Cape v Redarb Pty Limited

[1993] HCATrans 366

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IN THE HIGH COURT OF AUSTRALIA

Registry No Cl of 1993

B e t w e e n -

WILLIAM TIMOTHY CAPE

Judgment Debtor

and

REDARB PTY LIMITED (Receiver

and Manager Appointed)

First Judgment Creditor

ROBERT JOHN YEOMANS

Second Judgment Creditor

Return of Garnishee Summons

TOOHEY J

(In Chambers)

Cape(2) 1 7/12/93

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 7 DECEMBER 1993, AT 9.00 AM

Copyright in the High Court of Australia

MS S.J. SHEPPARD:  Your Honour, in this matter I appear for

the judgment creditors, Redarb Pty Limited and

Mr Yeomans. (instructed by Gallens Crowley

Chamberlain)

MR W.T. CAPE:  Your Honour, I appear for myself in this

matter. I seek permission to replace Mr Crossin,

my solicitor, in this matter for today.

HER HONOUR:	Very well, thank you. Yes, Ms Sheppard.
MR SHEPPARD:	Your Honour, it is the judgment creditors'

application for an order that funds paid into court

on 17 November 1993, pursuant to a summons to

garnishee addressed to Norman Ralph Richardson in

this matter, be paid out to the judgment creditors.

The application is made pursuant to Order 46 of the

High Court Rules which deals with the attachment of

debts.

HIS HONOUR:	Do you have a copy of the rules, Mr Cape?
MR CAPE:	Not with me, Your Honour, no.
HIS HONOUR:	Could a copy be made available to Mr Cape, if

there is a spare copy, just in case you need to

follow some of these comments by counsel. Yes,

Ms Sheppard.

MS SHEPPARD:  Your Honour, in this matter there was an

application for special leave to appeal before the

Court on 11 June.

HIS HONOUR:  I have read the papers, thank you. I am aware

of the circumstances in which the debt came into

existence and the fact that the money has been paid

into Court.

MS SHEPPARD:  I seek leave to file in court an affidavit of

Mark Stephen Aspin, which is an affidavit of

service of the garnishee on Mr Richardson, in terms

of Order 46 rule 1(3), and I seek leave also to

file in Court - - -

HIS HONOUR:  I suppose in a sense - I will take the

affidavit but it has been overtaken by events

because the money has in fact been paid into Court.

MS SHEPPARD: It is a formal matter, Your Honour. This

affidavit may also be a matter only of formality

but it is an affidavit sworn by me this morning

dealing with service on Mr Cape's solicitor and

with the fact that I notified the garnishee that

the time of today's hearing had been brought

forward by 15 minutes.

Cape(2) 2 SHEPPARD 7/12/93

HIS HONOUR:  Yes. Once again, thank you for that, but it is

also overtaken by events.

MS SHEPPARD:  Your Honour, Order 46 does not itself deal

with payment out of money paid into Court by a

garnishee but the money is paid into Court pursuant

to rule 4 subrule (1). The only rule, I think, then

that deals with the payment out is Order 72 rule 6

which provides that:

Moneys paid into Court are subject to the order of the Court or a Justice and shall be

dealt with pursuant to that order -

It would be our submission that Order 46 contemplates that the garnishee having paid the

money into Court, the Court would then release the

money to the judgment creditor unless circumstances

arise which are dealt with in Order 46 rule 5 or

rule 7 which are claims by the garnishee or a third

party to be entitled to repayment or payment of the

money, and there would not be, in our submission,

any basis for payment other than out of Court in

terms of Order 72 or, there having been a trial on liability, out of Court in terms of Order 46 rules

5 and 7.

HIS HONOUR:  Yes, thank you, Miss Sheppard. I do not think

I need to hear from you any further at the moment.

I will just hear what Mr Cape wishes to say.

MR CAPE:  Your Honour, my objection in this particular

matter is that the moneys should have been, and the

Receiver, I say, knows that matters should have

been set off against my account with the company,

Redarb. That has been the habit of the Receiver

since he was appointed, in all matters except for

distributions which was for an outstanding amount

when he was appointed.

As late as last Friday I sought further advice

on the matter of set-off and I spoke to a chap who

is considered to be an expert in Sydney on the

matter, and I was just preparing for him a copy of

my unit holder's account and that is not quite

finished at this stage. I was preparing to fax it

off to him tomorrow when I, for the first time, I

knew this Court was hearing this matter today.

HIS HONOUR:  I am sorry, what do you mean? Are you

suggesting you have just become aware that this

hearing was listed for today?

MR CAPE:  I only found out about it yesterday, Your Honour,

yes. But I am not using that as an excuse. I

wrote to the Receiver manager on the 14 October,

Copies were sent to the High Court, over this

Cape(2) 7/12/93

matter of the 14,000-odd High Court costs and I

gave him permission to set them off against my

account, and that is what I feel should have been

done, and that is what, as I say, has been done and

the habit of the Receiver since he has been

appointed - to set both debits and credits

against -

HIS HONOUR:  Well, clearly it has not been done here and the

company through the Receiver seeks order for

payment out of moneys which, I take it, there is no

doubt, is owing to you by Mr Richardson, and which

has now been paid into court and therefore in the ordinary course would be paid out to the judgment

creditor. Is there any legal foundation for your

suggestion that the money should be set off against

any moneys which may be owing by the company to

you?

MR CAPE: At this stage I have not got the legal advice on

it, and that is what I was seeking in Sydney on

Friday about the matter in general, not in this

particular relationship to this particular item,

and his advice to me at this stage was that, yes,

it should have been set off, just as the Receiver

has done it, but he wanted further particulars

before he would give me firm advice on the matter

and that is the position I am at at the moment,

Your Honour.

Could I simply ask that this matter be stood

over until I am able to supply the legal advice

that you request?	I am certainly not able to do it
at the moment.

HIS HONOUR:	I will see what Ms Sheppard has to say.
MR CAPE:	Thank you, Your Honour.
MS SHEPPARD:	Your Honour, it would firstly be my submission

that the application Mr Cape makes is not

contemplated by the rules and there is

therefore - - -

HIS HONOUR: Just before we get to that, I would just like

to satisfy myself about service, or notification to

Mr Cape of today's hearing.

MR SHEPPARD:	Yes, Your Honour.
HIS HONOUR:	Your affidavit of service, that is the

affidavit which you handed in this morning, speaks

of A telephone conversation with Mr Crossin on

1 December; when was Mr Cape or his solicitor

notified of today's hearing?

Cape(2)	4	7/12/93
MS SHEPPARD:	As far as I am aware, Your Honour, there was no notification given to Mr Cape personally.	The

only notification that was given was to Mr Crossin.

As far as I am aware, the first occasion that it

came to Mr Crossin's attention was the letter of

1 December, which is annexed to the affidavit and marked A, from my firm to Crossin Barker Gosling.

I can say, Your Honour, that the conversation I had

with Mr Cape during the morning of 1 December - I

cannot tell Your Honour the time other than to say

it was in the morning - the garnishee was not a

matter of surprise. We were discussing a number of

matters to occur before Christmas in relation to
these parties, and this was one of the matters in

respect of which he expected to receive

instructions from Mr Cape on the following Friday.

So it was not of any particular interest to

him. It was just one of a series of things we

discussed. And he indicated to me on that occasion

that he thought it unlikely that he would have

instructions to attend, but that he would formally

obtain those instruction the following Friday. So

my impression certainly was that we was aware of it
well prior to 1 December, but my only knowledge of

it - - -

HIS HONOUR:	When you say "of it"; do you mean of the -
MS SHEPPARD:	Of the garnishee and of its return
HIS HONOUR:	And of the listing on the day?
MS SHEPPARD:	Yes, Your Honour.

HIS HONOUR:  Yes, thank you. I interrupted you; you were

going to say something about the capacity of

Mr Cape, or rather the capacity of this money that may be owing to Mr Cape to be set off against the

judgment debt, the subject of the garnishee.

MR SHEPPARD:  The first submission I would like to make,

Your Honour, is that the rules do not contemplate

payment of the moneys produced in answer to the

garnishee, other than to the judgment creditors, or

return to the garnishee, or to some other third

party. The rules contemplate, in my submission,

that there having been a judgment given in favour

of the judgment creditors, those are the only

options available to the Court.

Secondly, Your Honour, by way of evidence from

the bar table, which is not terribly satisfactory,
my instructions are that the Receiver is of the
order of $400,000 out of pocket as a result of this

receivership and that there are no moneys against

which this could be set off, and I am not able to

Cape(2) 7/12/93

give you any better evidence of that this morning,

other than to tell you that those are my

instructions.

The third submission I would like to make is

that if Mr Cape is entitled to receive a set-off,

and I am unable to comment on that as a theoretical

question, then it will be incumbent on the

Receiver, if these moneys are paid to the Receiver,

to account for these moneys in any accounting that
the Receiver does during the receivership so that

Mr Cape does not lose by payment to the judgment

creditors his right to have a proper account taken,

taking these moneys into account, and for those
reasons, and given the costs that continue to be

incurred in the matter coming before the Court, I

would ask Your Honour to make the order for payment

out.

Your Honour, Mr Crossin certainly has not said to me in the last week or so that he was not acting

for Mr Cape in this matter. In fact, yesterday he

certainly gave me the impression that he was. This

matter has been on foot for some time and if

Mr Cape had wished to avail himself of other legal advice or to make any other application to the

Court, it would be our submission that he has had

ample time to do so, given that he is not going to

be prejudiced by the payment out because of the

Receiver's duty to account.	We would ask you to
make this order today.

HIS HONOUR:  Yes, thank you, Ms Sheppard. Do you want to

say anything by way of response, Mr Cape?

MR CAPE: Yes, Your Honour; except I reiterate that I did

not know about this Court hearing today until yesterday at about - approximately 11 o'clock
yesterday. There seems to be some uncertainty

about the rule of set-off; that I would like to

have the opportunity of putting a legal submission

on it.

HIS HONOUR:  But what Ms Sheppard is putting to me is that

in any event, if the order is made, the money goes

to the Receiver. It is money in the hands of the

Receiver and any obligation to account that exists

between the Receiver and you does not disappear by

reason of the money being paid to the Receiver.	It
is in the Receiver's hands and, like any other

money that is in the hands of the Receiver, must be

dealt with according to law.

MR CAPE: Yes. Well, I cannot resist that statement,

Your Honour, but I still maintain that on the

advice I have at the moment - and I have not got it

in writing - that I do have the right of set-off

Cape(2) 6 7/12/93

and it should be applied to this amo~nt of money,

and there is a difference. I mean, the difference

between a paper entry and hard cash. There is a

difference.

HIS HONOUR:  Yes, thank you, Mr Cape.

This matter has had a long history and, in all

the circumstances, I am not persuaded that an

adjournment of this particular aspect of the

litigation is warranted. In accordance with

Order 46 of the High Court Rules, a garnishee

summons has been issued.	The garnishee has
admitted the debt.	The money has been paid into

Court. In the ordinary course, there is no reason

why that money should not be paid out to the

Judgment Creditor.

Mr Cape suggests that there are moneys due to

him against which this judgment debt should be

set off. There is, I think, force in the

circumstances so dictate, or made the subject of some issue of liability between the Judgment Creditor and a third party.

submission of Ms Sheppard that the order does not
contemplate disposition of money other than to the

So far as the question of set-off is

concerned, I am not persuaded that a set-off is

appropriate but, in any event, there is no

foundation in the material before me to warrant

consideration of a set-off. There is also force in
the submission by Ms Sheppard that, in any event,

if the money is paid to the Receiver, then the

Receiver has an obligation to account for that

money in the same way as he has an obligation to

account for any moneys that come into his hands.

For that reason there is no apparent prejudice to

Mr Cape.

I propose therefore to make an order in terms

of the draft order that has been handed to me which

requires only, I think, the substitution of the

name of Ms Sheppard for that of Mr Loftus.

MS SHEPPARD:  Your Honour, would it be of any assistance if

I handed up a clean copy of that document?

HIS HONOUR:  Yes, thank you. There will be an order in

terms of the minute handed to me by Ms Sheppard and

initialled by me now.

AT 9.16 AM THE MATTER WAS ADJOURNED SINE DIE

Cape(2) 7/12/93