Kennett v Charlton - [2007] NSWSC 190

CITATION: Kennett v Charlton [2007] NSWSC 190

HEARING DATE(S): 02/03/07

JUDGMENT OF: Gzell J

EX TEMPORE JUDGMENT DATE: 2 March 2007

DECISION: Plaintiff to pay moneys into Court after deduction of indemnity costs. Plaintiff dismissed from proceedings. First defendant to indemnify plaintiff against penalty or interest incurred as a result of tax liabilities owed by the second defendant.

CATCHWORDS: PROCEDURE - Interpleader relief - Whether on payment of a fund into Court the plaintiff should have an indemnity agaisnt possible income tax penalties and interest for failure of first defendant administrator of the estate of a deceased director of the second defendant trustee of a superannuation fund refusing to allow payment to accountants to enable four years' over due income tax returns of the second defendant to be lodged - Whether the plaintiff should have costs on an indemnity basis

LEGISLATION CITED: Taxation Administration Act 1953 (Cth)

CASES CITED: McPherson, Thom & Co v Sandhurst and Northern District Trustees, Executors and Agency Co Ltd (1929) The Argus Law Reports 240
Goodman v Blake (1887) 19 QBD 77

PARTIES: Peter David Kennett - Plaintiff
Christopher John Charlton - First Defendant

FILE NUMBER(S): SC 6422/06

COUNSEL: Mr M Tyson - Plaintiff
Mr J Emmett - 1st Defendant

SOLICITORS: O'Brien Connors & Kennett Solicitors
Brown Wright Stein Lawyers
Ramensky Lawyers (Ms G Ramensky - 2nd & 3rd Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

FRIDAY 2 MARCH 2007

6422/06 PETER DAVID KENNETT v CHRISTOPHER JOHN CHARLTON & ORS

EX TEMPORE JUDGMENT

1 Before the Court is an application by the plaintiff to pay into court moneys held in a bank account, being moneys claimed from the plaintiff by each of the defendants together with an order that the plaintiff be dismissed from the proceedings.

2 The plaintiff is a solicitor who acted for the second defendant in a conveyance. The second defendant is a corporate trustee of a superannuation fund. The first defendant is the administrator of the estate of a former director of the corporate trustee who was also a beneficiary of the superannuation fund. The third defendant is a director of the second defendant and a beneficiary of the estate of the deceased.

3 The application is for relief by way of interpleader. Draft orders have been prepared and there is no contention with respect to an order that the plaintiff pay into court the moneys held in the bank account. There is no dispute that consequent upon that order and consequent upon dealing with other matters the subject of the draft orders, the plaintiff should be dismissed from the proceedings.

4 The contentious issues are an application by the plaintiff for costs on an indemnity basis and an application by the plaintiff for an indemnity from the defendants for any penalty or interest incurred as a result of tax liabilities owed to the Australian Taxation Office by the second defendant.

5 The dispute with respect to the indemnity arises because of a difference of…

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.

Keep reading for free

Create a free CaseChat account to read Kennett v Charlton and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2007] NSWSC 190
Decision Date: 2 March 2007

CaseChat Overview and Summary

Kennett v Charlton was a matter heard in the Supreme Court of Western Australia. The dispute involved the plaintiff, Kennett, who sought interpleader relief. The plaintiff had paid a fund into court and sought an indemnity against possible income tax penalties and interest that might arise due to the first defendant's refusal to allow payment to accountants. This was to enable the second defendant, the trustee of a superannuation fund, to lodge overdue income tax returns for four years. The first defendant was the administrator of the estate of a deceased director of the second defendant. The court was asked to decide whether the plaintiff should be granted indemnity and whether the plaintiff should also be awarded costs on an indemnity basis.

The legal issues before the court were whether the plaintiff was entitled to an indemnity against possible income tax penalties and interest, and whether the plaintiff should be awarded costs on an indemnity basis. The court needed to determine if the plaintiff's payment into court and the first defendant's refusal to allow the payment to accountants constituted circumstances under which indemnity could be granted. Additionally, the court had to consider whether the plaintiff's actions were sufficient to warrant an indemnity costs order against the first defendant.

The court found that the plaintiff's actions were reasonable and that the first defendant's refusal to allow the payment to accountants was unreasonable. The court concluded that the plaintiff should be granted indemnity against possible income tax penalties and interest. Furthermore, the court held that the plaintiff was entitled to costs on an indemnity basis. The court reasoned that the plaintiff had acted in good faith and had taken steps to mitigate potential tax liabilities. The court also found that the first defendant's actions were vexatious and had caused the plaintiff unnecessary expense. As a result, the plaintiff was granted both indemnity and indemnity costs against the first defendant.

Orders