Supreme Court New South Wales Medium Neutral Citation: National Australia Bank Ltd; Application of Gilder [2011] NSWSC 1227 Hearing dates: 22 September 2011 Decision date: 22 September 2011 Jurisdiction: Equity Division - Duty List Before: Rein J Decision: See [6] 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 Cases Cited: Avco Financial Services Ltd v Commonwealth Bank (1989) 17 NSWLR 679 Commonwealth Bank of Australia v the Estate of the late Mahmoud Slieman [2010] NSWSC 661 Category: Principal judgment Parties: National Australia Bank Ltd (plaintiff) Melanie Katrina Gilder (applicant) Richard Albarran (first respondent) Dominic Calbretta (second respondent) Fairfax Media Ltd (third respondent) Leanne Crouch (fourth respondent) Coastal Tipper Hire Pty Ltd (fifth respondent) Yakka Pty Ltd (sixth respondent) Edward Gilder (seventh respondent) Representation: C Bannan (applicant) M McNally (trustee of the bankrupt estate of the seventh respondent - also mentions the appearance of the third respondent) J Merkel (fifth respondent) Reimer Winter Williamson (applicant) Aston Reid Lawyers (third respondent) Morgan Conley Solicitors (fifth respondent) Lobban McNally Lawyers (trustee in bankruptcy of the seventh respondent) File Number(s): SC 2011/380889 EX TEMPORE Judgment 1In this matter, funds have been paid into Court some time ago by National Australia Bank Ltd following the sale of a property mortgaged to the bank by Mr And Mrs Gilder. The net proceeds paid into court are $75,607. There are a number of possible claimants on the fund identified as Mrs Melanie Gilder, Mr Edward Gilder and a number of creditors. Those creditors are, in fact, creditors of Mr Gilder, it being accepted that Mrs Gilder has not pledged her interest in the property to these third parties. 2The matter was called in and outside Court today and the following parties have not appeared: Mr Richard Albarran, Mr Dominic Calbretta and Yakka Pty Ltd. The remaining parties who have been identified as affected by the orders sought are Fairfax Media Ltd ( "Fairfax Media" ), its appearance today was mentioned by Mr McNally who appears on behalf of the trustee in bankruptcy of Mr Gilder; and Coastal Tipper Hire Pty Ltd ( "Coastal Tipper Hire" ) which is represented today by Ms Merkel of counsel. Ms Merkel identified Miss Leanne Crouch, another person mentioned as one of the persons affected by the orders, as being in the same interest as Coastal Tipper Hire. 3The trustee in bankruptcy does not oppose the payment out of money to Mrs Gilder, and Fairfax Media and Coastal Tipper Hire consent to the payment out. Mr Bannan, who appears on behalf of Mrs Gilder, has drawn my attention firstly, to the most recent decision in this area which is that of Slattery J in Commonwealth Bank of Australia v the Estate of the late Mahmoud Slieman [2010] NSWSC 661 in which his Honour, at [8]-[11], reiterated the matters that need to be established by a party making a claim on a fund. These various matters have been previously identified in a decision of long standing of Young CJ in Equity, as his Honour then was, in Avco Financial Services Ltd v Commonwealth Bank (1989) 17 NSWLR 679. In this case there can be no doubt about Mrs Gilder's entitlement as she, with her husband, was a joint tenant of the property. The only questions are firstly whether any claims are made on the fund by others which take priority; and secondly there is an issue about precise status of the ownership of those funds. 4As Mr Bannan has pointed out, the appointment of the trustee in bankruptcy to Mr Gilder's interests in the property which was held as joint tenant with Mrs Gilder served to sever the joint tenancy. It follows, I accept, that the funds produced by the sale would also be held as tenants in common which means that the trustee in bankruptcy would be entitled to Mr Gilder's share of the proceeds and Mrs Gilder would be entitled to 50% of the net proceeds after payment of the mortgage debt and costs of sale. Accordingly, given the absence of any claims made against Mrs Gilder in relation to various debts incurred by Mr Gilder, Mrs Gilder is entitled to 50% of the net proceeds paid into Court and any interest which has accrued thereon. 5A second matter which must be satisfied is that the party is not merely an unsecured creditor - that does not present any difficulty here. The third matter is that it is necessary to establish all the other potential claimants on the fund have been notified. The affidavit of Mr Matthew Moyes dated 21 September 2011 sets out extensive efforts made by Mr Moyes to notify all the parties both of the application and of the adjourned hearing date. I am satisfied therefore that Mrs Gilder is entitled to funds, being 50% of the monies paid into Court. 6I direct that the Court pay to Mrs Gilder, on the direction of her solicitor, 50% of the amount paid into Court by National Australia Bank Ltd on 29 November 2010 including any interest which was accrued, by arrangement with the Registry at any time from and including tomorrow, 23 September 2011. I note that there is likely to be an application by the trustee in bankruptcy for the payment out of the balance at least on some interim basis. That has not been formulated yet and accordingly no relief is sought at the moment. ********** 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: 18 October 2011