Hammerton v Gleeson - [2009] SASC 79

SUPREME COURT OF SOUTH AUSTRALIA
(Applications Under Various Acts or Rules: Civil)
HAMMERTON v GLEESON
[2009] SASC 79
Reasons for Decision of The Honourable Justice Sulan
31 March 2009
PROCEDURE - COSTS - SECURITY FOR COSTS
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PARTIES - JOINDER OF PARTIES
REAL PROPERTY - GENERAL PRINCIPLES - INCIDENTS OF ESTATES AND INTERESTS IN LAND - JOINT TENANCY AND TENANCY IN COMMON - INCIDENTS - JOINT TENANCY
Third party application to lift charging order over property of which she and husband are joint tenants - order made by a Master of Supreme Court as security for costs subject of consent allocatur entered into by husband - Master refused third party's application - appeal and fresh application to Supreme Court Justice - whether third party has an interest in action by vitue of holding a joint tenancy to which charging order attaches - whether charging order prejudiced third party - whether any legal basis to set aside charging order over property jointly held where one owner only is the subject of that order.
Held: for limited purposes of challenging charging order third party an interested party under the Rules - appeal and application dismissed - charging order does not affect third party's interest in the jointly held property - charging order does not affect any unities of joint tenancy - court may make charging order over jointly held property where only one owner of the property is the subject of the order.
De Facto Relationships Act 1996 s 9; Enforcement of Judgments Act 1991 s 5, s 8; Supreme Court Civil Rules 2006 r 89, referred to.
Andersons Solicitors v Schigulski [2004] SASC 21, applied.
H v G [2005] SASC 344, considered.

HAMMERTON v GLEESON
[2009] SASC 79
Civil

SULAN J: This is an application by Dr Marmanidis, the wife of the appellant, Dr Hammerton, to intervene in these proceedings for the purpose of appealing a Master’s refusal to lift a charging order made against property jointly owned by Dr Marmanidis and Dr Hammerton.
Background
Proceedings were instituted between Dr Hammerton and his former de facto partner, Ms Gleeson in 2004 and tried in the District Court. The respondent, Ms Gleeson, the plaintiff before the District Court, instituted proceedings against Dr Hammerton, the defendant at first instance, pursuant to s 9 of the De Facto Relationships Act 1996, following the break down of their relationship. On 8 October 2004, judgment was entered for the plaintiff. That judgment included an order that Dr Hammerton pay Ms Gleeson her costs of the action to be taxed, if not agreed, on a party-party basis. On 21 October 2004, Dr Hammerton instituted an appeal to the Full Court of this Court. Ms Gleeson cross-appealed. The appeal and cross-appeal were dismissed on 14 September 2005[1] and, on 21 October 2005, the Full Court made the following orders:
1That the appellant do pay 75% of the respondent’s costs of appeal and cross appeal to be taxed.
2By 5 pm on Monday 24/10/05 the appellant advise the respondent’s solicitor in writing (1) of the name and (2) of the number of the account to which the moneys previously held in the Bank SA Billflex account were deposited and the amount so transferred.
3Until final orders of the District Court with respect to costs are made, that the appellant be restrained from in any way dealing with an amount of money equivalent to that which was so transferred from the said Bank SA Billflex account and which is deposited in the joint account which is advised pursuant to paragraph 2 of this order.
[1] H v G [2005] SASC 344.
Pursuant to the Full Court’s orders, Ms Gleeson lodged a Bill of Costs for taxation on 1 May 2006, which claimed costs of about $37,000. On 13 June 2006, Dr Hammerton’s solicitors filed a Notice of Dispute to that bill. On 4 September 2006, a Master of this Court directed that the taxation of the bill proceed on 4 October 2006.
It is convenient to mention that a separate Bill of Costs for taxation had also been lodged on Ms Gleeson’s behalf in the District Court, pursuant to the judgment of that Court. There has been a major issue in that taxation about substantial disbursements claimed by Ms Gleeson for the fees of accountants she employed. The present application and appeal is concerned only with the Bill of Costs arising from the order of the Full Court on 21 October 2005.
Dr Hammerton is seeking to have the Full Court re-open the appeal. This is a separate but related issue to the present application and appeal, which I will discuss in more detail shortly.
On 4 October 2006, solicitors for both Dr Hammerton and Ms Gleeson attended before Master Lunn. In consequence of discussions that had taken place between the solicitors in late September, an offer had been put on behalf of Ms Gleeson that she would accept $30,000 for the costs, inclusive of interest. That offer was accepted by Dr Hammerton. The parties agreed that those monies should be paid from the Bank SA Billflex account referred to in the orders of the Full Court. As a result, Master Lunn made the following orders:
1By consent allocatur to issue in sum of $30,000 inclusive of interest on the respondent’s bill of costs FDN 18.
2By consent para 3 of order of 21/10/05 be varied to permit payment of the allocatur of $30,000 out of the account referred to in that order.
Dr Hammerton was present in Court when the orders were made. As at 27 June 2007, the monies had not been paid.
On 23 May 2007, Dr Hammerton filed a Notice of Acting in Person.[2] He has since represented himself, but for a short period when he was represented by counsel. On 4 June 2007, he filed an affidavit and application seeking to have the consent allocatur revoked and the orders of the Full Court varied to release all the funds restrained by the order of the Full Court to himself and Dr Marmanidis.[3] A hearing took place before Master Lunn on 27 June 2007, in which Dr Hammerton and Mr Cogan, Ms Gleeson’s solicitor, were cross‑examined on the respective affidavits they had filed in relation to the application. Master Lunn accepted Mr Cogan’s evidence. He accepted that the offer of $30,000, all inclusive, that Mr Cogan had put to the solicitor then representing Dr Hammerton’s interests had been accepted and that the agreement was accurately reflected in the terms of the orders of 4 October 2006.
[2] Notice of Address for Service for Acting in Person, FDN 22.
[3] Affidavit of Michael Edward Hammerton, sworn 4 June 2007, FDN 25 and Exhibit FDN 25a.
Dr Hammerton conceded that he instructed his then solicitor to accept the offer put by Mr Cogan. He submitted, however, that he would not have given those instructions if he had known then what he had since learnt from documents disclosed in the course of the District Court taxation. This refers back to the dispute concerning the professional accounting fees claimed and Dr Hammerton’s related application to have the orders of the Full Court re-opened on the basis that the Full Court judgment and orders were made in ignorance of, what Dr Hammerton submits to be, vital evidence. Master Lunn rejected Dr Hammerton’s submissions, and refused to set aside the allocatur.[4]
[4] Reasons of Judge Lunn, FDN 29, [7]-[8].
Master Lunn observed that Dr Hammerton “belatedly” asserted that his understanding of the agreement reached by the parties on 4 October 2006 was that, once the $30,000 sum of the consent allocatur had been paid out of the Bank SA Billflex account, the balance of the funds in that account would be released to himself and Dr Marmanidis. Master Lunn rejected that contention.[5] He accepted the evidence of Mr Cogan that there was never any discussion about the release of the balance of the funds, and there was no such agreement about their release. He concluded that there was no basis to invoke the discretionary jurisdiction of the Court to set aside the consent allocatur, as it had not been shown that there had been any miscarriage of justice in the allocatur being entered for the amount of $30,000.[6] Accordingly, Master Lunn dismissed the 24 May 2007 application.
[5] Ibid [10].
[6] Ibid [11].
In the same proceedings, Master Lunn also dealt with an application made on 24 May 2007 on behalf of Ms Gleeson, pursuant to s 5 of the Enforcement of Judgments Act 1991. Ms Gleeson sought an order requiring Dr Hammerton to pay the amount of the allocatur of $30,000, plus interest at the rate of 6.5 per cent per annum from 4 October 2006 until the date of payment.[7] In respect of that application, Master Lunn observed as follows:[8]
Usually an order under s 5 is conditional upon the Court having first conducted an investigation of the debtor’s affairs under s 4 of the Act, but under s 5(2)(b) the order can be made if the Court “is satisfied that there are, in the circumstances of the case, proper reasons for dispensing with such an investigation”. I am satisfied that there are good reasons for dispensing with the investigation in this case. The affidavits and oral evidence in this matter show that there is a joint bank account in the names of the appellant and his present wife in which there is at present approximately a credit of $80,000. This is the account referred to in the Order of the Full Court quoted above. The common intention of the parties was that money in this account should be used to satisfy the consent allocatur. This is reflected in paragraph 2 of the consent order made on 4 October 2006. It was implicit in that order that the appellant would make available the moneys in that account for the payment of the allocatur. This is sufficient to dispense with an investigation under s 4 of the Act and to justify an order under s 51(1)(a) of the Act that the appellant immediately pay the $30,000 and accrued interest to the respondent.
He further noted:[9]
If the appellant does not pay this money to the respondent, she may then take further proceedings under s 5(5) of the Act. It is at that stage that the Court will then consider whether the appellant has failed to make that payment “without proper excuse”. This may raise questions of whether the appellant’s wife has to authorise any payment out of the account, but those questions are not relevant to whether an order should be made under s 5(1).
[7] Interlocutory Application, filed 24 May 2007, FDN 23.
[8] Ibid [15].
[9] Ibid [16].
Presumably on the basis that Dr Hammerton is seeking to re-open and challenge the orders of the Full Court on which the orders for the payment of costs were made, the amount of the consent allocatur remains outstanding as at April 2008. On 17 April 2008, Mr Cogan, on behalf of Ms Gleeson, made application for a charging order in respect of the amount of the allocatur.[10] The application was supported by an affidavit sworn by Mr Cogan in which he deposed that the property over which the charging order was sought was land jointly held by Dr Hammerton and Dr Marmanidis, as registered proprietors, they having become the registered proprietors on 18 October 2006.[11]
[10] Interlocutory Application, filed 17 April 2008, FDN 33.
[11] Affidavit of Timothy Nicholas Cogan, sworn 17 April 2008, FDN 34 and Exhibit 34a.
Mr Cogan sought to have the charging order made ex parte, with Dr Hammerton to be given the opportunity to be heard on a later date, in the event that the charging order was made. He did so for the following reasons, to which he deposed in his affidavit:[12]
The purchase price of the said land is noted as having been $980,000.00. As it appears that the appellant has not paid the respondent, despite having had sufficient funds to do so, I am concerned that there is a risk that the appellant might take steps to divest himself of his interest in the said land if this application is served on him prior to a charging order being made. Further, as there appears to be no mortgage over the said land, an immediate transfer of the appellant’s interest in the said land is possible.
The respondent therefore seeks an order that this application be heard without it being served on the appellant and that, if a charging order is made, the application be adjourned to a date when the appellant can be heard on the question of whether or not the charging order should remain in force.
[12] Ibid, [6] – [7].
The matter was heard ex parte by a Master on 9 May 2008. The Master recorded that he was satisfied that the orders sought on behalf of Ms Gleeson should be made on the ex parte application, and a charging order in the following terms was made:[13]
[13] Order of Judge Burley made 9 May 2008, FDN 35, [1] – [4].
1.Until further order, the property of the appellant being all the estate and interest of the appellant in the land comprised in Certificate of Title Register Book Volume 5974 Folio 91 be charged with the payment of the amount of the allocatur issued in favour of the plaintiff on 4 October 2006 and interest accruing thereon under the Supreme Court Civil Rules 2006 and costs and stamp duty together with costs payable under any future orders for costs and the costs of registration and withdrawal of the charge at the Lands Titles Office (“the judgment debt”).
2.The respondent be authorised to make this application without notice to the appellant.
3.This charge will remain in force until:
3.1     The judgment debt is paid in full;
3.2     A memorial of the discharge of this charge is entered on the Certificate of Title to the land hereby charged under paragraph 6 of this Order, whether or not payment has been made in full; or
3.     The Court orders that this order be discharged;
whichever shall first occur.
4.The appellant is prevented from dealing with the land hereby charged whilst this charge remains in force.
…
On 2 June 2008, Dr Marmanidis sought an ex parte hearing for the discharge of the charging order made on 9 May 2008.[14] The application was supported by affidavit in which Dr Marmanidis contends that, as a joint registered proprietor of the land over which the charging order had been made, she has been adversely affected by the order.[15] Dr Marmanidis was not then and is not now a party to the proceedings. Nevertheless, her application was listed before a master for 3 June 2008.
[14] Notice for Specific Directions, filed 2 June 2008, FDN 36.
[15] Affidavit of Michael Edward Hammerton, sworn 2 June 2008, FDN 37 and Exhibit 37a.
The Master held that the charging order did not legally affect the interests of Dr Marmanidis as the co-proprietor of the land in a manner such that she could apply to discharge the charging order. He dismissed her application. Dr Marmanidis appeals against the dismissal of her application.[16] Dr Marmanidis’ central complaint is that the Master had erred in holding that the charging order did not affect her interests in the land.
[16] Notice of Appeal, filed 3 June 2008, FDN 40.
Dr Hammerton’s and Dr Marmanidis’s applications
When this matter was listed before me on 5 February 2009, I reviewed the documentation which had been filed by Dr Marmanidis, being the Notice for Specific Directions following the making of the charging order,[17] and the Notice of Appeal against the Master’s refusal to lift that charging order.[18] I concluded that, in the interests of resolving Dr Marmanidis’ complaint, the Notice for Specific Directions should be treated as an application by her to intervene in the proceedings, pursuant to r 89 of the Supreme Court Civil Rules 2006 (SA) (“the Rules of Court”). I further indicated that I would hear the application to intervene together with her appeal on 17 March 2009. On 13 March 2009, Dr Marmanidis filed a further application seeking that the charging order be set aside.[19] This application was supported by an affidavit.[20] I shall deal with Dr Marmanidis’ application of 13 March 2009 at the same time as I deal with her appeal from Master Lunn’s order of 3 June 2008.
[17] FDN 36.
[18] FDN 40.
[19] Interlocutory Application, filed 123 March 2009, FDN 47.
[20] Affidavit of Michael Edward Hammerton, sworn 13 March 2009, FDN 48.
The application to intervene
Rule 89 provides:[21]
[21] Supreme Court Civil Rules 2006 (SA), r 89.
89 – Non-party intervention
(1)The Court may, on application by a person who wants to intervene in an action, permit intervention on conditions determined by the Court.
(2)An application for permission to intervene must be supported by an affidavit stating –
(a)     the nature of the applicant’s interest in the action (which need not be a legal or equitable interest); and
(b)     the applicant’s object in seeking permission for intervention; and
(c)     the extent of the proposed intervention.
(3)A copy of the application and the supporting affidavit must be served on all parties to the action.
(4)The Court may permit intervention on conditions it considers appropriate.
(5)The Court may, on application or on its own initiative, vary or revoke an order allowing non-party intervention under this rule.
I am satisfied that Dr Marmanidis has an interest in the action arising from her holding a joint tenancy in the land the subject of the charging order. Dr Marmanidis seeks to intervene in these proceedings because she contends that the charging order unduly and adversely affects her interests in the land as a co‑proprietor. Accordingly, I am satisfied that there is a proper basis to grant Dr Marmanidis permission to intervene for the limited purpose of pursuing both her appeal against the refusal to lift the charging order and her more recent application to lift that order.
The appeal against the refusal to lift the charging order and the further application
Section 8 of the Enforcement of Judgments Act 1991 provides:[22]
[22] Enforcement of Judgments Act 1991 (SA), s 8.
8 – Charging orders
(1)A court may, on application by a judgment creditor, charge property of a judgment debtor with a judgment debt or part of a judgment debt.
(2)Where the court makes an order under subsection (1), it may make ancillary or consequential orders –
(a)     requiring registration of the charge; or
(b)     prohibiting or restricting dealings with the property subject to the charge; or
(c)     providing for the sale of the property and the application of the proceeds of sale; or
(d)     relating to any other incidental or consequential matters.
In Andersons Solicitors v Schigulski,[23] the plaintiff, a firm of solicitors which had performed legal services for the defendant obtained an allocatur in its favour for the sum of $13,820.24. The allocatur was issued on 6 April 2001. That amount was not paid and, on 17 September 2003, the plaintiff applied for a charging order over land of which Mr Hans Schigulski, the defendant, and Mr Fe Schigulski, who was not a party to the action, were jointly registered as the proprietors. The application made by the plaintiff was that the joint interest of the defendant in the land be charged with the payment of the amount due pursuant to the allocatur, in accordance with the Rules of Court.
[23] [2004] SASC 21.
Mullighan J considered whether a joint interest in registered land may be the subject of a charging order.[24] Mullighan J discussed the nature of joint tenancy. He said:[25]
It is well established that the two principal features of the joint tenancy are the “four unities” and the right of survivorship. These unities are well known as unity of possession, interest, title and time. If one of the unities of interest, title or time is missing, or if there can be no right of survivorship, the co-owners are tenants in common. If unity of possession is absent, there is no co-ownership at all because unity of possession is common to all forms of co‑ownership … even if all four unities are present, it does not necessarily mean that the co-ownership is capable of being a joint tenancy. An important factor is the terms in which the land was conveyed to the co-owners.
In the present case, there is no question that the land is held by the defendant and Mr Fe Schigulski as joint tenants. Consequently, I need only mention briefly the four unities. Unity of possession means that each co-owner is entitled concurrently to possession of the whole of the land. Unity of interest means that the interest of each joint tenant must be the same in nature, extent and duration. Unity of title exists if the co-owners have derived their interests from the same document or act. Unit of time exists if the interest of each co-owner vests at the same time and by virtue of the same event. I mention the requirement of the right of survivorship. Upon the death of a joint tenant, the interest of that joint tenant automatically transfers to the other joint tenant or tenants. There is no issue about these principles. [footnotes omitted]
[24] Andersons Solicitors v Schigulski [2004] SASC 21, [4].
[25] Ibid, [9] – [10].

With reference to s 8 of the Enforcement of Judgments Act 1991, Mullighan J observed:[26]
A charging order pursuant to s 8 does not create an interest in the property of the judgment debtor. It does no more than secure the judgment debt by the making of that order. Upon a charging order being made, the Court may make ancillary or consequential orders requiring registration of the charge, prohibiting or restricting dealings with the property subject to the charge, providing for the sale of the property and the application of the proceeds of sale or relating to any other incidental or consequential matters: s 8(2). In my view, these provisions support the contention that a charging order does not create an interest in property. If it did, that interest could be realised independently and specific orders under s 8(2) would not be required.
[26] Ibid, [12].
Mullighan J held that a charging order can be made over property held jointly when only one of the joint tenants is the subject of a judgment.
Mullighan J observed that a charging order does not create an interest in land for the benefit of the judgment creditor. The order will not destroy any of the unities of the joint tenancy. It will not interfere with survivorship. Second, the charging order does not sever the joint tenancy (although severance may occur if an ancillary or consequential order of sale is made and an application of the proceeds of sale to the judgment is made pursuant to s 8(2) of the Enforcement of Judgments Act 1991). The charging order merely protects the interests of the judgment creditor.
Mullighan J further determined that registration of a charging order does not destroy any of the unities, and severance does not occur at that stage.
I agree with the reasons of Mullighan J as to why it is no impediment to the granting of a charging order that the order is made over land which is the subject of a joint tenancy. Andersons Solicitors is directly on point. I agree with Mullighan J that there is no legal basis for setting aside a charging order simply on the basis that it is made over property jointly held.
Dr Marmanidis has explained to me in some detail the adverse consequences she claims the charging order has had for her, and continues to have for her. The affidavit filed 13 March 2009 contains a lengthy recital of Dr Marmanidis’s grievances about the manner in which she perceives Ms Gleeson, her solicitors and Dr Hammerton’s previous counsel have behaved in the course of litigation. It contains a number of allegations against various people involved in the litigation, none of which are supported by any independent evidence. For the purposes of the present appeal application, these allegations are irrelevant. I make no findings as to the allegations. Those against whom allegations have been made have not been given an opportunity to respond. As I regard the allegations as not relevant, I have not requested a response.
I heard argument from Dr Marmanidis on 17 March 2009. She repeated a number of the allegations made in her affidavit of 13 March 2009. She asserted that the charging order prejudiced her. She complained that the existence of the order had damaged the professional reputation and social standing of both herself and Dr Hammerton. None of the arguments advanced by Dr Marmanidis satisfied me that I should make an order lifting or varying the charging order. Most of her arguments were not relevant to the issue.
Dr Marmanidis claims she is prejudiced in being unable to obtain finance for her practice, as the bank will not lend on the security of the property over which the charging order exists. No evidence was tendered to support the allegation made from the bar table. The charging order was made by Master Lunn because Dr Hammerton has refused, for what has now been a substantial period of time, to comply with a consent allocatur. The most expeditious way of having the charging order removed would be to pay the amount of the allocatur, and interest.
No error has been demonstrated upon which I should set aside the order of the Master. There is no good reason to interfere with the Master’s discretion to make the order.
Orders
Permission granted to Dr Marmanidis, pursuant to r 89 of the Rules of Court, to intervene in these proceedings for the limited purpose of appealing a master’s refusal to lift the charging order made on 9 May 2008.
Appeal dismissed.