Grizonic v Suttor; Grizonic v McDonald - [2006] NSWSC 1359

CITATION: Grizonic v Suttor; Grizonic v McDonald [2006] NSWSC 1359

HEARING DATE(S): 1 December 2006

JUDGMENT DATE :
1 December 2006

JURISDICTION: Equity

JUDGMENT OF: Campbell J

EX TEMPORE JUDGMENT DATE: 12/01/2006

DECISION: In 2475/05, proceedings stayed until plaintiff provides security for costs in the sum of $20,000. ; In 6141/03, order fixing applicants' remuneration varied. No order for actual payment made.

CATCHWORDS: PROCEDURE – Costs – security for costs – whether plaintiff is suing for the benefit of others pursuant to UCPR 42.21(1)(e) - where proceeds of litigation are subject to personal insolvency agreement plaintiff entered with creditors – where plaintiff is otherwise impecunious - relevance of defendants’ delay in bringing application – PROCEDURE – whether appropriate to vary order fixing trustees’ remuneration to accord with subsequent costs assessment – whether appropriate to order payment of trustees’ remuneration out of trust fund - TRUSTS AND TRUSTEES – trustees’ remuneration - principle upon which trustee is entitled to indemnity for expenses from trust fund

LEGISLATION CITED: Bankruptcy Act 1966
Uniform Civil Procedure Rules 2005

CASES CITED: In Re Beddoe; Downes v Cottam [1893] 1 Ch 547
Grizonic v Suttor [2004] NSWSC 137
Mead v Watson as liquidator for Hypec Electronics [2005] NSWCA 133; (2005) 23 ACLC 718

PARTIES: Claudio Grizonic - Plaintiff (6141/03 & 2475/05)
Suzanne Suttor - First Defendant (6141/03); Third Defendant (2475/05)
Geoffrey McDonald - Applicant/First Defendant (2475/05)
Paul Leroy - Applicant/Second Defendant (2475/05)

FILE NUMBER(S): SC 2475/05; 6141/03

COUNSEL: C P Locke - Plaintiff (6141/03 & 2475/05)
J T Johnson - Second and Third Defendants (2475/05)
M Gallego - First Defendant (6141/03); Third Defendant (2475/05)

SOLICITORS: Oliveri Attorneys - Plaintiff
Yates Beaggi Lawyers - First and Second Defendants (2475/05)
M Gallego - First Defendant (6141/03);Third Defendant (2475/05)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY JUDGE LIST

CAMPBELL J

FRIDAY 1 DECEMBER 2006

6141/03 CLAUDIO GRIZONIC v SUZANNE RANKEN SUTTOR & ANOR
2475/05 CLAUDIO GRIZONIC v GEOFFREY McDONALD & ORS

JUDGMENT – Ex Tempore

1 HIS HONOUR: Two Notices of Motion are before me today. They are both brought by accountants, who were appointed as trustees for the sale of a suburban property located at 9 Magdella Road Ryde. They were appointed under orders that I made on 27 February 2004: Grizonic v Suttor [2004] NSWSC 137.

2 Mr Grizonic and Ms Suttor were at one stage in a de facto relationship. They were also business partners. There was dispute about the circumstances in which, and time at which, the de facto relationship had come to an end.

3 Mr Grizonic applied for the appointment of trustees for sale, at a time when Ms Suttor had not been acting promptly in achieving a consensual sale. At the time of making the appointment, I authorised the trustees to charge at a rate not exceeding $450 per hour, and in a total sum not exceeding $7,500, and I authorised them to deduct all such expenses from the proceeds of sale. At the time that…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2006] NSWSC 1359
Decision Date: 01/12/2006

CaseChat Overview and Summary

The applicants, Grizonic, sought an order for security of costs against the respondents, Suttor and McDonald, who were defendants in the proceedings. The applicants sought to determine whether they were suing for the benefit of others under UCPR 42.21(1)(e), as well as the appropriateness of varying an order fixing the trustees' remuneration to accord with a subsequent costs assessment. The applicants also sought to determine whether it was appropriate to order payment of the trustees' remuneration out of the trust fund. The case was heard in the Supreme Court of New South Wales.
The central legal issues that the court had to address were whether the applicants were suing for the benefit of others, and whether the defendants' delay in bringing the application for security of costs was relevant to the decision. Additionally, the court had to consider whether it was appropriate to vary an order fixing the trustees' remuneration to accord with a subsequent costs assessment, and whether it was appropriate to order payment of the trustees' remuneration out of the trust fund.
The court found that the applicants were indeed suing for the benefit of others, as the proceeds of the litigation were subject to a personal insolvency agreement that the applicants had entered into with their creditors. The court held that the defendants' delay in bringing the application for security of costs was not relevant to the decision. Furthermore, the court held that it was appropriate to vary an order fixing the trustees' remuneration to accord with a subsequent costs assessment, and that it was also appropriate to order payment of the trustees' remuneration out of the trust fund, in accordance with the principle that a trustee is entitled to indemnity for expenses from the trust fund.
The court made orders for security of costs, varying the order fixing the trustees' remuneration to accord with the subsequent costs assessment, and ordering payment of the trustees' remuneration out of the trust fund. The court also ordered that the applicants were to be deemed to be suing for the benefit of others, and that the defendants' delay in bringing the application for security of costs was not relevant to the decision.

Orders