Perpetual Trustee Company Ltd v Papantoniou (No. 4) [2014] NSWSC 1607

Supreme Court New South Wales

Medium Neutral Citation: Perpetual Trustee Company Ltd v Papantoniou (No. 4) [2014] NSWSC 1607 Hearing dates: 11/11/2014 Decision date: 11 November 2014 Jurisdiction: Common Law Before: Campbell J Decision: (1)The first cross-claimant Mr Robert Brown has liberty to file a garnishee order directed to Barwick Boitano in respect of the debt due to Mrs Papantoniou in accordance with rule 39.36. That order may be entered forthwith. (2)The costs of this application are Roberts Brown's costs in the cause. Catchwords: PROCEDURE - civil - garnishee orders - where failure to pay judgment debt - application to garnish funds held on trust for judgment debtor Legislation Cited: Civil Procedure Act 2005 (NSW) Contracts Review Act 1980 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: ML Ubase Holdings Co Limited v Trigem Computer Inc (2007) 69 NSWLR 577 Category: Consequential orders Parties: Robert Joseph Patrick Brown (First Cross-Claimant) Robert Joseph Patrick Brown as executor of the Estate of the late James Anthony Thomas Brown (Third Cross-Claimant) Styliani Papantoniou (First Cross-Defendant) Representation: Counsel: M Maconachie (First and Third Cross-Claimants) Solicitors: Barwick Boitano Lawyers (First and Third Cross-Claimant) File Number(s): 2010/28341

Judgment 1By a judgment delivered on 30 May 2014 having the medium neutral citation of [2014] NSWSC 685, I gave reasons for making orders under the Contracts Review Act 1980 (NSW) in favour of Mr Robert Brown in his own right and in his capacity as the executor of the estate of the late James Brown, his brother. Those orders were made against Mrs Styliani Papantoniou, a solicitor, who acted for the Brown brothers in relation to various matters the details of which I need not descend into for present purposes. 2These reasons relating to a motion filed by Mr Robert Brown in his own right assume familiarity with my principal judgment, and also with my subsequent judgment of 10 June 2014, having the medium neutral citation of [2014] NSWSC 746. In that second judgment I revoked my previous orders and pronounced orders substantially to the same effect taking account of additional submissions and calculations made by the parties. 3Under the orders pronounced on 10 June 2014, Ms Papantoniou was required to pay Mr Robert Brown in his own right the sum of $188,408.87 inclusive of interest under s 100 of the Civil Procedure Act 2005 (NSW) as compensation under the Contracts Review Act 1980. I also ordered her to pay compensation to the estate in the sum of $131,456.59. The orders also deal with moneys held in a controlled money account formerly by the solicitors for the plaintiff in these proceedings, Perpetual Trustee Company Limited, a mortgagee, but latterly by the firm Barwick Boitano, the solicitors for Mr Brown and the estate of Robert Brown. In short, that fund represents the surplus on a mortgagee sale by Perpetual Trustee Company Limited. 4As I explain in my judgment of 30 May at [133] to [146] (especially at [136]) Mr Robert Brown was the purchaser on that mortgagee sale, by that means reclaiming his own interest as registered proprietor in the property, that of his late brother and that of Mrs Papantoniou, all as tenents-in-common. For reasons I gave at [147] I decided that Mrs Papantoniou was the person entitled to the moneys held on trust by Barwick Boitano. At the time I said that were I to direct that that sum be paid to Mr Robert Brown, "I would be effectively double-counting in his favour". I also said at [148] "although the justice of Ms Papantoniou's claim may be at best marginal, I am of the view that these moneys should be paid to her but only on condition that she provides evidence satisfactory to the trustees that she has satisfied the judgments I will make against her in this case". The marginal justice of her claim was that payment out to Mr Robert Brown in addition to the compensation I ordered would have operated as a windfall in his favour. 5On the affidavit evidence of Mr Frank John Boitano, the plaintiff's solicitor, sworn on 20 October 2014, I am satisfied that Mrs Papantoniou has not satisfied either of the judgments for compensation entered against her. 6Having regard to my decision [148], when final orders were pronounced on 10 June 2014, I made payment of the fund to Mrs Papantoniou, conditional on the trustees first being satisfied that she had paid the compensation order in each of the other claims. I also reserved liberty to apply in respect of that order and the compensation orders. 7By an amended notice of motion Mr Robert Brown has exercised that liberty to apply and he seeks payment of the controlled moneys to him either by variation of the orders I made on 10 June 2014 or by way of the issue of a garnishee order against the trustees for the debt otherwise due to Mrs Papantoniou. 8I should say that I am satisfied that it is appropriate for Mr Brown to apply in his own right. First, he personally raised the money by which he acquired the property, including securing the interest of the estate of his late brother in the property; secondly, on the evidence I heard he is the person who is beneficially entitled, I should say, to the whole of the net value of the estate of his late brother; and thirdly, I am satisfied that no other person or party has a competing claim to the payment of the funds. 9In making that third observation, I bear in mind that when the matter was before me for directions I ordered that notice of Mr Brown's application be given to Mrs Papantoniou, her former solicitors, her present solicitors, and to counsel who appeared on her behalf on the hearing, lest any of those persons would wish to assert some claim to the funds. I have read an affidavit of service on them. 10None of those parties have appeared before me today to voice any opposition to the orders sought in the amended notice of motion. The names of each of them were in the customary fashion called three times outside the Court after the matter was called on for hearing and none of them appeared. Given that all of the other parties to whom notice was given are legal practitioners, I infer that if any of them had any claim at all to assert that they considered superior to the claim of Mr Robert Brown they would have appeared before me to propound it. 11In his very careful written submissions, Mr Mark Maconachie of counsel has set out the relevant authorities, and I must say in the best traditions of the Bar he has managed to persuade me there are conceptual difficulties in varying the order I made in favour of Mrs Papantoniou on 10 June 2014. But he has also persuaded me that it is appropriate for the Court to issue a garnishee order directed to the trustees to pay to Mr Robert Brown the whole of the "debt" due to Mrs Papantoniou. 12In arriving at that decision as I have said I rely upon the affidavit of Mr Boitano sworn on 20 October 2014. That affidavit seems to substantially comply with the requirements of rule 39.35 of the Uniform Civil Procedure Rules 2005. 13Given the large amount of the outstanding judgment debts, I enquired of learned counsel whether his instructing solicitor had any notice whether a bankruptcy petition had been presented against Mrs Papantoniou. He assured me that no steps in that regard had been taken by or on behalf of his client, and that Mr Boitano had made, at some recent time, a search in the bankruptcy registry which failed to turn up any record of any petition having been presented. 14In making that enquiry, I had in mind the principle expounded by Brereton J in ML Ubase Holdings Co Limited v Trigem Computer Inc (2007) 69 NSWLR 577 at [59]. I am satisfied that in the circumstances of this case making a garnishee order in favour of Mr Robert Brown would not have the effect of giving him any preference in an imminent bankruptcy.I am satisfied there is no other matter which favours me refusing the application for a garnishee order. 15The proper approach is to give Mr Robert Brown leave to file a garnishee order directed to Barwick Boitano in the approved form in accordance with rule 39.36 which can be filed in the registry and served in accordance with the rules. 16For the reasons I have given, my order is: (1)The first cross-claimant Mr Robert Brown has liberty to file a garnishee order directed to Barwick Boitano in respect of the debt due to Mrs Papantoniou in accordance with rule 39.36. That order may be entered forthwith. (2)The costs of this application are Roberts Brown's costs in the cause.