bank and other parties, leaving the balance of $78,493.09 to be paid into Court. The full detail of this accounting are not relevant to this application. 11 In the absence of other successful claimants the registered proprietors of the Forster property are entitled to the funds in Court. Were the funds not paid into Court, the ANZ Bank would hold those funds as trustees for the registered proprietors: section 58(3) Real Property Act 1900 (NSW) and Adams v Bank of New South Wales [1984] 1 NSWLR 285, at 295F and 299B per Hutley JA. That trust relationship permits the ANZ Bank to use Pt 4 of the Trustee Act to pay the funds into Court. 12 The second matter that the applicant must establish is that there are no competing claimants. A common source of information about the identity of competing claimants is the certificate of title itself. A search of the certificate of title in this case shows at the time that the power of sale was exercised that there was only one mortgage on title, the ANZ mortgage. There were no other caveats on the Forster property at the time. There are no obvious competing claimants in equity to the funds in Court. If there were they would be unregistered interests. The conclusion that there are no other competing claimants is strengthened by the lack of evidence of any other claim being made on the funds in the more than two years they have been in Court. 13 The trustee has also demonstrated the third matter, service upon the persons affected by these orders. The trustee served the other joint tenant, Mr Maunder, as is demonstrated by the affidavit of service of Bernadette Hennessy dated 12 November 2009. The trustee served the ANZ Bank care of its solicitor, Kemp Strang as is demonstrated by the affidavit of service of Raoul Court dated 18 November 2009. The ANZ Bank has appeared in the proceedings. The bank states in its notice of appearance dated 17 November 2009 that it consents to the making of the orders sought in the notice of motion filed, apart from any orders in relation to costs. No costs orders are sought against the bank. 14 Service of the motion and of substantive affidavits in the proceedings on one Lesley Colleen Kemp has also been established. I am told from the bar table that Lesley Colleen Kemp was a guarantor of the ANZ Bank's mortgage over the Forster property. For more abundant caution, the trustee served proceedings upon her. The bank now having been paid out her interests are unlikely to be adversely affected by this application. Interest 15 The last remaining matter is the question of calculating the amount to be paid out. I am assisted in this by the correspondence that has taken place between Mr Trisley, the solicitor acting for the trustee, and Mr Maunder. That correspondence indicates that on 27 October 2009, an agreement about the distribution of the funds in Court was made between Mr Maunder and Mr Trisley on behalf of the bankrupt estate of Rebel Lisa Maunder. The agreement was that the funds in Court, namely, $78,493.09 plus interest should be divided so as to give fifty per cent to the trustee Mr Shaw and fifty per cent to Mr Maunder. In this correspondence Mr Maunder requested that his share to be paid from the Supreme Court directly to himself, giving his address at Willow Tree, New South Wales. The agreement also defines the amount to be paid out to each party as fifty per cent of the $78,493.09 in Court and fifty per cent of any increase due to the accrual of interest. 16 I have pointed out to counsel for the trustee that there is a difficulty with the precise form in which orders 2 and 3 in the motion seek the payment out of $39,246.95 to each of the trustee and Mr Maunder. Apart from a small forty cent error in the calculation of half of the amount paid into Court, the orders sought in the motion do not deal with any interest on the funds accrued during the last two years. This may be quite a substantial sum. 17 Orders should be made today on the basis of the payment out to the trustee and to Mr Maunder of $39,246.55 each plus interest on that sum up to today, provided the interest can be calculated now. Alternatively, if the interest cannot be calculated today, the funds in Court can be paid out in accordance with a calculation later undertaken by the Registry. It is now just before lunch time. If a calculation of interest up to today becomes available, I will make orders this afternoon which will provide for payment out of Court of the exact sum of interest. With a view to a precise calculation being done I will adjourn the matter until later this afternoon. I direct the applicant to make inquiries about the calculation of interest and to bring in short minutes of order this afternoon to give effect to this judgment. Later in the Afternoon 18 It is now about 3.30pm. I understand from what I have been told from the bar table that the Registry has not at short notice been able to provide a final interest calculation up to today. In those circumstances I will make orders that will provide for the future calculation of interest. I make the following orders set out in the short minutes of order provided to the Court: 1 The first named defendant, namely Rebel Lisa Maunder, be amended to "the trustee of the property of Rebel Lisa Maunder, a bankrupt". 2 The Registrar of the Supreme Court to pay from monies already paid into Court, the sum of $39,246.55 together with 50% of any interest accrued on the monies previously paid into Court, to James Alexander Shaw, the trustee of the property of Rebel Lisa Maunder, a bankrupt, care of the First Applicant's solicitors. 3 The Registrar of the Supreme Court to pay from monies already paid into Court, the sum of $39,246.55 together with 50% of any interest accrued on the monies previously paid into Court, to Bradley Darrell Maunder, care of [address not published]. 4 Each party to pay his own costs of the motion. 5 These orders may be entered forthwith. ********** 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.