Nour Pty Ltd v Fensford Pty Ltd
[2004] VSC 434
•25 October 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. 8031 of 2001
| NOUR PTY LTD | Plaintiff |
| v | |
| FENSFORD PTY LTD and ORS. | Defendants |
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JUDGE: | HARPER J. | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 25 October 2004 | |
DATE OF JUDGMENT: | 25 October 2004 | |
CASE MAY BE CITED AS: | Nour Pty Ltd v Fensford Pty Ltd & Ors | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 434 | |
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APPEAL – Appeal from a Master – Garnishee order sought - Whether moneys held in a joint account following judgment at trial should be paid to the judgment creditor before the hearing and determination of an appeal from the trial Judge – O.71 Supreme Court Rules.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms G. Schoff | Herbert Geer & Rundle |
| For the Defendants | Mr W. Gillies | Mian Phillips & Co. |
HIS HONOUR:
This is an appeal from Master Kings, who on 6 October this year refused an application by the present judgment creditor, Nour Pty Ltd, for an order pursuant to Order 71 of the Rules of the Supreme Court that certain moneys held in a joint account be paid to the judgment creditor in part satisfaction of a judgment debt.
There is no question but that, as things stand at present, Mr Ricky Vella is a judgment debtor of the present judgment creditor. In proceedings heard by Balmford, J. in April this year, the parties argued about the interests claimed in certain land and other matters. Her Honour held in favour of the judgment creditor to the extent that she ordered that the then second defendants, Ricky Vella and Beverley Lewis, in their capacity as executors of the estate of Julie Vella, pay to the judgment creditor the sum of $237,596.09, together with interest. At the same time, her Honour rejected a claim by the judgment creditor that the real property the subject of the dispute was held on a constructive trust by Mr Vella as constructive trustee for the judgment creditor.
An appeal has been instituted against the judgment handed down by her Honour and entered against the defendants on 15 June this year. That appeal has yet to be heard. Indeed, at present, there is an order that the appellants, or some of them, provide security for the costs of the appeal. That security must be given by, as I understand it, Friday 17 December if the appeal is to proceed.
In the meantime, the application pursuant to Order 71 is made on the basis that there is presently held in an account in the joint names of the solicitors for the judgment creditor and the relevant judgment debtor a sum which represents the proceeds of the sale of the land which the judgment creditor had, before her Honour, claimed to be held on a constructive trust in its favour.
In my opinion it is clear that that aspect of the dispute between the parties has been finally resolved. Her Honour having declined to find the constructive trust claimed by the judgment creditor, and there being no appeal against that aspect of her judgment, the parties must accept that the claim for a constructive trust has failed, and accordingly the moneys representing the value of the land in question, that is, the moneys held in the joint account, are not held by Mr Vella as constructive trustee for the judgment creditor, they are held for him on his own account as being legally and beneficially entitled to them.
Order 71 applies where the court is satisfied that the relevant judgment debtor is a person to whom the person sought to be made the subject of the garnishee order is indebted. It was submitted by Mr Gillies on behalf of the judgment debtor that his client was not a person to whom the persons in whose names the account is held are indebted, because the funds in question are not owed to his client by those persons. They are held on behalf of his client, his client being beneficially and legally entitled to those moneys.
In my opinion the words "debt" and "debtor", as they are used in Order 71, do apply in a case such as the present case. Clearly, a trustee against whom judgment has been entered by a court in favour of a beneficiary is a "judgment debtor" within the meaning of that expression in rule 71.01. Equally, the successful beneficiary would fall within the definition of a "judgment creditor" in that rule. This being so, it seems to me to follow that a trustee can be a debtor within the meaning of Order 71 and a beneficiary can be a creditor. If this is correct, then, for the purposes of Order 71, the relationship between the persons in whose name the joint account is held on the one hand and Mr Vella on the other is that of debtor and creditor. It follows that, as debtors of Mr Vella, the persons in whose names the joint account is held are subject to Order 71.
The question then becomes whether there is in fact a debt presently due and payable by the persons in whose names the account is held to the judgment debtor. It was submitted by Mr Gillies that there is no such debt presently due and owing because the moneys in the account are held pending the determination by the court of the entirety of the dispute the subject of litigation before Balmford, J.
Ms Schoff for the judgment creditor submits to the contrary. In her submission, the dispute, the resolution of which was to determine the fate of the funds in the joint account, was confined to that concerning the claim by her client to a beneficial interest in the land. That dispute having been finally resolved, there is, Ms Schoff submits, no basis upon which the moneys in the joint account can be retained by those in whose name the account is held.
Mr Gillies relies upon a particular paragraph in a facsimile dated 23 May 2002 from the solicitors for the judgment debtor to the solicitors for the judgment creditor. That correspondence contains the following paragraph:
"We confirm our advice to you that should the plaintiff, Nour Pty Ltd, agree to the sale upon settlement of this matter after discharging the mortgage and any encumbrances standing ahead of your caveat will be discharged, payment of estate agent's commission and legal costs, the net balance then remaining will be held in trust and will not be released to the defendant until this matter is resolved or determined by the court without the prior written consent of your client."
Mr Gillies' construction of this paragraph depends upon a different meaning being given to the expression "this matter" where it first appears in the single sentence which comprises this paragraph to the meaning which the same expression should be given where it secondly appears. That, it seems to me, is to strain the ordinary rules of construction beyond the point to which they can legitimately be taken. The expression "this matter" where first appearing in that paragraph clearly relates to the settlement of the sale of the property in question. Giving the same meaning to the same expression later in the same sentence involves no distortion of the paragraph, but rather avoids the odd situation which would arise were two different meanings to be given to the same expression in the same sentence. If this is correct, then the matter to which the author of the letter refers is that concerning the fate of the real property. That matter has been determined by the court.
It follows that the funds in question have been determined to belong both legally and beneficially to Mr Vella. For the reasons to which I have already referred, there is then a debt owing to him by those in whose name the account is held. The preconditions for the making of a garnishee order therefore exist.
The Master, in her reasons for judgment on 6 October 2004, held that it was inappropriate that the dispute as to the terms on which the money is held in the joint account be determined by a garnishee summons. In my opinion, rule 71.10 clearly gives the court jurisdiction to determine the question on the return of the summons. Rather than put the parties through the expense of a further hearing, it seems to me appropriate that the determination should be made now. The Master was also of the view that the terms upon which the money was held were unclear. She, however, did not finally decide that question.
For the reasons which I have endeavoured to state, it seems to me that the judgment creditor is entitled to the garnishee order it seeks; and I rule accordingly.
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