Bannister v Healey (No 2)

[2013] QDC 229

[2013] QDC 229

DISTRICT COURT OF QUEENSLAND

CIVIL JURISDICTION

JUDGE ROBIN QC

No 3805 of 2011

NIKKI BANNISTER  Plaintiff

and

DENNIS ALLAN HEALEY and ANOTHER               Defendant

BRISBANE

2.22 PM, THURSDAY, 23 MAY 2013

JUDGMENT

CATCHWORDS

Extension of freezing order - unsuccessful application by added joint defendant who had undertaken joint liability with the original defendant (now bankrupt) to be removed as a party and from the freezing order

HIS HONOUR:   What is before the court is an underlying application for a freezing order in respect of assets of the defendant in the proceeding, Mr Healey.  He's suffered a judgment at the suit of the plaintiff pursuant to her claim of having been injured in a boating accident on the Broadwater at Southport on 21 March 2009. 

He failed to enter a notice of intention defend or take any steps to protect his interests and on 18 November 2011 default judgment was entered against him.  Judge Farr undertook the task of assessing damages and on 31 August 2012 judgment was entered against Mr Healey for $364,112.88. 

The plaintiff and her legal advisors became concerned around this time when the vessel, which was known as "Two Up" was sold for $497,500 according to the chronology of events set out in the outline of argument produced on behalf of the plaintiff/applicant which leave to read and file which should be given.  That sale is said to have been effected by Ann Lindeblad on behalf of Mr Healey.  The funds are said to have been deposited with Suncorp bank. 

It's said that on or about 10 September 2012 the second respondent used funds from the sale to purchase another vessel,"Nitro".  The upshot was the making of an interim freezing order by Judge Kingham on 25 September 2012.  That order caused change in the title of proceeding from Bannister v Healey as plaintiff and defendant to them as applicant and respondent with three third parties, there being named, the first of them, Ann Lindeblad.  The respondent's assets made subject to a freezing order expressly included the "Two Up";  "or if it has been sold the net proceeds from the sale."

Paragraph 10 of the order in terms demanded that all three third parties  "not remove from Queensland or in any way dispose of, do with or diminish the value of the property known as 'Two Up' or if it has been sold the net proceeds of sale."

This expansion of the cast of characters in the proceeding was required by rule 31 to  "name as respondent any party whose interests may be affected by the granting of the relief sought."
It appears to have been a failure to appreciate what rule 31 required that led to the title of the proceeding changing to what I have set out. 

The plaintiff and her legal team and those on the other side have to a considerable extent acted cooperatively in seeking to have current court orders in terms appropriate to the changing situation.  Judge Kingham's order has been varied over the months on the days when it came before the court for purposes of being extended.  The original order had effect only up until 11 October 2012. 

Judge Kingham on that day presided in a process that led to the first set of changes.  They extended the effect of the changed order to 25 October 2012 and deleted from the heading any reference to third parties restoring the appellations, “plaintiff” and “defendant” to the original parties and adopting that terminology generally.  The practice in orders of this kind in her Honour's order, as in the original one was

provision that anyone ‑ notified of it might apply to the court at any time to vary or discharge the order or so much as has affected the person served or notified. 

Undoubtedly his Honour's order affected Ann Lindeblad, first, in respect to which that says in paragraph 8 to the effect that all accounts held in the name of Ann Lindeblad  by Suncorp bank will continue to be frozen until further order of this court.  Her name was inserted by his Honour in lieu of the description "or first third party" with the capitals "FTP". 

By paragraph 11 she, being named in a similar way, was enjoined from removing from Queensland or in any way disposing of, dealing with or diminishing the value of "Nitro".  Exceptions were set out in the order, including an ability on her part to withdraw up to $10,000 from the Suncorp account for payment to legal advisors and weekly amounts of $1200 for her and Mr Healey to live on. 

The proceeding entitled, as Judge McGill required, was before Judge Jones on 25 October 2012 when an extension was ordered until 22 November 2012.  Ann Lindeblad by paragraph 7(a) had all her Suncorp bank accounts confirmed frozen and the injunction mentioned was continued. 

She was directed by paragraph 8(b) to inform the plaintiff in writing of all her assets in Australia, giving the value, location and details to the extent of her interest in them.  Further directions were given in that regard; the ability to draw limited weekly sums was confirmed. 

On 22 November the matter was before Judge Samios.  His order extended the current one to 29 January 2013 and fixed a further hearing for that date; paragraphs 7, 8 and 10 remain as they have been.  On that day additional provisions were made that the matter be transferred to the civil list for trial, the statement of claim be delivered before 14 December 2012 and, importantly, that Ann Lindeblad be joined as second defendant, defences to be delivered on or before 24 December 2012 and disclosure completed by 18 January 2013. 

The provision that the freezing order would cease to have effect if the defendant paid into court an amount of some $464,000 continued;  that being the quantification of the aggregate of judgment moneys and costs that the plaintiff was entitled to. 

I was the judge on 29 January 2013 when the freeze was extended with appropriate variations by consent.  The anticipation was that funds could be borrowed against "Nitro" within a couple of months to enable satisfaction of the defendant's obligations.  By that time the title of the proceeding showed both Mr Healey and Ann Lindeblad as defendants.  There had been an important change in consequence of a mediation conducted by Mr Munro of counsel on 13 December 2012. 

That was successful from the point of view of Mr Healey in reducing his obligation so far as the plaintiff's ability to enforce entitlements was concerned to an amount of

$300,000.  $225,000 was to be paid forthwith, the balance of $75,000 on or before 28 January or such further time as the parties might, in writing agree.  On the following day the smaller amount not having been paid, the parties attended before me to receive congratulations upon the way in which they worked things out. 

The other important change effected by the terms of settlement in which the parties are called applicant, first respondent and second respondent, was that Ms Lindeblad assumed liability to the plaintiff.  The preamble to terms of settlement recites that the applicant and both respondents had agreed to settle the action on terms following whereby the respondents agreed to pay $300,000, the plaintiff agreed to release and discharge them in consideration of "payment of the settlement sum by the respondents." 

The respondents jointly authorised payments to the trust account of the plaintiff's lawyers by paragraph 5 and I quote: 

"In default of the payment of the settlement sum as provided for in these terms or only part thereof the respondents acknowledge and agree that the applicant should thereupon be entitled to any judgment against the respondents either jointly or severally on any balance on unpaid such judgment to be entered in this action without any further proceeding and the respondents acknowledge and agree that the filing of an affidavit by the solicitors and the applicant shall be sufficient evidence of such default." 

There is then a confidentiality provision which, it seems to me, has gone by the board if only in the disclosures that were made in open court on 29 January this year.  The parties agreed to join in the obtaining of a certain "annexed consent order" which presumably corresponds with the order that I made on 29 January.  The plaintiff's lawyers were obliged on receipt of the settlement sum to consent to the dissolution of the freezing order and file notice of discontinuance. 

Ms Lindeblad represents herself today.  She is the real respondent or defendant given that on 23 January this year Mr Healey became bankrupt, so that his affairs are now in the hands of the trustee.  That information was certainly not disclosed on 29 January.  It may not have been disclosed until today, and Mr Fleming QC appearing for the plaintiff says he didn't know about it. 

I'm not sure whether I've given a reference a record to what happened on 29 January 2013 at [2013] QDC 24. I haven't recorded, I suppose, [indistinct] as unnecessary detail, that my order was preceded by one made by consent by the Registrar on 20 December 2012. It adopted the strictly inappropriate applicant/respondent terminology, but I'm not sure that anything turns on that consideration.

On 27 March 2013, the next hearing date fixed in my order of 29 January, Judge Andrews was presiding when a further extension in the effect of the underlying order to today was ordered and today's hearing.  What the plaintiff seeks is further extension of the effect of the order until 23 July 2013.  The order may require some

amendment to acknowledge Mr Healey's bankruptcy. 

The main issue ventilated has been Ms Lindeblad's.  She contends that she's not a defendant, that if she is she ought to be removed.  Her submission is that she was made a defendant only on the assumption that the proceeding was to go to trial, something which never occurred because of the successful outcome of the mediation. 

Can you help me, what was to go to trial?  Was it an application to set aside the default judgment or something? 

MR FLEMING:   No, your Honour, it was the application to determine the ownership of the boat and to have the boat ‑ ‑ ‑

HIS HONOUR:   All right.

MR FLEMING:   ‑ ‑ ‑ transferred back to ‑ ‑ ‑

HIS HONOUR:   All right.

MR FLEMING:   ‑ ‑ ‑ Mr Healey.

HIS HONOUR:   Thank you.  I had rather understood Ms Lindeblad to be communicating to the court that there will be some triable issues between the plaintiff and the defendants to do with whether either of them was liable to her at all.  That's something which had never been determined in a contested hearing. 

Her submission that she ought not to be a defendant if no issues arose by way of liability to the plaintiff in damages is more compelling than what turns out to be her submission that she oughtn't to be a defendant because there never was to be any trial involving her.  As matters have developed that may prove to be her misfortune.  As things stand the court is clearly proceeding on the view that Mr Healey is the owner or has sufficient interest in the "Nitro" to justify the plaintiff's pursuing it if that's the only way she can receive payment.  Of the $75,000 still owing the court's told that no more has been paid than three of the monthly instalments of $500 which all the recent court orders require be made. 

It remains a matter for the future whether Ms Lindeblad is able to contend that the "Nitro" is solely hers and an asset against which the plaintiff cannot have recourse.  It may well be too late for her to achieve anything along those lines.  As I read the terms of settlement, those as a matter of contract law commit her to accepting liability along with Mr Healey.  Accepting that she is blameless in respect of the plaintiff's injury there is no reason why, as a supporter of Mr Healey, she might not come in and accept liability jointly with him for the reduced sum which the plaintiff was to get.  It may well be that the plaintiff's willingness to forego what would appear to be a sum in excess of $150,000; owes much to her having a second individual to pursue. 

Ms Lindeblad has suggested from the Bar table that the terms of settlement were not explained to her, that she didn't understand them, that she wasn't provided with a full

copy and the like.  If she does have any proper claim to have the terms of settlement set aside that seems to me is something that she has to pursue in a special proceeding in that regard;  for example, one seeking a rectification of the terms of settlement. 

It is replete with obvious impositions of liabilities upon her.  I would say that it's hardly convincing to hear her say she didn't understand.  The other leg of her argument is that the parties have agreed that she should no longer be a defendant.  She makes that argument on the basis that when the parties met to work out what ought to be included in the consent order extending the freezing order to 29 January 2013 which in the event was made by the Registrar, Judge Samios' order of 22 November 2012 was amended. 

She exhibits to her affidavit only one page of the document which shows deleted from the document, among other things, the whole of the paragraphs numbered 11A, 11B, 11C, 11D, 11E and 11F.  That means one finds on the document struck out "11C Ann Lindeblad be joined as second defendant."  She has plainly misunderstood the effect of that document.  In no way does it affect the order Judge Samios made.  What occurred is that the parties used a copy of that order as the starting point for their working out what the appropriate next order was. 

The full document was tendered by Mr Fleming who, incidentally, is one of the persons initialling the heavily amended working document.  It refers to Ann Lindeblad as second defendant.  The other parties are plaintiff and defendant, making one wonder how reference to applicant and respondent slipped in so soon afterwards.  It’s clear, to me, that the document contemplated Ann Lindeblad's remaining as a defendant. 

It is trite to observe that having been made a defendant by Judge Samios' order she would remain a defendant for every purpose unless and until an order is made removing her as such.  She is seeking that such an order be made today and with a view to the "Nitro" and any other relevant assets of hers that are affected by the freezing order being liberated.  Acceding to that application by would have the effect of subverting the arrangements which have been carefully put and kept in place, to ensure that property that might be available in satisfaction of the plaintiff's judgment is not in some way spirited away. 

It seems clear from the defendants' conduct of the matter that they feel a serious injustice has been done to them, that the plaintiff does not deserve the judgment she obtained or the reduced amount in consequence of the mediation.  Ms Lindeblad has explained to the court that Mr Healey has lost everything.  He was the tortfeasor and defendant.  It's inappropriate that she be responsible.  She appears to believe, and perhaps quite genuinely, that $225,000 is more than enough for the plaintiff.  Her analysis of the situation is simply untenable. 

As I've said, she may have possibilities of making good some of her points such as that the "Nitro" really is hers as a result of some property settlement with Mr Healey

far enough back in time to be immune from the challenge or that the terms of settlement as they affect her can be set aside, but those aren't matters for me today. 

In principle, the order Mr Fleming seeks ought to be made. 

...

HIS HONOUR:   I'll also adjourn to that date Ms Lindeblad, the second defendant's application to reduce monthly instalments required to $250 from 500.

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