Peter Carlisle v Linette Reynolds; Carlisle Attorneys Pty Ltd v Linette Reynolds

[2020] NSWSC 639

Supreme Court

New South Wales

Medium Neutral Citation:	Peter Carlisle v Linette Reynolds; Carlisle Attorneys Pty Ltd v Linette Reynolds [2020] NSWSC 639
Hearing dates:	14 May 2020
Date of orders:	14 May 2020
Decision date:	14 May 2020
Jurisdiction:	Common Law
Before:	Hamill J
Decision:	(1)   The freezing order made on 28 April 2014 is varied so that it is subject to compliance by the Westpac Bank with a garnishee order made on 11 November 2019 in respect of account number [REDACTED] in the name of [REDACTED]. (2)   Parties to pay their own costs.
Catchwords:	CIVIL LAW – dispute between solicitor and client – legal costs – judgment entered some years ago – freezing orders made over bank account – judgment remains unsatisfied – garnishee order directing bank to pay funds to judgment creditor – Bank unwilling to comply – where Bank concerned garnishee order does not vacate restraining order – restraining order varied
Category:	Principal judgment
Parties:	Peter Carlisle (First Plaintiff) Carlisle Attorneys Pty Ltd (Second Plaintiff) Linette Reynolds (Defendant)
Representation:	Solicitors: P Carlisle (Plaintiffs)
File Number(s):	2013/00374396
Publication restriction:	Nil

EX TEMPORE Judgment (REVISED)

1. HAMILL J: This is a notice of motion filed on 29 January 2020 in proceedings known as Peter Carlisle (as the first plaintiff) and Carlisle Attorneys Pty Ltd (as the second plaintiff) against Linette Reynolds.

2. The notice of motion seeks orders in the following terms:

“1. An order that order 3 made by the court on 20 December 2013 be varied to read as follows:

3. An order pending further order that the defendant Linette Reynolds be restrained from disbursing any moneys (a) received in settlement by her of claims made in the Magistrates' Court of New South Wales against Raymond Schaw the sum of $141,741.28; (b) held on deposit with the Westpac Banking Corporation in an account styled in the name of Linette Reynolds or Linette Anne Reynolds except pursuant to order made by the Supreme Court of New South Wales;

2. An order that all moneys standing to the credit of the defendant on deposit with the Westpac Banking Corporation be paid to the plaintiff; and

3. Costs.”

3. There are a number of complications surrounding the precise nature of the orders sought, not least of which is the fact that the order referred to in the notice of motion, being an order of 20 December 2013, appears to have been superseded by orders made on 28 April 2014. Those orders are as follows:

“1. I note the undertakings and make the orders set out in the short minutes of order.

2. I reserve the question of the plaintiff’s costs of the notice of motion filed on 3rd April 2014.

3. Fix the matter for directions before registrar at 9 a.m. 28th April 2014.

[Short Minutes of Order]

1. The Plaintiffs undertake to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court as it may direct) to any person (whether or not a party) affected by the operation of the order.

2. The Second Plaintiff undertakes to file an Application for Assessment of Costs in proceedings number 2013/359435 within seven 7 days.

3. Upon the undertakings provided in Paragraphs 1 and 2 above, an order pending further that the Defendant be restrained and is hereby restrained from withdrawing any funds from, encumbering or otherwise dealing in all monies held or deposited in account no. [REDACTED], being an amount opened in the name of Linette Reynolds with the Westpac Banking Corporation, excepts for funds deposited by Centrelink.

4. An order that the Second Plaintiff file an Application for Assessment of Costs in proceedings number 2013/00374396 within seven (7) days such application and these Minutes of Order to be served at the Defendant’s address for service given in those proceedings.”

4. As can be seen, the orders made on 28 April 2014 do not appear to be a variation of the earlier orders. Rather, they appear to replace them at least in some respects. In any event, as far as I can tell and as far as the parties indicate, both orders appear to remain extant some six or so years later. It is unnecessary to go into great detail to explain the background to this dispute. It is clear from the submissions of the parties that things remain contentious between them and there appears to be significant distrust between the plaintiff and the defendant.

5. The plaintiff or judgment creditor is a solicitor's firm. The defendant or judgment debtor is the law firm's former client. The law firm was acting for the client in litigation but their retainer was terminated before the matter ultimately, and as I understand it, settled. There was then a dispute about the legal costs alleged to be outstanding.

6. In late 2013, freezing orders were made by Rothman J in the following terms:

“1. An order that the application for assessment of costs filed in proceedings 2013/359435 be struck out.

2. An order that leave be granted to the defendant to file an amended application for assessment.

3. An order pending further order, the defendant be restrained from disbursing from any monies received in settlement by her of the claims made in the Supreme Court of New South Wales against Mr Raimond Schaw, the sum of $141,741.28.

4. An order that service of this order be effected by email transmission to the defendant at the address known as [REDACTED] and by prepaid post to [REDACTED].

5. Matter adjourned to the registrar’s list on 29 January 2014.

6. Costs reserved.”

7. On 28 April 2014, as I indicated above at [3], a further freezing order was made along with other orders in the terms that I have set out. All of those orders were made in anticipation of litigation concerning the outstanding costs that the plaintiff claimed were owed by the defendant.

8. On 22 December 2015, a costs assessor made a finding that there were outstanding fees in the sum of $112,760.13. On 25 February 2016, that assessment was entered as a judgment of this Court in the amount of $115,837.95. There appears to be no dispute that this judgment debt remains outstanding and has not been satisfied. It is also clear that Ms Reynolds remains dissatisfied with that outcome. There is nothing I can do on the present notice of motion or otherwise to alleviate her dissatisfaction. I cannot go into the rights and wrongs of the matter. All I can do is act on the fact that there is an existing judgment in the plaintiff’s, or judgment creditor's, favour. Any avenue of appeal or review has, it seems to me, long ago passed its use-by date.

9. A number of things happened between the entry of that judgment and 2019 during which time the judgment creditor attempted in various ways to enforce or recover the debt. I need not go into those matters. On 11 November 2019 a garnishee order was issued out of this Court's Registry. The order was directed the Westpac Bank and was in the following terms:

“1. It is ordered that all debts that are due or accruing from the garnishee to the judgment debtor at the time of service of this order are attached to the extent of $115,837.95 to answer a judgment in these proceedings.

2. You are ordered to pay any amount so attached to the judgment creditor within 14 days after the date on which the order is served on the garnishee or, if the debt attached is a debt that falls due after that date, within 14 days after the date on which the debt becomes due.”

10. I would have thought it was obvious that this was an order of the Court and therefore subject to the exceptions to freezing orders made in December 2013 and April 2014. In any event, there followed substantial correspondence between the judgment creditor and the bank subject to the garnishee order.

11. I should say that the garnishee order, on its face, did not appear to identify with particularity or clarity any particular bank account to which it was meant to attach. That may or may not have been a deliberate course, but in any event it appears to have caused confusion or uncertainty amongst those at the bank who received and were charged with the responsibility of acting on the Court's garnishee order. As I say, there was substantial correspondence, and it seems at one stage the bank was unable to identify any account to which the garnishee order should attach. At one stage a “DN” or document notation was made indicating that there was no relevant account held.

12. Ultimately, it seems with the assistance of the judgment creditor, an account was identified. That was the account referred to in the freezing orders made in April 2014. For complete clarity, it is a Westpac cash management account with the following account name: [REDACTED], with an account number [REDACTED]. The customer number is [REDACTED].

13. Ms Reynolds tells me that she has not been able to access that account since late 2014, when there are some transactions on the bank statements that were tendered in evidence. As was seen, the freezing orders made in April 2014 were subject to an exception that she could access her Centrelink payments, no doubt the funds upon which she lives from day to day. Ms Reynolds told me that she has now arranged for her Centrelink payments to go into some other fund or account. Consequently, the relevant Westpac bank account is not an account that she uses in her day-to-day life and, as I say, Ms Reynolds tells me that she has not been able to access it since 2014.

14. The funds in the account have slowly and little by little been whittled away, to some extent by reference to bank fees and similar. On 29 January 2020 the bank wrote a letter to the judgment creditor explaining the reasons it had not acted on the garnishee order. That is a two-page letter dated 29 January 2020 signed by someone describing themselves as the Team Manager, Transactional Banking Services. The letter refers to the case number in this Court and to the freezing orders made on 28 April 2014.

15. The bank in the fourth-last paragraph of the letter says this:

“However, we have not received a copy of any court orders that indicate the restraining orders are no longer in force, nor does the garnishee order clearly vacate the restraining orders.

Accordingly Westpac is not in a position to comply with the garnishee order without clear court orders directing that the restraining orders are no longer in place."

16. The bank says they look forward to hearing from the judgment creditor. It was that day that the judgment creditor brought the notice of motion seeking the orders I have already identified.

17. The judgment creditor filed a court book which sets out a great deal of the historical material going back to 2013 and 2014, including relevant bank statements, court orders, affidavits and the like. Ms Reynolds tendered a number of documents indicating her financial position and her dissatisfaction with the outcome of the costs assessment and the conduct of the plaintiff in a more general sense. Ms Reynolds appears for herself.

18. Both parties made submissions about Ms Reynolds’ current financial situation, her financial situation in 2014, where there appeared to be some significant expenditure, as well as the background to the litigation. As I see it these are matters of no real relevance to the decision I have to make today, except to the extent that I need to assure myself that no order I make would deny Ms Reynolds access to her Centrelink payments or otherwise result in her becoming destitute.

19. As mentioned, Ms Reynolds has indicated that she has not accessed the relevant bank account for many years. However, she does have access to her Centrelink payments, which go into a different account. When I asked her directly what she could say against my making an order that would have the effect of the money in the account that I have identified being paid to the judgment creditor, I have to say that Ms Reynolds took a very reasonable and sensible stance. Essentially, she said that it was ultimately a matter for me to decide.

20. I am satisfied that there was no reason that the bank should not have acted on the garnishee order once the relevant account was identified. I understand the bank's caution. It was concerned not to be in breach of the Court's freezing order, particularly in circumstances where the freezing order was made by a Judge of the Court whereas the garnishee order was issued out of the Registry. The bank was no doubt also concerned that it should not dissipate its customer's funds unless it was certain that the Court intended that outcome. Nevertheless, and taking that into account, the most sensible resolution to the present dispute is to make orders that clarify the interaction between the freezing order and the garnishee order.

21. It is not necessary to make the orders sought in the notice of motion, and my fear is that making them would simply create further confusion. I say that with no disrespect to the drafter of the notice of motion, but I should make it clear, for what it is worth six years down the track, that the freezing and ancillary orders made in April 2014 and perhaps in December 2013 otherwise remain in force.

22. To give effect to the reasons I have just provided, I make the following orders:

1. The freezing order made on 28 April 2014 is varied so that it is subject to compliance by the Westpac Bank with a garnishee order made on 11 November 2019 in respect of account number [REDACTED] in the name of [REDACTED].

2. The parties are to pay their own costs.

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Decision last updated: 27 May 2020