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Brown v Forrest

Brown v Forrest

Case [2017] NSWSC 1810 18 December 2017

Interlocutory Orders

Costs

Equitable Lien

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Brown v Forrest [2017] NSWSC 1810
Hearing dates: 20 October, 24 November, 15 & 18 December 2017
Date of orders: 18 December 2017
Decision date: 18 December 2017
Jurisdiction: Equity - Applications List
Before: Parker J
Decision:
Second defendant to reimburse first defendant for plaintiff’s costs of proceedings paid out of Court in the sum of $19,348, with interest from 24 November 2017 until payment

Catchwords: Civil Procedure – interpleader – sum paid into court – two claimant parties to sum – claimed equitable lien over fruits of litigation – incidence of costs – plaintiff’s costs paid out of sum in court – whether costs order for reimbursement of plaintiff’s costs should be made against unsuccessful claimant
Legislation Cited: Interpretation Act 1987 (NSW), s 8(b)
Trustee Act 1925 (NSW), ss 95, 99
Uniform Civil Procedure Rules 2005 (NSW), Pt 41, Pt 43
Cases Cited: Australia and New Zealand Banking Group Limited v S & Co [2014] NSWSC 1094
De La Rue v Hernu, Peron & Stockwell Ltd [1936] 2 KB 164; 2 All ER 411
Grogan v Orr [2001] NSWCA 114
Jackson v Richards (2005) 12 BPR 23,091; [2005] NSWSC 630
McPherson, Thom & Co v Coombie Pastoral Co Pty Ltd [1929] VLR 295
Residential Housing Corporation v Esber (2011) 80 NSWLR 69; [2011] NSWCA 25
St George Bank v Meredith [2017] NSWSC 961
Category: Principal judgment
Parties: Paul Andrew Brown (Plaintiff)
Tara Forrest (First Defendant)
Broun Abrahams Burreket Lawyers Pty Ltd (Second Defendant)
Representation:
Counsel:
R Tregenza/S Feredoes (Plaintiff)
J Granger (Second Defendant)
Solicitors:
Paul A Brown & Co (Plaintiff)
Swaab Attorneys (Second Defendant)

File Number(s): 2017/85586
Publication restriction: Nil

Judgment – EX TEMPORE

(Revised and issued 21 december 2017)

These proceedings concern a fund of approximately $38,000 in Court. It represents a part of the proceeds of the sale of a property at Glebe. The property in question was owned by Tara Forrest, the first defendant, and her former husband, Demetrios Douramanis.
The property was sold pursuant to orders made by the Family Court in property division proceedings under the Family Law Act 1975 (Cth), s 79 brought against Ms Forrest by Mr Douramanis. The second defendant, Broun Abrahams Burreket Lawyers Pty Ltd (“BAB”), acted for Ms Forrest at an earlier stage of those Family Court proceedings. The Family Court orders provided for the sale of the property by Mr Douramanis. They also provided for a sum of $50,000 to be retained out of the proceeds for each of Ms Forrest and Mr Douramanis.
The plaintiff, Paul Andrew Brown, is a solicitor who acted for Mr Douramanis on the sale of the Glebe property. Before completion of the sale in July 2016, BAB notified Mr Brown of a claimed equitable lien over Ms Forrest’s $50,000 for approximately $37,000 in unpaid fees. Ms Forrest would not agree to the $37,000 claimed by BAB being paid out and eventually Mr Brown commenced these proceedings to resolve the dispute and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Brown v Forrest

Details

AGLC: Brown v Forrest [2017] NSWSC 1810
Case: [2017] NSWSC 1810
Decision Date: 18 December 2017

CaseChat Overview and Summary

The matter of Brown v Forrest involved two parties who were both claimants to a sum of money held in the court. This sum was derived from litigation, and both parties claimed an equitable lien over the proceeds. The central issue before the court was whether an order for the reimbursement of the plaintiff's costs, which had been paid from the sum in court, should be made against the unsuccessful claimant. The court was required to consider the principles governing interpleader proceedings, the allocation of costs, and the implications of an equitable lien.

The court began by noting the well-established principles of interpleader proceedings, where a party holding a disputed sum pays that sum into court. The court recognised that the unsuccessful party may be liable for costs, but only to the extent that they had caused the costs to be incurred. The court examined the concept of an equitable lien, which allows a party to claim a right over the property of another, but only to the extent of a debt or obligation owed. In this case, both claimants asserted an equitable lien over the sum in court. The court had to determine whether the unsuccessful claimant should bear the costs incurred by the successful party, particularly when those costs had been paid from the sum in court.

In its reasoning, the court found that while the unsuccessful claimant did not directly cause the costs to be incurred, the principles of interpleader and equitable liens necessitated that they should bear the costs. The court held that the unsuccessful party should be liable for the costs incurred by the successful party, as the sum in court was the source of those costs. The court determined that the unsuccessful party should be ordered to reimburse the plaintiff's costs. The court emphasised that the equitable lien did not absolve the unsuccessful party of their liability for costs in interpleader proceedings.

The final order of the court was that the unsuccessful claimant in the interpleader proceedings should be liable to reimburse the plaintiff's costs, which had been paid from the sum in court. The court's decision underscored the importance of the principles governing interpleader and equitable liens in determining the incidence of costs in such proceedings.

Orders