Provident Capital Limited v Ian Maxwell Anderson

[2012] NSWSC 183

Supreme Court

New South Wales

Medium Neutral Citation:	Provident Capital Limited v Ian Maxwell Anderson & Ors [2012] NSWSC 183
Hearing dates:	24 February 2012
Decision date:	09 March 2012
Jurisdiction:	Common Law
Before:	Ball J
Decision:	The second defendant's application be dismissed with costs.
Catchwords:	PROCEDURE - Judgments and orders - meaning of "otherwise dismissed" - whether proceedings dismissed against certain party - where orders resolve all issues between parties
Legislation Cited:	Supreme Court Act 1970 (NSW)
Cases Cited:	Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 Herepu Pty Ltd v Belle [2009] NSWSC 252; (2009) 76 NSWLR 230 Parker Wines Pty Ltd v Australia and New Zealand Banking Group Limited (unreported, 7 December 1995, Young J)
Category:	Procedural and other rulings
Parties:	Provident Capital Limited (ACN 082 735 573) (Plaintiff) Ian Maxwell Anderson (First Defendant) Sonya Monica Coghlan (Second Defendant) IASM Holding Pty Ltd (ACN 139 778 742)
Representation:	S B Docker (Plaintiff) A Shearer (Second Defendant) Tiernan Lawyers (Plaintiff) APJ Law (Second Defendant)
File Number(s):	2010/159025

Judgment

1. This is an application for orders, the effect of which would prevent the plaintiff, Provident Capital, from pursuing the current proceedings against the second defendant, Ms Coghlan.

1. Before dealing with the current application, I should say something about the history of the matter and how it came before me.

1. The proceedings originally concerned claims for possession against the first defendant, Mr Anderson, in relation to a rural property known as "Barry Station" that was the subject of a property mortgage in favour of Provident Capital and in relation to chattels (including cattle and livestock), plant and equipment on Barry Station that were the subject of a separate goods mortgage.

1. The proceedings were subsequently amended in May 2011 to join Ms Coghlan. It was alleged in the second amended statement of claim by which Ms Coghlan was joined that:

(a)   She is and was at all material times the de facto wife of Mr Anderson;

(b)   On 20 August 2010 Mr Anderson and Ms Coghlan entered into consent orders in the Family Court pursuant to which Mr Anderson agreed to transfer to Ms Coghlan plant and equipment used on Barry Station including a new Holland tractor and 1500 mixed store cattle;

(c)   That Mr Anderson and Ms Coghlan had not genuinely separated and the Family Court consent order was entered into for the purpose of defrauding Provident Capital;

(d)   In those circumstances, the consent orders should be set aside and Ms Coghlan should be ordered to return to Barry Station such of the 1500 head of cattle and other plant and equipment as remain in her possession and control and pay to the plaintiff the proceeds of sale of any of those items that had been sold.

1. Orders were also sought against Ms Coghlan restraining her from "removing, damaging, disposing of or otherwise dealing with any real or personal property the subject of the goods mortgage or the proceeds of sale thereof" and an order requiring her to file an affidavit explaining what has become of the property she has removed or caused to be removed from Barry Station (second amended statement of claim, para 29(iii), (iv)).

1. Following joinder of Ms Coghlan and the application for injunctions against her, the parties reached a partial resolution of the proceedings which was recorded in consent orders made by Kirby J on 9 June 2011. Those orders contained the following provisions:

(a)   By paragraphs 1, 2 and 3, Provident Capital became entitled to possession of Barry Station;

(b)   Paragraph 4 provided:

The Court notes the agreement of the parties that the Second Defendant may retain, subject to the paragraphs below, approximately 756 cattle currently on the stations known and referred to in these proceedings as "Oxley" Station and "Bunumbert" Station and the Plaintiff releases the Second Defendant from any claim with respect to the said 756 cattle.

(c)   Paragraph 5 recorded the agreement of the parties that the cattle then on Barry Station which were "guaranteed by the Second Defendant at 350" were the sole property of Provident Capital. The paragraph goes on to note that if there were more than 350 cattle on Barry Station, those cattle could be offset against Ms Coghlan's obligation to deliver a further 100 cattle and to the extent that there were more than 450 cattle, those cattle belonged to Ms Coghlan who was entitled to remove them;

(d)   Paragraph 6 of the order sets out an agreement between the parties on how the number of cattle was to be ascertained;

(e)   Paragraphs 7 to 9 record agreements between Provident Capital and Ms Coghlan relating to the delivery of additional cattle and paragraph 10 records an undertaking to comply with that agreement;

(f)   Paragraph 11 records an agreement between Provident Capital and Ms Coghlan concerning goats and horses then on Barry Station;

(g)   Paragraphs 12 and 13 provide:

12.The Court notes the agreement of the parties that:

(a) subject to the terms of these orders and notations, and subject to subparagraph (b) below, the Plaintiff and the Second Defendant mutually release each other from any claim arising out of the subject matter of these proceedings whether known or unknown; and

(b) these orders and agreed notations are without prejudice to the entitlement of the Plaintiff to:

i. trace into the hands of the Second Defendant or any entity in which she has an interest, the proceeds of any sale by or on behalf of the First Defendant of:

1. any personal chattels including cattle, (other than the 1500 cattle and their progeny which were the subject of the Family Court Orders dated 26 August 2010 between the First Defendant and the Second Defendant) which cattle, it is agreed by all parties, are personal chattels for the purposes of the Goods Mortgage dated 21 December 2006 and which form part of the security the subject of the Goods Mortgage; or

2. other plant and/or equipment;

that were on "Barry Station" (as defined in the Second Further Amended Statement of Claim) on or after 2 June 2010 being the date of service of the notice of default, or

ii. seek to set aside at law, in equity or pursuant to any legislation including s37A of the Conveyancing Act 1919 (NSW) any alienation of any property by the First Defendant that had the effect of transferring the value of the security under the goods mortgage to or for the benefit of the Second Defendant or any such entity (other than, to avoid doubt, the 1500 cattle and their progeny referred to above).

(c) The Plaintiff indemnifies the Second Defendant against any claim and the costs of defending any claim made by a Trustee in Bankruptcy against the Second Defendant arising out of claims made by the Plaintiff against the First Defendant which the Trustee in Bankruptcy seeks to recover from the Second Defendant with the exception of the actions referred to in paragraph (b).

13. The proceedings by the Plaintiff as against the Second Defendant only be otherwise dismissed, with no order as to costs as between the Plaintiff and the Second Defendant with the intent that the Plaintiff and the Second Defendant will each bear their own costs of the proceedings.

(h)   Paragraph 14 notes an agreement between the parties by which Provident Capital would take reasonable steps to return to Ms Coghlan certain personal effects.

1. The matter was listed for further directions on 19 August 2011. There was no appearance on behalf of Ms Coghlan at that time. It is not clear whether she was aware of the directions hearing. In any event, directions were made by consent between Provident Capital and Mr Anderson. Paragraph 1 of the directions provided:

The plaintiff is directed to file and serve a third amended statement of claim on or before 2 September 2011.

Other directions were made for the filing and service of defences and evidence and the matter was relisted for further directions on 2 December 2011.

1. Provident Capital filed a third amended statement of claim on 5 September 2011. That statement of claim makes a number of amendments to the claims against Mr Anderson and Ms Coghlan. It also joins IASM Holding Pty Ltd as a third defendant. It is alleged that IASM Holding is a company controlled by Mr Anderson and Ms Coghlan, that it acts as trustee of the Avalon Farm Trust, that that trust is controlled by Ms Coghlan and that Ms Coghlan transferred assets obtained under the Family Court consent orders including the tractor and 1500 mixed store cattle to IASM as trustee of the trust and that by reason of those matters, IASM is liable to account for the assets transferred to it.

1. In the meantime, on 18 October 2011, Provident Capital commenced proceedings against Ms Coghlan in the Equity Division alleging that Ms Coghlan had breached terms of the agreement recorded in paragraphs 6, 7 and 9 of the consent orders made by Kirby J.

1. Ms Coghlan became aware of the third amended statement of claim filed in these proceedings. Subsequently, on 5 October 2011, she filed in the Equity Division proceedings a notice of motion seeking the following:

1. A declaration that Supreme Court proceedings 2010/159025 has been dismissed as against Defendant pursuant to the Consent Orders made on 9 June 2011.

2. Provident Capital Limited be restrained from commencing or continuing any claim against Defendant in relation to the matters dealt with in the said Consent Orders except in relation to:

a. the enforcement of the terms of the agreement enshrined in the said Consent Orders, or,

b. the exercise of its right to trace the proceedings of any sale into the hands of the Defendant as set out in 12(b)(i) of the Consent Orders made 9 June 2011.

3. Provident Capital Limited be restrained from continuing any claim against Defendant in relation to the Provident Capital Limited v Coghlan, matter number 2011/275417 until judgement [sic] is handed down in respect of orders 1 and 2.

1. That notice of motion was listed before me on 24 February 2012. It is clear, as became apparent to the parties, that that motion was misconceived, since the court has no power to injunct proceedings before it: see Supreme Court Act 1970 s 61. For that reason, I dismissed that motion.

1. Mr Shearer, who appeared for Ms Coghlan, indicated that Ms Coghlan would file a motion in these proceedings seeking orders to the same effect as those sought in the motion which I had dismissed and both he and Mr Docker, who appeared for Provident Capital, asked me to deal with that application, rather than put the parties to the expense of having to come back before the court, albeit in the Common Law Division, to argue the substance of a motion that both parties had prepared to argue on the return of the motion filed in the Equity Division proceedings. I acceded to that request.

1. In substance, Mr Shearer submits that the effect of paragraph 13 of the orders made by Kirby J were to dismiss these proceedings so far as they concerned Ms Coghlan and that, therefore, the third amended statement of claim so far as it concerns her should be struck out. Mr Docker, on the other hand, says that the effect of paragraph 13 of the orders made by Kirby J was to permit Provident Capital to continue claims against Ms Coghlan to the extent that those claims fell within the scope of paragraph 12 of the consent orders and that the third amended statement of claim does no more than that. Consequently, the resolution of the current dispute turns on the correct construction of paragraphs 12 and 13 of those orders.

1. In support of his argument, Mr Shearer relies on the decision of Young J (as his Honour then was) in Parker Wines Pty Ltd v Australia and New Zealand Banking Group Limited, unreported, 7 December 1995. In that case, the defendant had sought to enforce securities and it appears that the plaintiff had commenced proceedings to restrain it from doing so. The proceedings were settled and the terms of settlement were recorded in consent orders. The orders provided that the matter could be re-listed after a specified date in the event that the plaintiffs had not complied with the settlement terms to enable the defendant to obtain orders in aid of the securities it was seeking to enforce. In addition, the orders recorded that, in certain events, the plaintiffs "hereby agree to consent" to orders being made giving the defendant possession of property the subject of the securities. The consent orders then provided that the proceedings should be "otherwise dismissed". The plaintiffs did not comply with the orders and the defendant sought to re-list the matter to obtain the orders provided for in the consent orders. Young J held that it was not entitled to do so. In his opinion, whatever the expression "otherwise dismissed" meant, its effect was to bring the proceedings to an end. Once dismissed, they could not be revived: Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 at 530. It was necessary, therefore, for the defendant to pursue the relief it sought in separate proceedings. According to Mr Shearer, the same conclusion must follow in this case.

1. I do not accept that submission. In Parker Wines, the consent orders that were made were intended to resolve all of the issues between the parties. The reservation that was sought to be made was a reservation that was intended to operate in the event that the plaintiffs did not comply with the terms that had been agreed. The conclusion reached by Young J in those circumstances was that the expression "otherwise dismissed" must be interpreted as an order dismissing the proceedings. Although Young J did not expressly say so, the word "otherwise" was added to make it clear that other orders were to operate at the same time as the order dismissing the proceedings.

1. In the present case, the proceedings were not dismissed. They remained on foot against Mr Anderson. Moreover, paragraph 12 of the consent orders makes it clear that they were not intended to resolve all the issues between Provident Capital and Ms Coghlan, since the orders were made without prejudice to the entitlement of Provident Capital to trace into the hands of Ms Coghlan or any entity in which she had an interest the proceeds of sale of certain chattels. They are the very chattels which are the subject of the claim brought against Ms Coghlan by the second amended statement of claim. In that context, in my opinion, the expression "otherwise dismissed" must mean that the proceedings against Ms Coghlan were dismissed except to the extent that the orders specifically contemplate that they will continue against her. Paragraph 12 contemplates that they will continue against her insofar as they seek to trace the proceeds of sale of the relevant chattels into her hands.

1. The conclusion of the previous paragraph is supported by the context in which the orders were made. As I have said, it is clear from the terms of the orders that the proceedings were to continue against Mr Anderson. But that claim and the claim against Ms Coghlan raise similar issues - such as whether the Family Court consent orders were entered into for the purpose of defrauding Provident Capital. At the time the consent orders in these proceedings were made, the parties could not have intended that the same factual issues would be determined in different proceedings.

1. It is true that paragraph 13 of the consent orders provides that there is to be no order for costs as between Provident Capital and Ms Coghlan with the intent that "each bear their own costs of the proceedings". But, in the context, that must mean that each would bear its or her own costs of the proceedings up until the date the order was made.

1. There may be a question of the precise scope of the relief that is sought to be carved out by paragraph 12 of the orders. The paragraph is not entirely clear. One difficulty with it is that the right to trace is not itself a form of relief: Herepu Pty Ltd v Belle [2009] NSWSC 252; (2009) 76 NSWLR 230. However, questions concerning the scope of the carve out do not mean that the proceedings cannot continue against Ms Coghlan. They simply mean that there is an issue that will need to be resolved concerning what relief, if any, Provident Capital is entitled to obtain.

1. Irregularities may have occurred in the proceedings because orders have been made apparently by consent that affect Ms Coghlan, but in circumstances where she may not have been aware of them at the time that they were made. That may mean that it will be necessary for additional orders to be made or directions to be given to cure any prejudice that Ms Coghlan has suffered as a consequence. However, Ms Coghlan's current application failed and, in those circumstances, I can see no reason why she should not pay Provident Capital's costs of the application.

1. The second defendant's application should be dismissed with costs.

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Decision last updated: 12 March 2012