Carter v Mehmet (No 2)

[2021] NSWCA 333

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Carter v Mehmet (No 2) [2021] NSWCA 333

Hearing dates:

On the papers

Date of orders:

17 December 2021

Decision date:

17 December 2021

Before:

Meagher JA at [1];
Gleeson JA at [1];
Payne JA at [1]

Decision:

(1)   The sum of $40,000 paid into Court by the appellants on 29 July 2021 be released to the appellants forthwith;

(2)   The respondents pay the costs of the appellants of the motion seeking return of the sum paid into Court as security for costs.

Catchwords:

COSTS — security for costs — where appellants provided security for respondents’ costs of the appeal — where appeal allowed — order for release of sum paid as security

Cases Cited:

Carter v Mehmet [2021] NSWCA 286

Murray John Carter v Ian Mehmet t/as ATF Ian G Mehmet Testamentary Trust [2021] NSWCA 32

Texts Cited:

GE Dal Pont, Law of Costs (5th ed, 2021, LexisNexis)

Category:

Consequential orders

Parties:

Murray John Carter (First Appellant)
The Wheel Resort Pty Ltd (Second Appellant)
Cathscompany Pty Ltd (Third Appellant)
Ian Mehmet t/as ATF Ian G Mehmet Testamentary Trust (First Respondent)
Cameron Mehmet t/as ATF Cameron Mehmet Testamentary Trust (Second Respondent)
Errol Mehmet t/as ATF Errol J Mehmet Testamentary Trust (Third Respondent)
Cheers Aviation Pty Ltd t/as ATF KMCG Investment Trust (Fourth Respondent)
Matthew Timothy Cheers (Fifth Respondent)

Representation:

Counsel:
T Alexis SC, M Southwick (Appellants)
DA Smallbone (Respondents)

Solicitors:
Australian Law Group Heydons (Appellants)
Beswick Lynch Lawyers (Respondents)

File Number(s):

2020/140939

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity

Citation:

[2020] NSWSC 413

Date of Decision:

17 April 2020

Before:

Ward CJ in Eq

File Number(s):

2015/360420

Judgment

1. THE COURT: On 16 March 2021, Meagher JA made orders requiring Mr Murray John Carter, The Wheel Resort Pty Ltd and Cathscompany Pty Ltd, the vendors under a contract for the sale of land (together, the appellants) to provide security for costs of the appeal in the sum of $40,000 for the purchasers Messrs Ian, Cameron and Errol Mehmet and Cheers Aviation Pty Ltd and their guarantor, Mr Matthew Timothy Cheers (together, the respondents): Murray John Carter v Ian Mehmet t/as ATF Ian G Mehmet Testamentary Trust [2021] NSWCA 32. On 29 July 2021, the appellants paid the sum of $40,000 into Court as security for the respondents’ costs of the appeal.

2. On 25 November 2021, this Court allowed the appeal brought by the appellants against the respondents: Carter v Mehmet [2021] NSWCA 286.

3. The Court set aside the orders of the primary judge made on 17 April 2020 and lieu thereof ordered:

“(a) Judgment for the appellants against the respondents in the sum of $480,832.20 plus interest thereon from 29 November 2015 pursuant to s 100 of the Civil Procedure Act 2005 (NSW).

(b)   Respondents pay the appellants’ costs of the proceeding below, including (as per the orders of the Court of Appeal made on 13 December 2018) the costs of the separate determination the subject of the proceeding before Darke J in 2017.”

4. The Court also ordered that the respondents pay the appellants’ costs of the appeal.

The notice of motion

5. On 9 December 2021, the appellants filed a notice of motion seeking the following orders:

“1   Order pursuant to [Uniform Civil Procedure Rules 2005 (NSW), r] 41.3, that the Registrar of the Court release forthwith the amount of $40,000 held in Court as security for the respondents’ costs of the appeal (including any interest thereon) to the solicitors for the appellants.

2   The respondents pay the appellants’ costs of the proceedings below, including (as per the orders of the Court of Appeal made on 13 December 2018) the costs of the separate determination the subject of the proceeding before Darke J in 2017, on the ordinary basis up to 21 March 2016 and on the indemnity basis thereafter.

3   The respondents pay the appellants’ costs of the appeal on the indemnity basis.”

6. On 13 December 2021, the Registrar made the following orders in relation to the appellants’ notice of motion:

“1.   Reserves on the question of the payment of security.

2.   Respondent’s submissions to the motion and affidavits to be filed and served by 14 February 2022.

3.   Reply to be filed and served by 28 February 2022.

4.   Mention 7 March 2022.”

7. As the question of the return of the amount paid as security for costs is outside the delegation of the Registrar, the matter was referred to the Court to be dealt with on the papers. The remaining orders, relating to the claim for indemnity costs, will be addressed by the Court in early 2022 once the submissions referred to in orders 2 and 3 above have been received.

8. On the question of the return of the amount paid into Court as security for costs, the appellants relied on a written submission dated 13 December 2021. The respondents, who were directed by the Court to file and serve any submission opposing the release of the funds paid into Court by the appellants by 4pm on 16 December 2021, did not make any written submission.

9. The only evidence on the application was an affidavit filed by Mr Brad Heydon, who was the solicitor with carriage of the appellants’ matter, sworn 9 December 2021. Mr Heydon gave evidence that, on 11 February 2016, Darke J made orders that the appellants be restrained from dealing with or disposing of the proceeds of sale of their land, save for various amounts including legal expenses and $1,000 per week for Mr Carter to live on. Mr Carter ceased taking the weekly drawings of $1,000 from 30 January 2019, when advice was given in relation to the entities that were entitled to the proceeds of the sale. Having no other substantial assets, since that time Mr Carter has relied on the generosity of friends for accommodation. In 2019 Mr Carter lived with his daughter in a bush shack, which was destroyed in the bushfires of the summer of 2019-20. Mr Carter was provided with three grants of $20,000 each by the Australian Red Cross to assist him arising from the destruction of the shack and its contents. On 10 August 2020, the respondents garnished Mr Carter’s bank account in the amount of $20,730.21, which included one of the $20,000 grants paid by the Red Cross.

10. The appellants submitted that they were entitled to the return of the $40,000 sum paid into Court as security for the respondents’ costs of the appeal. Since this Court allowed the appellants’ appeal and did not make any order for costs in the respondents’ favour, the entitlement to costs that the security for costs order was designed to protect does not arise.

Consideration

11. In GE Dal Pont, Law of Costs (5th ed, 2021, LexisNexis) at [28.66]:

“Case authority dictates that a plaintiff who pays money into court as security for the defendant's costs of the action, and succeeds in the action and secures a costs order in his or her favour, is entitled to have that money paid out of the court as soon as judgment is entered … .”

12. While it remains open to the respondents to seek special leave to appeal to the High Court of Australia, the prospects of any prospective application are, for present purposes, irrelevant. The judgment of this Court stands unless and until it is overturned by the High Court. The respondents are not entitled to any order for costs from the appellants. Even if the respondents are successful in obtaining special leave to appeal, they would not in those circumstances be entitled to security for costs from the appellants.

13. The appellants are plainly impecunious. No reason has been shown why the funds they paid into Court should not be returned to them forthwith.

Orders

14. For the foregoing reasons the Court orders:

1. The sum of $40,000 paid into Court by the appellants on 29 July 2021 be released to the appellants forthwith;

2. The respondents pay the costs of the appellants of the motion seeking return of the sum paid into Court as security for costs.

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Decision last updated: 17 December 2021