Commonwealth of Australia v Davis Samuel Pty Limited and; Ors (No 12)
[2020] ACTSC 312
•2 February 2012
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
| Case Title: | Commonwealth of Australia v Davis Samuel Pty Limited and Ors (No 12) |
| Citation: | [2020] ACTSC 312 |
| Hearing Date(s): | 2 February 2012, 6 December 2013, 21 November 2014, 13 May 2015, 11 May 2016 |
| Decision Date: | 20 November 2020 |
| Before: | Refshauge J |
Decision: | 1. | The application by the Commonwealth to vary the Consent Orders made on 1 July 2002 be dismissed. |
| 2. | The application by Dawn May Endresz to have the Commonwealth lift the caveat on the title to the property at 11 John Court, Albury, in the State of New South Wales be dismissed. | |
| 3. | Unless, within 14 days, any party submits otherwise in writing with reasons, each party bear their own costs of the proceedings on these two applications. |
| Catchwords: | PRACTICE AND PROCEDURE – Judgment and Orders – Freezing Orders – Amendment |
| Legislation Cited: | Court Procedures Rules 2016 (ACT), r 2004 Supreme Court Rules 1970 (NSW) |
| Cases Cited: | Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 Attorney-General v Tomline (No 2) (1877) 7 ChD 388 |
| Australia Securities and Investments Commission v Edensor | |
| Nominees Pty Ltd [2001] HCA 1; 204 CLR 559 Bailey v Marinoff (1971) 125 CLR 529 Barnes v Addy (1874) LR 9 Ch App 244 Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 Cacek v Cacek [1979] VR 385 Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 Chandless-Chandless v Nicholson [1942] 2 KB 321 Charisteas and Charisteas [2015] FCWA 15 Chavez v Moreton Bay Regional Council [2009] QCA 348; [2010] 2 Qd R 299 Commonwealth of Australia v Albany Port Authority [2006] WASCA 185 | |
| Commonwealth of Australia v Davis Samuel Pty Ltd & Ors (No 7) | |
| [2013] ACTSC 146; 282 FLR 1 | |
| Commonwealth of Australia v Davis Samuel Pty Ltd & Ors (No 8) | |
| [2014] ACTSC 312 | |
| Commonwealth of Australia v Davis Samuel Pty Ltd & Ors (No 9) | |
| [2015] ACTSC 127; 296 FLR 62 Commonwealth v Davis Samuel Pty Ltd & Ors (No 10) [2016] | |
| ACTSC 364 | |
| Commonwealth v Davis Samuel Pty Ltd (No 11) [2017] ACTSC 2; 316 FLR 159 | |
| Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR | |
| 460 Davis Samuel Pty Ltd v Commonwealth of Australia [2016] ACTCA 22 Endresz v Commonwealth of Australia [2020] ACTCA 48 Fatimi Pty Ltd v Bryant [2002] NSWSC 750; Aust Tort Reports 81- 677 Four Oaks Enterprises Pty Ltd v Clark (No 2) [2003] TASSC 70; 12 Tas R 125 Gamser v Nominal Defendant (1977) 136 CLR 145 General Credits Ltd v Ebsworth [1986] 2 Qd R 162 Hall v Nominal Defendant (1966) 117 CLR 423 Hall v Richards (1961) 108 CLR 84 Harvey v Phillips (1956) 95 CLR 235 | |
| Hayes v O’Sullivan [2001] WASC 55; 24 WAR 40 | |
| Hunter v Commonwealth Trading Bank of Australia (Unreported, Supreme Court of New South Wales, Young J, 12 June 1985) Klewer v Official Trustee in Bankruptcy (No 2) [2010] NSWCA 258 Licul v Corney (1976) 180 CLR 213 | |
| Mareva Compania Noviera SA v International Bulkcarriers SA | |
| [1980] 1 All ER 213 Mentech Resources Pty Ltd v MCG Resources Pty Ltd [2012] QCA 197 Mighty River International Ltd v Mineral Resources Ltd [2020] WASCA 44 Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573 Mullins v Howell [1879] 11 Ch D 763 National Benzole Co Ltd v Gooch [1961] 1 WLR 1489 Neale v Lennox [1902] AC 465 Notaras v St George Bank Ltd [2005] ACTSC 5; 157 ACTR 1 Paine v Hofbauer (1988) 13 NSWLR 193 | |
| Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings | |
| (Canberra) Pty Ltd (1976) 15 ACTR 45 Purcell v FC Triggell Ltd [1971] 1 QB 358 R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1988) 18 FCR 389 Re Luck [2003] HCA 70; 78 ALJR 177 Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185 | |
| Southern Cross Exploration NL v Fire & All Risks Insurance Co | |
| Ltd (1986) 7 NSWLR 319 Tait v The Queen (1962) 108 CLR 620 Willshire v Commonwealth (1976) 9 ALR 325 | |
| Parties: | Commonwealth of Australia (Plaintiff) Davis Samuel Pty Limited ACN 083 081 985 (First Defendant) David John Muir (Second Defendant) Callform Pty Limited (Third Defendant) Peter Michael Cain (Fourth Defendant) Allan Paul Endresz (Fifth Defendant) CTC Resources NL ACN 009 061 036 (Sixth Defendant) Jozsef Endresz (Seventh Defendant) Dawn May Endresz (Eighth Defendant) |
| William Arthur Forge (Ninth Defendant) | |
| Kamanga Holdings Pty Limited ACN 003 316 292 (Tenth Defendant) Pellon Pty Limited ACN 082 375 951 (Eleventh Defendant) Michael McCann (Twelfth Defendant) Amative Pty Limited ACN 082 375 924 (Thirteenth Defendant) Mark Joseph Endresz (Fourteenth Defendant) Bisoya Pty Limited ACN 003 016 242 (Fifteenth Defendant) Winton Oil NL ACN 001 863 878 (Sixteenth Defendant) Quancorp Pty Limited ACN 002 755 133 (Seventeenth Defendant) | |
| Allan Paul Endresz as representative of the members of ‘Border | |
| Basketball Association Inc’ an unincorporated association | |
| (Eighteenth Defendant) Rodney James Endresz (Nineteenth Defendant) Joy Beverley Endresz (Twentieth Defendant) Tresmonay Pty Limited ACN 073 120 635 (Twenty-first Defendant) ACT Organics Pty Ltd ACN 008 628 662 (Twenty-second Defendant) Graham McCann Pty Limited ACN 008 653 969 (Twenty-third Defendant) Sandra Endresz (Twenty-fourth Defendant) Lorraine Olive Forge (Twenty-fifth Defendant) Christopher Muir (Twenty-sixth Defendant) TNG Limited ACN 000 817 023 (Twenty-seventh Defendant) Darren Smailes (Twenty-eighth Defendant) Shane Smailes (Twenty-ninth Defendant) Peter John Clark (Third Party) | |
| Representation: | Counsel |
| Mr J Hogan-Doran (Plaintiff) No appearance (First Defendant) No appearance (Second Defendant) No appearance (Third Defendant) In person (Fourth Defendant) In person (Fifth Defendant) No appearance (Sixth Defendant) Mr A Endresz (Seventh Defendant) Mr A Endresz (Eighth Defendant) In person (Ninth Defendant) No appearance (Tenth Defendant) No appearance (Eleventh Defendant) No appearance (Twelfth Defendant) No appearance (Thirteenth Defendant) No appearance (Fourteenth Defendant) No appearance (Fifteenth Defendant) No appearance (Sixteenth Defendant) No appearance (Seventeenth Defendant) No appearance (Eighteenth Defendant) No appearance (Nineteenth Defendant) Mr A Endresz (Twentieth Defendant) No appearance (Twenty-first Defendant) No appearance (Twenty-second Defendant) No appearance (Twenty-third Defendant) No appearance (Twenty-fourth Defendant) | |
| No appearance (Twenty-fifth Defendant) | |
| No appearance (Twenty-sixth Defendant) No appearance (Twenty-seventh Defendant) No appearance (Twenty-eighth Defendant) No appearance (Twenty-ninth Defendant) | |
| No appearance (Third Party) | |
| Solicitors | |
| Australian Government Solicitor (Plaintiff) Mr P Cain (First Defendant) No appearance (Second Defendant) No appearance (Third Defendant) Self-represented (Fourth Defendant) Self-represented (Fifth Defendant) Mr P Cain (Sixth Defendant) Self-represented (Seventh Defendant) Self-represented (Eighth Defendant) Self-represented (Ninth Defendant) No appearance (Tenth Defendant) No appearance (Eleventh Defendant) No appearance (Twelfth Defendant) No appearance (Thirteenth Defendant) No appearance (Fourteenth Defendant) Mr P Cain (Fifteenth Defendant) Mr P Cain (Sixteenth Defendant) No appearance (Seventeenth Defendant) No appearance (Eighteenth Defendant) No appearance (Nineteenth Defendant) Self-represented (Twentieth Defendant) Mr P Cain (Twenty-first Defendant) No appearance (Twenty-second Defendant) No appearance (Twenty-third Defendant) No appearance (Twenty-fourth Defendant) No appearance (Twenty-fifth Defendant) No appearance (Twenty-sixth Defendant) Snedden Hall & Gallop as agents for Jackson McDonald (Twenty- seventh Defendant) No appearance (Twenty-eighth Defendant) No appearance (Twenty-ninth Defendant) Mr P Cain (Third Party) | |
| File Number(s): | SC 75 of 1999 |
| REFSHAUGE J: | |
| Background |
1. This litigation has a long and unimpressive history commencing with the filing of an Originating Application on 29 January 1999.
2. The factual background of the cause of action is set out in the final judgment on liability: Commonwealth of Australia v Davis Samuel Pty Ltd & Ors (No 7) [2013] ACTSC 146; 282 FLR 1 at 266-75; [2]-[10]. A description of the parties is given in that decision at 275; [113]-[120]). I do not need to repeat that background and detail but rely on what is said there.
3. For present purposes, it is sufficient to say that the Commonwealth took the proceedings to recover funds that had been misappropriated. The defendants were recipients of some of those funds and were sued as knowing recipients principally under the principles set out in Barnes v Addy (1874) LR 9 Ch App 244.
4. In Commonwealth of Australia v Davis Samuel Pty Ltd & Ors (No 7), I found that a number of the defendants were liable to repay funds to the Commonwealth.
5. The defendants had converted some of the misappropriated funds into various assets. In the preliminary stages of the proceedings, the Commonwealth sought and obtained a number of freezing orders (formerly known as Mareva Injunctions: Mareva Compania Noviera SA v International Bulkcarriers SA [1980] 1 All ER 213) over some of those assets to restrain the defendants from disposing of them or otherwise dealing with them pending judgement.
6. Such orders restrained the relevant defendant from dealing in any way with or disposing of the assets. Such orders were made, for example, on 19 February 1999, 24 February 1999, 4 June 1999, 17 September 1999 and 8 October 1999. In addition, orders were made permitting the sale of some of those assets, provided that the proceeds were either kept in a trust account or paid to the solicitors for the Commonwealth, as, for example, on 8 October 1999 and 24 October 2000.
These Proceedings
7. The freezing order made on 19 February 1999, in particular, restrained eight of the
defendants “[u]ntil further order” from “dealing with or dissipating or diminishing in value
any asset acquired by any such defendant through the use of any part of [the
misappropriated funds]”.
8. For reasons that are not clear to me, a further order in identical terms was made by consent on 17 September 1999.
9. One of the assets subject to a freezing order was a property at 11 John Court, Albury, in the State of New South Wales (the John Court property) and registered in the name of the Eighth Defendant, Dawn May Endresz (Mrs Endresz).
10. In any event, on 11 July 2002, the original freezing order in respect of this property was varied by consent by a consent order dated 1 July 2002. In these reasons, I shall refer
to the consent order then made by the Court and dated 1 July 2002 as the “Consent Orders”. The Consent Orders permitted Mrs Endresz to sell the John Court property
as follows:
2. The 8th Defendant be at liberty to sell the property situated at 11 John Court, Albury in NSW comprised and described in Folio of the Register Volume 17 Folio 776810, either by private treaty or public auction;
a) at a price not less than $430,000;
b) the sale price to be paid in full at settlement;c) settlement to be not later than 2 months from the date of contract
or at such lesser price or on such other terms as agreed in writing by the
Plaintiff.
…
4. Immediately following the sale of the property situated at 11 John Court, Albury in NSW the proceeds of sale shall be distributed as follows:
a) payment to the vendors’ real estate agent of commission at the rate of
not greater than 2.5% and disbursements necessarily associated with
the sale;
b) payment of the vendor’s reasonable legal fees associated with the sale;
c) the balance proceeds of sale to be paid into Court pending the
determination of these proceedings.
5. Any and all orders made by this Honourable Court restraining the disposition of the above named properties are hereby varied to permit such sales to occur on the terms herein set out.
11. There were similar orders in relation to another property apparently owned by Mr Allan Endresz, the Fifth Defendant and, his wife, Mrs Joy Beverley Endresz, the Twentieth
Defendant. This property, known as “Haven Hill” at 374C RMB Howlong Road,
Spelters Creek, NSW, I shall call in these reasons, “Haven Hill”.
12. That property did not feature much in these proceedings, though the Commonwealth application, referred to below (at [17]), did refer to both properties.
13. For avoidance of confusion, I will refer in these reasons to the Eighth Defendant as
Mrs Endresz and owners of “Haven Hill” as Mr Allan Endresz and Mrs Joy Endresz.
14. As noted, the price for such a sale was set in the amendment to the freezing order at not less than $430,000. It appears, however, that such a sale did not take place at that time.
A similar variation was made in relation to “Haven Hill”, namely for Mr Allan Endresz
and Mrs Joy Endresz to sell it for not less than $675,000. It appears that this property also was not sold at this time, but no later request was made to permit its sale to proceed in 2010 as occurred for the John Court property, as noted below (at [38]).
16. Later, however, in circumstances set out below, Mrs Endresz proposed to sell the John Court property in 2010 and sought withdrawal of a caveat that had apparently been lodged by the Commonwealth on the title to the John Court property in order for the sale to proceed.
17. Discussions followed, as outlined below, and when they failed to result in an agreement, the Commonwealth, on 25 January 2012, applied for the Consent Orders to be varied. This was opposed by some, but not all, of the defendants, namely the 6th,
7th, 8th, 9th and 20th Defendants. For ease of reference, I shall refer to them as “the
Opponents” in these reasons.
The Commonwealth’s Application in Proceedings seeking that variation came before
me on 2 February 2012. I gave directions as to the filing of submissions and, in the interim, restrained Mrs Endresz from selling, disposing, encumbering or dissipating her interest in the John Court property.
19. At that hearing, Mrs Endresz made, through Mr Allan Endresz and Mr Peter Cain, an oral application for removal of the caveat that had been lodged on the title to the John Court property. It was agreed that the application should be considered after the
Commonwealth’s application for amendment of the Consent Orders had been resolved
as it was dependent upon the Commonwealth’s application in respect of that property
not succeeding.
20. Written submissions were received from the Commonwealth and the Opponents but for reasons not apparent on the papers available to me and which I do not now recall, the matter did not come back for hearing before judgment was given on liability.
21. I delivered judgment on liability on 1 August 2013 Commonwealth of Australia v Davis Samuel Pty Ltd (No 7). The final orders to give effect to this judgment were complex and further submissions were received. After a further hearing on 6 December 2013, I reserved the decision on the form of the final orders to be made consequent upon those findings and final orders were made on 21 November 2014: Commonwealth of Australia v Davis Samuel Pty Ltd (No 8) [2014] ACTSC 312. They had to be amended on 13 May 2015: Commonwealth of Australia v Davis Samuel Pty Ltd (No 9) [2015] ACTSC 127; 296 FLR 62; and on 11 May 2016: Commonwealth of Australia v Davis Samuel Pty Ltd (No 10) [2016] ACTSC 364.
On 6 December 2013, Mr Allan Endresz raised the matter of the Commonwealth’s
application. It was clear at that stage that I had assumed that the application had merged with the final judgment I had given. Mr Endresz disagreed. He added that he
was “making application for the court to decide upon the original application as to the
Consent Orders being adhered to for sale in relation to these properties”. The only
applications that he could be referring to is the application of the Commonwealth to vary the Consent orders and the application by Mrs Endresz to have the caveat lifted. There were no other applications before the Court, and he had made none. I am not
sure that he was, in reality, making “an application” but rather a request that the
decisions on these applications be made.
23. In any event, on 21 November 2014, I made final orders as to the disposition of the proceedings. Among the orders I made were the following relating to the John Court property.
24. Prior to pronouncing the final orders, Mr Endresz took the opportunity, despite the
nature and effect of the final orders, to mention the two applications and “that there had
been no judgment on them”. I responded, “well, the judgment overtakes that”. He was not satisfied with this, suggesting, without reasons, that it “doesn’t excuse the court
from making a decision”.
25. In the final judgment, I declared, inter alia, that the eighth defendant (Mrs Endresz) acquired the John Court property in trust for the Commonwealth. I then ordered that:
G(2) The eighth defendant, within 42 days of the making of this order:
1. Vacate the John Court property. 2.
Produce to the plaintiff at its address for service in these proceedings all certificates of title in her possession, custody or control of the John Court property and otherwise direct any mortgagee or mortgagees which have possession, custody or control of any such certificates of title or any other person or persons who have possession, custody or control of any such certificates of title to produce them in the same manner, such production being for the registration of the transfer of title of the John Court property to the plaintiff.
3.
To do all things reasonably necessary to transfer to the plaintiff the legal title of the John Court property. Such things to include, but not be limited to, executing documents and in particular, the transfer or notice of transfer of the legal title or both.
G(3)
In the event that the eighth defendant defaults in her obligations under order G(2)(ii) or (iii) or both, the court, acting under section 4(3) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) appoints under section 94 of the Civil Procedure Act 2005 (NSW) and authorises the registrar of the ACT Supreme Court to complete and execute all documents on behalf of the eighth defendant as are reasonably necessary to transfer to the plaintiff the legal title to the John Court property.
G(4)
Until further order the eighth defendant is restrained from assigning, transferring, encumbering, further encumbering, offering for security or otherwise dealing in any way with the John Court property other than in accordance with these orders, except with the prior written consent of the plaintiff.
G(5) Liberty be reserved to the plaintiff to apply to the court on two days’ notice to the eighth defendant in respect of orders G(1) to G(4). 26. As noted above (at [21]), the proceedings were further mentioned on 13 May 2015, when the Commonwealth applied to correct some mathematical errors said to have been made in the calculations. Despite the order made in 2014, the parties raised the
question of the Commonwealth’s application to vary the Consent Orders.
27. By then, certain of the defendants, including the Opponents, had commenced an appeal against my decision. Mr Endresz took the opportunity to raise the present issue. I indicated that I had considered the issue to have been resolved by the judgments given. Counsel for the Commonwealth agreed. I also noted that the issue was raised in one of the many grounds of appeal which had been included in the Notice of Appeal.
28. Mr Endresz submitted that neither was the case. He inquired as to whether he had to make an application. Counsel for the Commonwealth submitted that the issue had been resolved by the judgment and agreed to submit a short memorandum to that effect. Mr Endresz, however, also seemed to suggest that the Commonwealth was bound by the price set out in the Consent Orders that he considered, incorrectly, was the limit of the
Commonwealth’s equitable interest in the John Court property.
29. On 11 April 2016, the Commonwealth applied to the Court of Appeal to have the
defendants’ appeal struck out for want of prosecution. On 30 June 2016, Burns J did
so: Davis Samuel Pty Ltd v Commonwealth of Australia [2016] ACTCA 22.
30. In the meantime, this matter was further mentioned before me on 11 May 2016, when Mr Endresz, on behalf of himself and three of the other Opponents, applied for me to set aside ex debito justitiae the judgment I had entered. The ground was essentially that the proceedings were void because of what were said to be fundamental procedural defects. I ultimately dismissed that application on 13 January 2017: Commonwealth of Australia v Davis Samuel Pty Ltd (No 11) [2017] ACTSC 2; 316 FLR 159.
31. During the hearing in May 2016, Mr Endresz again raised the issue of the
Commonwealth’s application – not that he saw it in those terms: his articulation was
that he wished me to enforce “the consent orders by contractually bound versus market value”. I did not, and do not now, see that request as an application. It is not clear
exactly what was being sought, if anything specific. The dismissal of the
Commonwealth’s application and an order for it to remove the caveat, for example,
would leave Mrs Endresz at liberty to sell the John Court property (subject to the final orders being to the contrary) in accordance with the Consent Orders and without other restraint.
32. I did not formally reserve a decision, but in hindsight it was clear that the Opponents did not accept that the issue had been resolved by the judgment already delivered, which I note has been confirmed: Endresz v Commonwealth of Australia [2020] ACTCA 48.
33. I can only offer that my retirement on 11 May 2017, accompanied by a regrettable number of judgments then outstanding and a murder trial in the last months before my retirement meant that this decision was never completed. It was only this year when the ACT Law Society sought advice as to when it was to be delivered that I looked at the question of whether there was an outstanding decision. Despite being able to maintain that it had been resolved by the final orders, it seemed that the appropriate response was to complete a judgment as I have now done.
The Facts
34. I made findings of fact in Commonwealth of Australia v Davis Samuel Pty Ltd (No 7). I have regard to those findings. A considerable Schedule of Correspondence (which, of course attached the indexed correspondence, including annexures) filed by the Commonwealth on 25 January 2012, was received without objection or challenge. A further Schedule of Correspondence was also filed and also received without objection or challenge. An affidavit of Zita Maree Rowling made on 2 February 2001, was also admitted without objection. There was no cross-examination of the deponent. I have carefully read and examined all this material. I have regard, too, to the Court file of these proceedings, reviewing the over 400 documents filed and the many exhibits, though I have not re-read all of them. On the basis of this material, I make the following findings of fact.
35. On 20 April 1998, $6M of funds of the Commonwealth were paid to CTC Resources NL and then much of them was transferred to other parties. In particular, $430,000 was used to purchase for Mrs Endresz and in her name the John Court property. The Commonwealth claimed in these proceedings, and I so found, that these funds had been misappropriated from the Commonwealth and that, in using them to purchase the John Court property, Mrs Endresz was a knowing recipient of these funds in which the Commonwealth had an equitable interest and an equitable right to trace them into the assets into which they had been converted: Commonwealth of Australia v David Samuel Pty Ltd (No 7).
36. As noted above (at [5]), the Commonwealth sought to protect its interests in the various assets into which the misappropriated funds had been converted by applying to the Court to make the various freezing orders, including in respect of the John Court property.
37. Following the making of the freezing orders, but in the precise circumstances of which I did not have evidence, the Commonwealth appears to have lodged a caveat on the title of the John Court property.
38. On 19 April 2001, the then solicitors for Mr Allan Endresz and Mrs Endresz, Ken Cush & Associates, wrote to the Australian Government Solicitor advising that their clients
proposed to sell the John Court property and “Haven Hill” and that, although not yet “placed on the market at this time”, they intended “to advertise them in the near future”.
The letter indicated that Mrs Endresz wished to sell the John Court property at “market value”. It was reasonably to be inferred from this correspondence that the intention
was to sell the properties shortly after any consent was given by the Commonwealth to
lifting the caveats.
After some further correspondence, Ken Cush & Associates submitted proposed “terms
of settlement” on 10 September 2001. Those terms of settlement provided that the
sale was to be “at a price, being not less than that determined by a registered valuer”.
40. The Commonwealth then proceeded to obtain valuations of the properties and the Australian Government Solicitor provided copies to Ken Cush & Associates on 21 January 2002, with proposed consent orders that provided for the sale in similar
terms as the proposed terms of settlement, namely “at a price not less than that
determined by a valuer registered in NSW engaged by the Plaintiff [the
Commonwealth]”.
41. It appears that Mr Allan Endresz and Mrs Endresz had also obtained valuations which
were “slightly higher in valuation” but Ken Cush & Associates suggested that the
Commonwealth’s valuer had made the most recent valuation which “is the one on which
we should rely”.
42. There was further correspondence, not available to me, and, on 25 March 2002, the Australian Government Solicitor wrote to Ken Cush & Associates with a fresh draft of proposed consent orders which were, relevantly, in the terms set out above (at [10]), in particular, with a specified amount for the minimum sale price, namely $430,000 which was somewhat less than the original valuation obtained by the Commonwealth in June 2001 of $450,000, though a later valuation of October 2001 did assess the value at $430,000. The draft consent orders, included a requirement that settlement be completed not later than two months from the date of contract. The inclusion of this time limit somewhat reinforces my view that there was a shared expectation, if not shared understanding, that the sale would be effected promptly after consent.
43. Those draft consent orders were apparently signed on 26 March 2002, filed on 12 April
2002 and “settled” on 15 April 2002. The draft consent orders were formally made on
1 July 2002 but were only entered on 11 July 2002, thereby becoming orders of the Court, as noted above (at [10]); it is not clear on the evidence as to what caused that delay. I note that the time limit on completion found its way into the Consent Orders, in respect of the John Court property at paragraph 2 c): see [10] above.
44. There is no evidence about what happened until 11 January 2010, when Mr Peter Cain, the Fourth Defendant, a practising lawyer, who also acted from time to time for a number of defendants, wrote to the Australian Government Solicitor. The Commonwealth might be fairly criticised for having taken no action during this lapse of years to consider its interests. Mr Cain advised that Mrs Endresz and her husband Mr
Jozsef Endresz, the Seventh Defendant, sought the Commonwealth’s consent to the
withdrawal of the caveat over the title of the John Court property. He wrote that “Mrs Endresz and Mr Jozsef Endresz, due to age, could no longer maintain the property … and have purchased a smaller property at 11 Spring Rise, West Albury”. He continued, “this morning, they were offered $700,000 for the property [I assume the John Court
property] and of the view that they can improve on the price”. It is not clear whether Mr
Joszef Endresz had obtained an interest in the John Court property or was merely a resident and, if so, how he had obtained any such interest, especially as this would prima facie be contrary to the Consent Orders.
45. Somewhat curiously and perhaps concerningly, I note that, at the hearing on 2 February 2012, less than a month after this letter, the following exchange occurred:
MR CAIN:
Your Honour, relying on the consent orders back in July 2002 Dawn Endresz made a commitment to her family in relation to the sale of the property for $430,000.
HIS HONOUR: But she had an offer for 700?
MR CAIN: Well we are not aware of that. That is absolutely news to everybody in
the communication list [sic] today.
46. Also curiously, he added, too:
They recognise that you will require that the balance of sale proceeds be deposited into the Supreme Court trust account. The purchase of 11 Spring Rise, West Albury will require the payment of stamp duty, legal fees, moving costs, etc and this should be taken into account. That is, these expenses will be taken from the sale proceeds and the net amount will be deposited into the Supreme Court trust account.
47. Initially, the Australian Government Solicitor wrote consenting to the withdrawal of the caveat on terms that the whole of the proceeds of the sale, less those amounts specified in the Consent Orders, be paid into Court and that no costs of the purchase of the Spring Rise property be paid from the proceeds.
48. This prompted a response from Mr Cain, objecting that the response was “unfair and inequitable”. He continued:
Once again, and to make sure that I have made it clear, I am instructed to seek your consent to the withdrawal of caveat over 11 John Court, North Albury on the following conditions:
The proceeds of sale [less the expenses of the sale] will be used to purchase the property at 11 Spring Rise, West Albury. You can lodge a caveat over this property.
From the sale proceeds of $700,000 [maybe more] the purchase price of $430,000 [plus the expenses of the purchase, including stamp duty] will be paid. The remaining balance will be paid into the Supreme Court Trust Account.
As I understand it you will not consent to this proposal.
Please confirm that you will not consent to this proposal so that we can then prepare an Application in the Proceedings to bring the matter before the Honourable Justice Refshauge for determination.
49. I can only assume that the foreshadowed application to me would be intended to amend the Consent Orders since the proposal he had made in this correspondence does not accord with them. That became clear later.
The Australian Government Solicitor wrote back pointing out that “[u]sing the proceeds
of sale to purchase the Spring Rise property would not be in accordance with the
Consent Orders made on 1 July 2002”, but advised that instructions would be sought.
Mr Cain responded, noting that this “proposal will require a change [by consent] to the
consent orders”.
52. On 3 February 2010, the Australian Government Solicitor wrote to Mr Cain outlining a proposal to meet the wishes of Mrs Endresz as follows:
Having regard to your proposal, the Commonwealth is prepared to agree to withdrawal of
the caveat over the John Court property on terms and conditions that meet your client’s
desire to reduce the size of the property for which she is responsible, but leave the Commonwealth in no worse position than it currently stands. We propose the following terms and conditions:
a)
the proceeds of sale of the John Court property be used for the whole of the purchase price of the Spring Rise property;
b)
the Commonwealth will register a caveat over the Spring Rise property on the basis that it is entitled to an equitable interest in the whole of the Spring Rise land, as the beneficiary of a constructive trust, or alternatively, pursuant to an equitable charge as arises from the facts and circumstances pleaded against Dawn Endresz as eighth defendant (and, if he acquire an interest in the Spring Rise property, Jozsef Endresz as seventh defendant) in proceedings SC 75 of 1999 in the Supreme Court of the Australian Capital Territory;
c)
the proceeds of sale of the John Court property are not to be used for any expenses relating to sale of the John Court property (whether commission, legal fees, disbursements or any other costs or expense), or for any expense of purchasing the Spring Rise property; and
d)
the proceeds of sale of the John Court property net of 11a) above (the contracted purchase price for the Spring Rise property) to be paid into the Supreme Court.
53. Nothing further was then done about this proposal, it would appear from the evidence available to me, until 18 October 2011, when Mr Cain wrote again to the Australian
Government Solicitor, headed “Davis Samuel v Commonwealth o[sic] Australia, 11
John Court, Albury in NSW”, this time reciting paragraphs 2 and 4 of the Consent
Orders and continuing:
I have received an email from a solicitor for the vendor [presumably Mrs Endresz] in the sale of the property for $430,000 requesting that I obtain written confirmation from you that you
will, at settlement, hand over documents which will enable … the Caveat … to be withdrawn
and discharged from the title.
54. The Australian Government Solicitor responded by enquiring for whom Mr Cain acted
and he responded, curiously in view of the above statement, “I act for the vendors”.
55. It is not clear whether the use of the plural is a slip or a reference to the curiously suggested interest of Mr Joszef Endresz in the John Court property as referred to above (at [44]).
The Australian Government Solicitor then wrote, noting that “it is appropriate that the
Commonwealth consider its position and satisfy itself that the consent orders remain
reasonable in all of the circumstances”.
57. The Commonwealth then obtained a further valuation of the property which put a value on the John Court property of $600,000 to $700,000 which, I note, was a range that encompassed the earlier sale price mentioned by Mr Cain.
Mr Cain’s response of 19 January 2012 was that Mrs Endresz and Mr Jozsef Endresz
had “committed to a sale of the property for $430,000 to a couple who were, with their
four children (one of whom had “down [sic] syndrome”), required to move out of their
previously rented home and whom, now, on the strength of the commitment, reside at
11 John Court, Albury”. They had not, however, entered into a contract of sale. He added, “[i]f you intend seeking a variation to the orders then please do so immediately”.
59. This application by the Commonwealth was then made on 25 January 2012: the
application sought to amend the Consent Orders so far as “Haven Hill” was concerned
(order 1(a) of the Consent Orders) and also John Court property (order 2(a) of the
Consent Orders) as follows:1. The Orders of 1 July 2002 be varied by:
1.1 deleting from Order 1(a) ‘at a price not less than $675,000’ and inserting instead ‘at a price not less than market value as determined by a valuer
engaged by the Plaintiff’ and
1.2 deleting from Order 2(a) ‘at a price not less than $430,000’ and inserting instead ‘at a price not less than market value as determined by a valuer engaged by the Plaintiff’.
60. The application was supported by the copies of the copious correspondence. No oral evidence was offered or received.
The Issues
61. I had written submissions from the Commonwealth and from the Opponents and I also heard oral submissions on a number of occasions.
62. From these, it was possible to identify the issues defined for the two applications that are for determination. They were:
1. Did the Court have power to vary the Consent Order?
2. If so, should the Consent Order be varied?
3. Did the Consent Order of 1 July 2002 cease to have any effect when the
final orders were made in 2014?
4. If not, should the Commonwealth be forced to discharge the caveat over the
John Court property such as by mandatory injunction?
63. I shall address each of these issues in turn.
Issue 1 - Power to Vary the Consent Orders
64. Three questions arise in connection with this issue and require to be answered in order to deal with this issue. They concern the nature of the Consent Orders, whether they resulted from or were preceded by a binding contractual agreement between the parties and, whether they could be varied.
65. The first question is as to the nature of the Consent Orders. It appears from the authorities that different considerations as to variation, amendment or revocation of an order apply depending on whether the order is a final order or an interlocutory order. Despite apparent simplicity, the question of which orders are final and which are interlocutory has been the cause of an immense amount of spilt ink.
66. It is now well-known that a final order is one which finally disposes (subject to appeal) of the rights of the parties in an action or existing dispute between them: Licul v Corney (1976) 180 CLR 213 at 225; Re Luck [2003] HCA 70; 78 ALJR 177at 2; [4]. On the other hand, an order made in the course of an action, but which does not conclude the rights of the parties inter se, although it may decide the fate of the particular application in which it is made, is interlocutory: Hall v Nominal Defendant (1966) 117 CLR 423 at 439-440; 443.
67. Interlocutory orders are made in order that the proceedings in which they are made can progress satisfactorily, proceed in accordance with fairness and propriety and protect the interests of the parties during the proceedings. They are classically orders that are of a temporary nature, though acts done under these may effectively be final.
68. It is frequently the case that interlocutory orders, especially interlocutory or interim
injunctions, are expressed to be “until further order”. Just as frequently, they are not;
for example, an order giving directions as to the filing of documents or the like will rarely include the phrase, but are still undoubtedly interlocutory orders. Further, orders that have often been held to be interlocutory (such as an order that proceedings be dismissed for want of prosecution: Endresz v Commonwealth of Australia [2020] ACTCA 48 at [38]) would rarely, if ever, contain that phrase.
69. I noted above (at [7]), that the original freezing order, which was amended or varied by
the Consent Orders, was, in fact, expressed to be made “until further order”. Given
that it was a freezing order, that expression is, of course, always appropriate. Indeed,
in my view, it is always to be implied unless the implication is expressly negatived.70. In my view, the Consent Orders were interlocutory orders. They clearly varied the
original freezing order which used the words “until further order” and there is no reason
why that modification should not be still implied. They were made to protect the
interests of the parties pending the completion of the proceedings.
71. A characteristic of interlocutory orders is their susceptibility to variation or amendment. Campbell J pointed out in Fatimi Pty Ltd v Bryant [2002] NSWSC 750; Aust Tort Reports 81-677 at [227], the historical lineage of that principle as follows:
227 Daniell’s Chancery Practice, 7th edition (1901), page 1369 says:
An interlocutory injunction may be discharged at any time before the trial of the action, and is ipso facto discharged by the dismissal of the action (Bliss v Collins 2 Mer 62, Green v Pulsford (1839) 2 Beav 75 [48 ER 1105].
See also, to similar effect, Seton’s Judgments and Orders, 7th edition (1912),
page 517, Kerr on Injunctions, 5th edition (1914), page 679.
72. Though Daniell was there referring to injunctions, the same applies to all interlocutory orders: Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46. In any event, a freezing order (noted above (at [5]), originally referred to as a Mareva injunction) is, if no longer referred to as an injunction, clearly in the nature of such an order. Further, of even greater antiquity, Jessel MR said in Mullins v Howell [1879] 11
Ch D 763 at 766 that the court had “a sort of general control over orders made on
interlocutory applications”.
This flows in part from what is described as the court’s overriding power to control its
own proceedings, an inherent power long recognised and frequently used: see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 178; R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1988) 18 FCR 389 at 392; Commonwealth v Albany Port Authority [2006] WASCA 185 at [24]-[25].
74. Further, it is accepted that the rationale for freezing orders is that they are a means to protect the processes of the Court; that is the basis for their creation: Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 at 393; [25]-[26].
75. There are some limitations on this power, however, and this second question for this issue is, as with the question of which orders are final and which are interlocutory, complex and fraught.
76. The relevant limitation is based on whether the order was made as the result of a binding contractual agreement between the parties; if so, there is a line of authority, mainly flowing from English authorities, that holds that such orders are not able to be varied or set aside except on the same basis that the court will vary or otherwise interfere with the contract in response to which it has been made: Paine v Hofbauer (1988) 13 NSWLR 193 at 198.
77. This, then, flows on to the next question for this issue of whether the Consent Orders were the product of a binding contract or not. The Opponents say that they were.
78. It is, however, up to the Opponents to present the evidence necessary to show that there was such a contract; mere assertion is insufficient: Four Oaks Enterprises Pty Ltd v Clark (No 2) [2003] TASSC 70; 12 Tas R 125.
79. It is important to distinguish the agreement from a non-binding agreement or merely
the expression of a consent in the sense of “not objecting”: Mentech Resources Pty
Ltd v MCG Resources Pty Ltd [2012] QCA 197 at 3, relying on R D Werner & Co Inc v Bailey Aluminium Pty Ltd at 390-1; Chavez v Moreton Bay Regional Council [2009] QCA 348; [2010] 2 Qd R 299 at 308; [35].
80. The Opponents’ argument seems to be that there had been extended negotiations: “the Defendants commenced negotiations with the Commonwealth in April 2001 and
these negotiations continued until the consent orders were granted 1 July 2002”. I
interpolate that, given that the consent orders were signed by the parties on 26 March 2002 and filed in the Supreme Court Registry on 12 April 2002, that is somewhat of an exaggeration.
81. I do not accept that the length of negotiations converts an agreement into a binding contract. It is to be accepted that a number of cases have made reference to the extent of negotiations, e.g. in Mighty River International Ltd v Mineral Resources Ltd [2020] WASCA 44 at [44], [63].
82. Nevertheless, that was, even in that case, not sufficient in itself to make the orders unalterable. Cases such as Mighty River International Ltd v Mineral Resources Ltd have a disturbing tendency, e.g. at [63]-[68], of slipping between using the terms
“agreement” and “contract”. It is the latter term that is used in the majority of authorities
and this is to be accepted as it is the grounds on which a contract (not any agreement, many of which will not be binding anyway), that is referred to when considering the basis on which any consent orders made in reliance on a contract, may be varied or set aside: Harvey v Phillips (1956) 95 CLR 235 at 243-4; Purcell v FC Triggell Ltd [1971] 1 QB 358 at 353-4; General Credits Ltd v Ebsworth [1986] 2 Qd R 162 at 165.
83. In any event, it is accepted that any agreement that justifies such a limitation on variation or revocation must be binding: Chandless-Chandless v Nicholson [1942] 2 KB 321 at 324; Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185 at 189-90; R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd at 399. Jenkinson J considered
in R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd at 399, that this was “what I take Lord Denning MR to have intended by the expression ‘real contract’ in Siebe
Gorman & Co Ltd v Pneupac Ltd … a legally enforceable agreement, a contract. (And, therefore, an agreement for good consideration…)”.
Additionally, the Opponents submit that the Consent Orders “were not related to the
Court processes”. I reject that submission. The clear purpose of a freezing order is to
protect from dissipation assets that may be required to meet any judgment that a plaintiff obtains. Consent Orders, which were a variation of the freezing orders were precisely related to the court processes; indeed, as noted above (at [74]) this was a basis for their creation.
85. I accept that such orders do not concern the filing or validity or adequacy of documents such as pleadings, the discovery of documents, any access to evidence, including the issuing of interrogatories or subpoenas, or the setting of dates for hearing of applications or the trial, but a freezing order, like an order for security for costs or other interlocutory injunctions that, for example, preserve the subject matter of a trial, is a part, indeed an integral part, of the court processes.
86. The requirements of a contract that is enforceable or binding (and this is the kind of
contract – or, perhaps, agreement – to which the courts refer) are clear. It is echoed
in the cases many a times. See, for example, Hunter v Commonwealth Trading Banks Australia (Unreported, Supreme Court of New South Wales, Young J, 12 June 1985) at 5.
87. There are, as is well-known, basic elements of a contract: an offer, acceptance of that offer, consideration and an intention to create legal relations. The correspondence satisfies me that there was here an offer and acceptance of that offer. The fact that the agreement thereby resulted in a consent order satisfies me that there was an intention to create legal relations in the limited sense that the terms of the agreement would, as with most interlocutory directions, be reproduced as an order of the Court.
88. At issue, however, is the question of consideration. This is certainly an essential
requirement for a binding contract in Australian law: Coulls v Bagot’s Executor and
Trustee Co Ltd (1967) 119 CLR 460 at 495.
89. This issue was simply not addressed directly by the parties and I am unable to discern, in the Consent Orders or the correspondence, any consideration passing to the Commonwealth in the contract that can be said to constitute the basis for the Consent Orders.
90. Dong the best I can, the only conceivable source of consideration passing from Mrs Endresz to the Commonwealth could be some costs that she will bear that the Commonwealth, had it wanted to enforce the ultimate orders and sell the property, would otherwise bear. None were identified, and for all of which I could conceive, provision was made for them in the Consent Orders and, in any event, the Commonwealth would be able to recover them from Mrs Endresz under r 2004 of the Court Procedures Rules 2006 (ACT).
91. Accordingly, I am not satisfied that there was here other than an agreement to facilitate the wishes of the Opponents and the continued protection of the interests of the Commonwealth as evidenced by the original freezing order. There was no contract.
92. Given that the only relevant limitation to varying the Consent Orders that has been raised by the Opponents has not been made out, I am satisfied that the ordinary rule applies, namely that the Court retains power to vary, amend or revoke the Consent Orders.
93. If, however, I am wrong and there was consideration for the agreement leading to the Consent Orders and the consent was not merely an agreement to the variation to meet the wishes of the Opponents to sell the properties, then the third question for this issue is whether there is nevertheless power to vary the Consent Orders.
94. I am satisfied that, even where there has been a binding contract leading to a consent order, there are circumstances where a Court has power to amend that consent order. One is where the contract underlying the consent order could itself be set aside: Attorney-General v Tomline (No 2) (1877) 7 ChD 388; Harvey v Phillips. The Commonwealth has not relied on this ground. On the material before me, I find it difficult to see any obvious such basis, though I make no final finding on it.
95. The second is, of course, where the parties agree to the amendment or revocation: Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd (1976) 15 ACTR 45.
96. These proceedings are a clear indication that there is no agreement to a variation.
97. There is, however, a third basis. I am satisfied that, despite the absence of the two other bases for such variation, amendment or revocation, the Court retains a power to amend a consent order made under a binding contract in the interests of justice: Mullins v Howell; Purcell v FC Triggell Pty Ltd; Willshire v Commonwealth (1976) 9 ALR 325; Neale v Lennox [1902] AC 465. This stems in part from the general power
that court’s jealously guard, namely the need to have control over their own
proceedings, particularly to ensure fairness and justice: Adam P Brown Male Fashions
Pty Ltd v Philip Morris Inc.98. The question of the existence or not of consideration is also a relevant factor raised in the cases in the context of varying consent orders, alleged to be made following a contract. See National Benzole Co Ltd v Gooch [1961] 1 WLR 1489 at 1494.
99. Accordingly, I am satisfied that, if the interests of justice so require, the Court does have power to vary the Consent Orders on the request of the Commonwealth. I address this question below (at [107]-[113]) when considering whether it is in the interests of justice that the Consent Orders ought to be varied as sought.
100. One final argument raised by the Opponents suggested that this Court did not have power to vary the Consent Orders because, it was submitted, the Court Procedures Rules 2016 (ACT) did not give this Court a power to do so.
101. This argument was based on a statement made by Kirby P, with whom Hope and Priestley JJA, agreed in Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573 at 578-9. His Honour referred to the suggestion by Priestley JA, with whom Hope and Glass JJA agreed, in Southern Cross Exploration NL v Fire & All Risks Insurance Co
Ltd (1986) 7 NSWLR 319 at 325, that “there was much force” in the arguments which
would limit the application of the principle, decided by the High Court in decisions such a Bailey v Marinoff (1971) 125 CLR 529 and Gamser v Nominal Defendant (1977) 136 CLR 145, that the court does not have any inherent power to vary a perfected order.
His Honour, however, felt constrained by the High Court’s decisions which were binding
and the arguments to the contrary could not be accepted.
102. Kirby P, after noting this comment, pointed out that any such constraint on the power of amendment was, however, overridden by the express power in the Supreme Court Rules 1970 (NSW), His Honour then referred to a number of English authorities, especially those which expressed a constraint on the amendment of a consent order made pursuant to a contract, as well as some comments in a NSW decision, and continued:
To the extent that any of these decisions suggest that this Court loses the discretion which is expressly conferred upon it by the rules, I would disagree. The rules amount to delegated legislation. They are made, ultimately, with the authority of Parliament. The agreement between the parties may or may not give rise to private causes of action in contract for a breach. The terms of that agreement may or may not, in the particular circumstances, be
relevant to the exercise of the Court’s discretion conferred by the rules. To the extent that
an order is made pursuant to a contract, that contract may, in turn, impliedly incorporate the power under the rules to vary the order, as the justice of the particular case may require. However all that may be, it is not possible for the parties, by their agreement, to exclude that jurisdiction which Parliament has expressly conferred upon the Court. This is a jurisdiction, as Priestley JA pointed out in Southern Cross, expressed in the widest terms. It clearly entrusts a broad discretion to the Court.
103. The Opponents submitted that there was no rule of this Court that authorised such amendment, unlike NSW. As a result, they submitted that the Court had no power to make such amendment.
104. The difficulty with this submission, however, is that, as the Commonwealth submitted, it is not the case that such a power has to be found in the Rules of Court. This Court is a superior court of record and has all the powers of such a court: Tait v The Queen (1962) 108 CLR 620 at 623. The statements referred to above (at [97]), as to the
Court’s power to control its own proceedings are a confirmation of this inherent power.
105. The constraints decided by the High Court, as referred to earlier (at [101]), are part of the law surrounding that inherent jurisdiction. A principal difference between cases such as Bailey v Marinoff and Gamser v Nominal Defendant and this case, is that the former cases involve decisions where the proceedings had been dealt with to finality, though in one case by being dismissed for want of prosecution. This case is concerned with an interlocutory order which is of a quite different character and, indeed, is usually
made expressly, or, if not, is to be implied, that it is made “until further order” which
implicitly permits variation, amendment or revocation.
106. Despite the absence of a specific rule in the Court Procedures Rules, I am satisfied that this Court has clear power to vary the Consent Orders in accordance with higher authority, including in the High Court, namely that the Court, as a superior court of record, has power to control its own processes by, inter alia, varying, amending or revoking interlocutory orders such as the Consent Orders.
107. The evidence was that Mrs Endresz wished to rely on the literal terms of the Consent Orders to sell the John Court property for the minimum price specified in the Consent Orders, notwithstanding that, not only was she aware that the market value substantially exceeded that (nearly doubling it) but also that she had already had a buyer at that market price. Indeed, Mr Cain suggested in the correspondence that the price of $700,000 could be improved upon. Thus, a sale at $430,000 is not a genuine sale at market value.
108. The Commonwealth further submitted that this proposed sale was likely to dissipate the assets that were, in fact, intended to be protected by the freezing order, though varied. It was further submitted that, if Mrs Endresz genuinely thought that she owned
the property and would succeed in her defence of the Commonwealth’s principal claim
to it, then she would not sell at such a substantial undervalue. It was submitted further that this was evidence of her belief in the dishonest source of the funds used to purchase the property in the first place, an argument that I find powerful.
109. In my view, the interests of justice, which include the need to protect the legitimate interests in recovery of its misappropriated property by the Commonwealth, favour the amendment of the Consent Orders.
110. The Commonwealth further pointed out, as noted above (at [38]), that the initial approach of Mrs Endresz when exploring the question of variation of the original
freezing order to permit the sale was expressly to enable a sale “at market value”. The expression in the Consent Orders of “not less than”, placed before the then assessed
market value, was not only consistent with this expressed intention but may be said to
embody it.111. The basis for a variation of a consent order of a substantive nature is that there has been a material change in circumstances since it was made: Brimaud v Honeysett Instant Print Pty Ltd at 46. In a careful review of the authorities, Gray J in Notaras v St George Bank Ltd [2005] ACTSC 5; 157 ACTR 1 at 9-11; [19]-[20], considered that this was not an absolute requirement, though one that an applicant would risk some peril at not raising, and that the overriding consideration was the interests of justice, a consideration also mentioned in Brimaud v Honeysett Instant Print Pty Ltd at 47.
112. In my view, the passage of time without a sale, despite the initial clear intimation that it was to be sought to proceed proximately to the correspondence and any consent of the Commonwealth, and the fresh valuation of the John Court property do constitute a material change in circumstances, insofar as that is required. The increase in the value is clearly so substantial as to be very significant and makes the context of the original arrangement made having regard to market value, highly relevant.
113. In this case, the risk of dissipation of interests claimed by the Commonwealth against
which the freezing order was designed to protect the Commonwealth’s interests are
very relevant to the interests of justice. Indeed, in my view, the fact that Mrs Endresz had an earlier sale at market value and chose instead to rely on a literal reading of the Consent Orders for a purely charitable reason, is sufficient to meet the requirements of justice such as to justify the making of the proposed variation.
114. While the latter reasoning does not apply absolutely equally to the proposed variation
in relation to “Haven Hill”, the same amendment ought, in the interests of justice, be
made. The Opponents’ submitted no specific argument to the contrary.
115. In the result, my conclusion on the first issue is that the Court does have power to vary the Consent Orders if sought by the Commonwealth even if opposed by the Opponents.
Issue 2 - Whether the Variation Sought Should be Made?
116. A few months prior to the making of the Consent Orders the John Court property had been valued for market value, since this was the price at which Mrs Endresz was proposing to the Commonwealth in requesting consent to the sale and, indeed, that was the basis for the minimum sale price set out in the Consent Orders. That this was not translated into the Consent Orders in those terms, but the specified minimum price, set in reliance on the valuations of the market value of the property instead of referring
simply to “market value”, was set in the knowledge of all parties that the price was the
market value set by the valuations.
117. Following the request from Mr Cain, seeking agreement of the Commonwealth to withdraw the caveat, the Commonwealth, unable to get relevant information from Mrs Endresz, arranged for a further valuation to be prepared. As noted above (at [57]), this valuation assessed the value of the property as between $600,000 and $700,000.
118. I have set out above (at [44]-[58]) some of the relevant discussions in the correspondence between the parties over the prospective sale and do not need to repeat them, save to identify those facts that are particularly relevant to the issue.
119. I do not need to consider whether this would have, in the circumstances, given the Commonwealth a valid claim for rectification of any contract leading to the Consent Orders. It seems doubtful, but is relevant to an understanding of the factual situation.
120. The request in 2010 was then made and, when the Commonwealth sought some conditions and obtained a valuation, Mrs Endresz then resiled from the original sale and decided to sell, apparently from charitable motives, for much less than the market value.
121. For the reasons outline above (at [107]-[113]), I find that it is in the interests of justice that, were I required to do so, I would vary the Consent Orders as sought by the Commonwealth.
Issue 3 - Ceasing of the Effect of the Consent Orders
122. At the hearing on 11 May 2016, the Commonwealth submitted that, as the final judgment in these proceedings making the final orders disposing of the proceedings had been delivered on 21 November 2014 (Commonwealth v Davis Samuel Pty Ltd (No 8)), the Consent Orders had no longer any effect as the final judgment had subsumed them.
123. It is clear that this is the normal situation as explained by Daniell, as I noted above (at [71]). This assumes, as I have found, that the Consent Orders were interlocutory orders
in respect of which the limitation of “until further order” is implied. As Walters J
explained in Charisteas and Charisteas [2015] FCWA 15 at [217]:
Interlocutory injunctions in this form are intended to operate until the rights of the parties have been determined by the making of orders disposing of the substantive proceedings: see Millar & Millar (1983) 9 Fam LR 5; Attorney-General (Cth) v Davids Holdings Pty Ltd [1993] ATPR 41-247.
124. To the same effect were comments made by McColl and Campbell JJA and Sackville AJA in Klewer v Official Trustee in Bankruptcy (No 2) [2010] NSWCA 258 at [6].
125. A gloss was given to this construction in Fatimi Pty Ltd v Bryan at [233]:
233. It is, of course, possible for a Mareva Order to continue in force after judgment has been obtained, if there are reasons to fear that assets of a judgment debtor might be dissipated, and execution thereby frustrated: Balfour Williamson (Australia) Pty Ltd v Douter Luingner (1979) 2 NSWLR 844. However, in that case it is usual to make an express order at the time of judgment, that the Mareva Injunction continue in force in aid of execution (Stewart Chartering Ltd v C & O Managements SA [1980] 1 All ER 718 at 719, per Robert Goff J; Devlin v Collins (1984) 37 SASR 98 at 99 per King CJ, 105 per Zelling J, 116 per White J; Deputy Commissioner of Taxation v Winter (1988) 92 FLR 327 at 329-330 per Yeldham J).
126. In this case, despite there being some amendments to the final orders made in these proceedings (see Commonwealth of Australia v Davis Samuel Pty Ltd (No 9); Commonwealth of Austrlaia v Davis Samuel Pty Ltd (No 10)), neither party sought an extension of the freezing order or the Consent Orders. I have no direct knowledge but assume that the Commonwealth did not do so as its interests were protected by the caveats it had lodged.
127. The final orders made recognised the Commonwealth’s interest in the property and would “enable it appropriate recovery”: Commonwealth of Australia v Davis Samuel
Pty Ltd (No 8) at [424].
By this order, Mrs Endresz’s interests in the John Court property became subject to the
Commonwealth’s interests and this would prevent her from selling the property without
the Commonwealth’s consent.
129. As to “Haven Hill”, the Commonwealth elected not to trace the funds to which it laid
claim in the proceedings to “Haven Hill”: Commonwealth of Australia v Davis Samuel
(No 8) at [46]. Accordingly, there would be no basis for a continuation of the freezing order in those circumstances. There may, of course, be a case for other enforcement proceedings to recover judgment sums payable to the Commonwealth from Mr Allan Endresz and Mrs Joy Endresz. That might have entitled the Commonwealth to continue the Consent Orders.
130. No such continuation, however, was sought in relation to either property. Accordingly, I find that the freezing order and the Consent Orders were discharged by the final orders and, accordingly, there is no occasion for the Consent Orders to be amended or varied now and they have, along with the original freezing order, been discharged by the final orders.
Issue 4 - Should the Caveat on the John Court Property be Lifted?
131. The application for removal of the caveat is now complicated by the findings I have made.
132. The basis for the application was not, as might be expected, that Mrs Endresz wished to sell in accordance with the Consent Orders and that since they gave her that authority to sell, the Commonwealth had no authority to prevent it.
133. This reasoning was not articulated in the written submissions supporting the oral
application. Rather the basis was that the Commonwealth “no longer has a proprietary
interest in the property”.
134. This was based on an assertion that the Australian Securities and Investments
Commission (ASIC) has “accepted that the $6m was company money and not money held as trust for CTC Resources NL”(emphasis in original). No citation of any curial
proceedings to that effect nor any other evidence to that effect was given.
135. Mrs Endesz submitted that this was an admission made on behalf of the Commonwealth. This was based on the assertion that ASIC was an agent of the
Commonwealth. Reliance was placed on the High Court’s decision in Australian
Securities and Investments Commission v Edenson Nominees Pty Ltd [2001] HCA 1; 204 CLR 559 at 580-584; [39]-[47], which held that ASIC was included in the term
“Commonwealth” in s 75(iii) of the Constitution.
136. While I am, of course, bound by that decision, I am by no means convinced that it meant that admissions made by ASIC in litigation bound the Commonwealth in other litigation.
137. Assuming, however, for the moment, that it does, I had no details of the alleged admission and, without that, I cannot determine what effect it has. I note that the alleged admission was said to have been made in 2005, well before these proceedings were heard, yet it played no part in the proceedings and was not relied on by the
defendants to defend the Commonwealth’s claim.
138. Accordingly, I am not satisfied that, even were such an admission to have been made, it would prove that the funds paid to CTC Resources NL was not subject to a trust arising from its knowing participation in the breach of fiduciary duty by Mr David Muir and Callform Pty Ltd. I would need to know the details of such alleged admission and the context in which it was allegedly made for me to be satisfied that it binds the parties.
139. In any event, that was not the finding in the judgment in these proceedings, which now binds the parties unless set aside, for example, on appeal. Thus, the Commonwealth
has an equitable interest in the John Court property. I made a declaration that “The
Eighth Defendant acquired the John Court Property on trust for the Plaintiff”. This is
sufficient interest to support a caveat: Cacek v Cacek [1979] VR 385. See also Hayes
v O’Sullivan [2001] WASC 55; 24 WAR 40 at 47-9; [32]-[43].
140. Of course, a mere judgment debt does not support a caveat as it is no caveatable interest: Hall v Richards (1961) 108 CLR 84 at 93-4. That, however, is not the present situation.
141. Accordingly, I dismiss the application for removal of the caveat which may have already been withdrawn as the Commonwealth was proposing to sell the John Court property shortly after judgment.
Costs
142. It seems to me that an application such as that of the Commonwealth for the variation of the Consent Orders would require an order that the costs be costs in the cause.
143. While there were written submissions, that were reasonably extensive, all the hearings for both applications occurred in conjunction with hearings concerning other applications.
144. While I will formally dismiss the Commonwealth’s application, it did obtain interim relief
(see at [18]) which was of some value to it and this dismissal is not so much on the merits, for I would have made the orders sought if they had any ongoing utility, but, because of the change of circumstances, particularly the making of final orders, it rendered the application moot.
145. The application by Mrs Endresz was dismissed also. While there may have been a basis for it, had a genuine sale been effected and the Commonwealth had refused to remove the caveat to allow it to proceed, that was not the situation. Nevertheless, it
occupied little of the Court’s time, no relevant written submissions of the
Commonwealth, other than those supporting its application and little by way of oral hearing.
146. In all the circumstances I consider that there should be no order as to costs. I shall, accordingly, make that order unless any party applies by written submissions within 14 days for any other order.
Delay
147. I regret the delay in delivering this decision. When I rejected the application to set aside judgment (Commonwealth of Australia v Davis Samuel Pty Ltd (No 11)), I assumed that this was the end of the matter, since it had brought the Consent Orders to an end, as I have found above (at [130]).
148. It was not until the Law Society of the ACT approached the Court that I understood that this was not an assumption shared by the parties. As is clear from these reasons, the ultimate result is that the final judgment did, in fact, have this effect. It seemed that the best approach, however, was to address the issues and show the reasoning leading to that result and I have done so.
149. Since there was no oral evidence, but only printed evidence and written submissions and since I had copies of the relevant transcripts of the hearings, I have carefully read the evidence, the submissions and the transcript in preparing this judgment.
150. These resulted in a good recall of the proceedings and the case as presented to me.
151. The delay is unfortunate and regrettable and I apologise for it. No oral or written evidence was admitted at any time during these extended proceedings of any adverse effect on the interests of any party. Accordingly, I do not think that it has, in this event, adversely affected the interests of justice for any party. I certainly hope that I am right in this conclusion.
I certify that the preceding one hundred and fifty one [151] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Refshauge.
Associate: Samuel Xiang
Date: 20 November 2020
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