McDonald v Street

[2014] NSWSC 977

Supreme Court

New South Wales

Medium Neutral Citation:	McDonald v Street & Anor [2014] NSWSC 977
Hearing dates:	22 July 2014
Decision date:	22 July 2014
Jurisdiction:	Common Law
Before:	Hamill J (as Duty Judge)
Decision:	See orders.
Catchwords:	CIVIL LAW - garnishee orders - application to set aside garnishee orders - cross-vesting - transfer to Family Court - orders between defendants - unrepresented litigant - interim orders
Legislation Cited:	Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth)
Category:	Procedural and other rulings
Parties:	Plaintiff: Helen Jennifer McDonald (Formerly known as Helen Jennifer McAskill) First Defendant: Alexander Whistler Street Second Defendant: Sally Street
Representation:	Counsel: Plaintiff: A Di Francesco First Defendant: G M Watson SC Second Defendant: Unrepresented (In person) Solicitors: Plaintiff: Wood Marshall Williams Lawyers First Defendant: Garland Hawthorn Brahe Solicitors Second Defendant: Unrepresented
File Number(s):	2014/101833

EX TEMPOREJUDGMENT

1. HAMILL J: Before me is a notice of motion by the first defendant for a number of orders, in particular, an application that garnishee orders in respect of practice fees due and payable to him be set aside. There are other associated orders sought by a notice of motion signed by the first defendant's solicitor on 18 July 2014. That application comes in the context of an application by the first defendant under s 5(1)(b) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) whereby he seeks the proceedings be transferred to the Family Court in Sydney.

1. The circumstances in which that application arises can be described briefly enough.  The plaintiff is the first defendant's mother-in-law.  It is said, and largely agreed, that between 2004 and 2009 she lent a series of sums of money to the first defendant and the second defendant.  The second defendant is her daughter.  The marriage between the first and second defendants has not yet been dissolved, but the parties are separated and proceedings have been commenced in the Family Court.

1. In that context and on 2 October 2013 the plaintiff sent a letter of demand to the first defendant.  In February and March there were pre-proceeding actions taken in the Family Court.  On 3 April 2014 the plaintiff brought a statement of claim in this Court in an amount of $836,989.39. That statement of claim was directed to both the first and second defendants, that is to say the plaintiff's son-in-law and the plaintiff's daughter.  In May 2014 the first defendant put on a defence.

1. It is unnecessary to go into the detail, but the defence made substantial admissions as to the loans alleged in the statement of claim. As a result the plaintiff sought summary judgment and from my perusal of the file appears to have obtained summary judgment on 16 May 2014 in the sum of $540,729.92.  Summary judgment was sought only in respect of the first defendant.  I am told today by the plaintiff's barrister that she does intend to pursue the claim against the second defendant in some respects.  It is also anticipated she will pursue the balance of the claim against the first defendant.

1. In any event, on 24 June 2014 a series of garnishee orders were issued out of the Court Registry on the applications of the plaintiff as well as a charging order with respect to certain shares, including shares in some barrister's chambers.

1. On 14 July 2014 the first defendant initiated proceedings in the Family Court and four days later, which is to say 18 July 2014, he issued a notice of motion in this Court seeking the orders to which I have referred, which generally can be described in these terms, first, an application for the proceedings in this Court to be transferred to the Family Court under the cross‑vesting legislation; and, second, some form of stay or “set aside” order of the garnishee orders in relation to the summary judgment.

1. The matter is before me purely in relation to the application to stop the enforcement of the judgment on an interim basis.  The application for transfer to the Family Court had previously been listed before the duty judge on 18 August by way of agreed orders between the parties.  The length of that application is clearly going to exceed a matter which is appropriate to be dealt with in the duty list and as a result that date will be changed. Subject to anything I hear to the contrary I propose to list that matter on 27 August 2014.

1. The application to set aside the garnishee order was supported by an affidavit of the first defendant, which annexed the initiating process in the Family Court proceedings as well as some other documents.  It was also supported by an affidavit of his solicitor, but that did not add very much to the affidavit of the first defendant.

1. In view of the circumstances that have developed during the course of the day it is unnecessary to go into the detail of the evidence of the first defendant.  However, at the outset this morning I indicated that it seemed to me there were a number of matters of detail that were conspicuously absent from that affidavit.

1. Mr Di Francesco, who appears for the plaintiff, made a similar submission and specifically put to me two matters, including the fact that the first defendant had a gross income of $774,000, with a net income of $583,500 for the year ended 30 June 2013.  Plainly, there were matters other than that which were absent from the affidavit.

1. On the other hand, the application made by the first defendant is for interim orders and designed to preserve the position of the parties.  I raised with both counsel whether or not there was some possible resolution whereby their respective clients' interests could be preserved.  In consequence of that they had a successful negotiation and provided me this afternoon with a list of proposed consent orders, which were in the following terms:

“SHORT MINUTES OF ORDER

MCDONALD v STREET and anor

Until further order of the Court, and by consent of the plaintiff and the first defendant, the Court:

1. STAYS the effect of any garnishee order obtained by the plaintiff in the proceedings.

2. ORDERS that the first defendant pay or cause to be paid any income he receives into the trust account of Wood Marshall Williams (WMW) within two working days after the income is received.

3. ORDERS that the funds accumulated in the trust account of WMW be disbursed as follows:

(a)          50% to be paid to the first defendant or at his direction solely for the purpose of meeting any existing or accumulating tax liability of the first defendant;

(b)          That, at the discretion of Neale Stuart Marshall, a sum be set aside to meet the existing and accumulating obligation of the first defendant to pay maintenance for his daughter [name deleted] and that it be disbursed to the Child Support, Department of Human Services, or at its direction;

(c)          That of the balance:

1. 70% be paid to the plaintiff; and

2. 30% be paid to the first defendant.

4. NOTES an undertaking given by the first defendant to the Court that he will take no measures to dissuade the immediate payment of his fees or to cause the payment to be delayed or deferred.

5. NOTES an undertaking by the first defendant to the Court that he will take immediate measures to sell his chambers (including his shareholding in Seven Wentworth North Pty Ltd), and further NOTES an agreement between the plaintiff and the first defendant that the proceeds of sale of those chambers will be paid equally between them on settlement of the sale.

6. NOTES an agreement between the plaintiff and the first defendant that within 14 days the first defendant will make an application for an early payment of his superannuation entitlement and, in the event that some or all of the funds are paid, that the proceeds will be paid equally between them.

7. RESERVES liberty to restore on three days' notice.

8. ORDERS that costs of the motion be costs in the cause.”

1. At this point I should note that in addition to counsel who appeared for the plaintiff and the first defendant, the second defendant also appeared and she is unrepresented.  Once the first defendant and plaintiff had fashioned the consent orders the second defendant was shown a copy and she has expressed some strong concerns about the content, in particular, whether her interests are protected by those orders or indeed whether they are prejudiced by them.

1. It is questionable as to whether or not this Court on an application of this kind can make orders as between the two defendants.  It may be that the second defendant has recourse in other litigation and specifically family law litigation.  Nevertheless, the fact is that the second defendant has expressed those concerns.  Each counsel, I think, responsibly has shown some concern as to the way forward in that circumstance.  In the circumstances I propose that any orders I make will take the concerns expressed by the second defendant into account and largely the parties have agreed as to the way that might appropriately be done.

1. The second defendant in articulating her concerns has noted that in the end anything that goes to the plaintiff will ultimately go to her.  So largely her concern is to protect her own interests by protecting those of her mother, the plaintiff.  Of course, the plaintiff is here represented and is a party to the proposed consent orders.  I think it would be extremely helpful if the second defendant is legally represented on the next occasion.  Although no criticism is directed to counsel or the solicitors instructing counsel, it is of concern that the second defendant really played no part in the negotiation until after the agreement had been reached.  Nevertheless, as I say, there is no criticism of anybody for that happenstance; it is just the way things unfolded.  I have to say from the Court's point of view the approach adopted by the legal representatives of the first defendant and the plaintiff, is considered to be responsible and sensible.

1. Having taken into the second defendant's concern, I propose to make a number of the orders agreed to, but I note they are on an interim basis and they will remain in force only until 27 August 2014 when the matter will be back before the Court so that any further orders of that nature will have to be reconsidered by the judge hearing the application under the cross-vesting legislation.  The orders I make are these:

1. Adjourn the motion for transfer to the Family Court and the final resolution of the other orders sought in the notice of motion dated 18 July 2014 until Wednesday 27 August 2014.

1. Stand over the two notices to produce directed to the first defendant until Wednesday 30 July 2014.

1. There is a stay of the effect of any garnishee order obtained by the plaintiff in the proceedings until midnight on 27 August 2014 or further order of the Court.

1. I order the first defendant to pay or cause to be paid any income he receives into the trust account of Wood Marshall Williams within two working days after the income is received.

1. I order that the funds accumulated in the trust account of Wood Marshall Williams be dispersed as follows;

(a)      50% to be paid to the first defendant or at his direction solely for the purposes of meeting any existing or accumulating tax liability of the first defendant;

(b)      that at the direction of Neale Stuart Marshall a sum be set aside to meet the existing and accumulating obligation of the first defendant to pay maintenance for his daughter [name deleted] and that it be disbursed to the Child Support Department of Human Services or at its direction.  There is to be no publication of her name;

(c)      that the balance

1. 70% be paid to the plaintiff; and

1. 30% to be paid to the first defendant.

1. I note an undertaking given by the first defendant to the Court that he will take no measures to dissuade the immediate payment of his fees or to cause the payment to be delayed or deferred.

1. I note an undertaking by the first defendant to the Court that he will take immediate measures to sell his chambers (including his shareholding in 7 Wentworth North Pty Ltd); and further note an agreement between the plaintiff and the first defendant that the proceeds of sale of those chambers will be deposited into an account under the control of Neale Stuart Marshall until distribution of those funds is determined by an order of this Court or the Family Court.

1. Any of the parties have liberty to restore the matter to the list on three days' notice.

1. I order that costs of today be costs in the cause.

1. I direct the matter be referred to the New South Wales Bar Association Pro Bono Scheme with my strong urging that the second defendant, Ms Street, be provided with legal assistance for the hearing on 27 August 2014.

Decision last updated: 24 July 2014