Australian Consulting Engineers Pty Limited v Mistrina Pty Limited (in liq)
[2021] NSWSC 449
•30 April 2021
Supreme Court
New South Wales
Medium Neutral Citation: Australian Consulting Engineers Pty Limited v Mistrina Pty Limited (in liq) [2021] NSWSC 449 Hearing dates: 27 April 2021 Date of orders: 30 April 2021 Decision date: 30 April 2021 Jurisdiction: Equity - Technology and Construction List Before: Stevenson J Decision: Retain part of the funds in Court pending proceedings commenced by the appellants against their judgment creditor; remaining funds to be paid out to the appellants
Catchwords: PRACTICE AND PROCEDURE – funds in Court – interpleader – motion remitted from Court of Appeal – whether funds should be paid out to successful appellants – where garnishee order made directed to respondent – whether part of funds should remain in court pending proceedings commenced by appellants against judgment creditor
Cases Cited: Mistrina Pty Ltd v Australian Consulting Engineers Pty Ltd [2020] NSWCA 223
Category: Procedural rulings Parties: Australian Consulting Engineers Pty Ltd (Plaintiff/Applicant)
Mistrina Pty Ltd (in liq) (Defendant/First Respondent)
Sikos (deceased) Estate of Elias (Second Respondent)
TBPL1 Pty Ltd (Third Respondent)Representation: Counsel:
Solicitors:
T Marskell (Plaintiff/Applicant)
M Christie SC with D Hume and R Thrift (Defendant/First and Second Respondents)
P W Gray SC (Third Respondent)
Wotton+Kearney (Plaintiff/Applicant)
Gillis Delaney Lawyers (Defendant/First and Second Respondents)
Mason Parkes Lawyers (Third Respondents)
File Number(s): 2021/87516
Judgment
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On 8 October 2020, the Court of Appeal, following delivery of reasons on 24 September 2020,[1] entered judgments (the “2020 Judgments”) in these proceedings against Australian Consulting Engineers Pty Limited (“ACE”) in favour of:
Mistrina Pty Ltd (in liq) (“Mistrina”) in the sum of $3,560,642.83; and
the Estate of Elias Sikos (deceased) (“the Sikos Estate”) in the sum of $1,736,664.36.
1. Mistrina Pty Ltd v Australian Consulting Engineers Pty Ltd [2020] NSWCA 223.
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The total amount of these judgments is $5,297,307.19 (“the Judgment Sum”).
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On 3 November 2020, the Court of Appeal ordered that the Judgment Sum be paid into court “until a further order is made directing payment of the judgment sum out of Court”.
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That order was made pending an application by ACE for special leave to appeal to the High Court of Australia against the decision of the Court of Appeal that led to the judgments.
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ACE paid the Judgment Sum into court on 10 November 2020.
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On 11 March 2021, the High Court refused to grant ACE special leave to appeal against the Court of Appeal’s decision.
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Now, by Notice of Motion filed on 16 March 2021, ACE seeks orders concerning the payment out of court of the Judgment Sum. In effect, ACE’s application is by way of interpleader, as it claims no entitlement to the funds in court.
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On the face of it, and all other things being equal, the funds in court represent money owing by ACE to Mistrina and the Sikos Estate and should be paid out to those parties in accordance with the 2020 Judgments.
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However, on 13 October 2020, TPBL1 Pty Ltd (“TBPL1”), which was not involved in the proceedings before the Court of Appeal, served on ACE a garnishee order based on a judgment it obtained against Mistrina and Mr Sikos over 10 years ago, on 5 November 2010 (“the 2010 Judgment”).
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Because Mistrina was in liquidation, the garnishee order was only sought in respect of monies owing to TBPL1 by the Sikos Estate although, in fact, the Garnishee Order was directed to both Mistrina and the Sikos Estate.
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It was not suggested before me that anything turns on this error.
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The evidence before me is that the amount owing to TPBL1 by the Sikos Estate under the 2010 Judgment is, as at 27 April 2021, $1,467,847.27.
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On 26 March 2021, Mistrina and the Sikos Estate commenced proceedings in the Technology and Construction List seeking, in effect, to set aside the 2010 Judgment on various bases (the “New Proceedings”).
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The New Proceedings are listed for directions on 7 May 2021.
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Before me, Mr Gray SC, who appeared for TPBL1, foreshadowed that TPBL1 will seek to have the new proceedings stayed or dismissed on various bases, and will also seek security for costs.
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Mr Gray submitted that Mistrina and the Sikos Estate are both insolvent and that the only funds available to TPBL1 to satisfy its entitlements under the 2010 Judgment are the funds in court.
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The matter in dispute is what part of the funds should be retained in court pending resolution of the New Proceedings.
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It is common ground, between Mistrina and the Sikos Estate on the one hand and TPBL1 on the other, that at least the amount currently owing under the 2010 Judgment should be so retained.
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The Mistrina parties also agree that an additional amount representing a further three months interest on the 2010 Judgment, at court rates, should be retained. It is agreed this figure is $11,840.77.
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TPBL1 contends that a greater amount be retained.
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Thus, Mr Gray submitted that at least $1,736,664.36 (being the amount of the judgment that the Sikos Estate has against ACE) should be so retained. However, that this amount is owing by ACE to the Sikos Estate does not appear to me to have any relevance to the amount owing to TPBL1 by Sikos Estate.
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Second, Mr Gray submitted that an amount should be retained in court on account of the costs TPBL1 will incur in the New Proceedings.
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As TPBL1 is now facing a challenge to a judgment it obtained over 10 years ago, it ought to be protected in relation to the interest that will accrue on its judgment while that challenge is underway. For that reason, the amount to be retained in court should include an amount referable to more than the three months of interest proposed by Mistrina and the Sikos Estate.
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If Mistrina and the Sikos Estate are insolvent, TPBL1’s position can be protected by the making of an appropriate order for security for costs in the New Proceedings.
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Otherwise, there is no dispute that the funds in court should be paid out to Mistrina and the Sikos Estate in satisfaction or partial satisfaction of their entitlements under the 2020 Judgments.
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The amount to be retained in Court should equal the amount presently owing under the 2010 Judgment, together with an amount equal to six months’ interest. The parties agree that figure is $23,944.67.
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The Court will make directions in the New Proceedings to ensure that the challenge to the 2010 Judgment is determined within that time.
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I will make orders to the effect proposed by Mistrina and the Sikos Estate, save that the figures in those proposed orders should be adjusted to accommodate the matter at [26] above.
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The parties should confer and agree on the form of those orders.
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I will also receive submissions as to what should be done now in relation to ACE’s Notice of Motion of 16 March 2021 and as to the costs of that motion. The parties should confer and agree on a timetable for short written submissions about those matters. I will deal with these matters on the papers.
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Endnote
Decision last updated: 30 April 2021
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