Reozone Pty Ltd v Rene Santoro - [2018] NSWSC 650

Supreme Court

New South Wales

Medium Neutral Citation: Reozone Pty Ltd v Rene Santoro & Ors [2018] NSWSC 650
Hearing dates: 5, 6 & 7 February & 15 March 2018
Date of orders: 01 May 2018
Decision date: 15 May 2018
Jurisdiction: Equity
Before: Slattery J
Decision:
Orders made for payment out of Court. Orders stayed pending the making of final attempts to locate the mortgagor. Funds in Court paid out notably among the applicants.

Catchwords: FUNDS - IN - COURT - surplus funds paid into Court after sale of real property by mortgagee - Trustee Act, 1925, s 95 - Uniform Civil Procedure Rules 2005, r 55.11 - mortgagor/registered proprietor cannot be found - orders for substituted service upon mortgagor/registered proprietor made - mortgagor/registered proprietor primarily entitled to fund in Court - orders made for additional notice to be given to mortgagor/registered proprietor - three groups of unsecured creditors apply for payment out of the funds in Court - one has a judgment against the mortgagor/proprietor and the others have unresolved claims - whether payment out of Court should be ordered and if so on what basis - what steps should be taken to determine he unresolved claims.
Legislation Cited: Civil Procedure Act 2005, ss 98(4)(c), 106(1)(c)
Conveyancing Act 1919, ss 23C and 54A
Federal Court of Australia Act 1976, s 52
Home Building Act 1989
Uniform Civil Procedure Rules 2005, rr 39.34, 39.41, 43, 55.11
Cases Cited: Australian Customer Target Information Code
Pty Limited v Cabool Holdings Pty
Limited [2003] NSWSC 753
Beach Petroleum NL v Johnson (No. 2) (1995) 57 FCR 119
Commonwealth Bank of Australia v The Estate of the
Late Mahmoud Slieman [2010] NSWSC 661
De La Rue v Hernu Peron & Stockwell Ltd (1936) 2
KB 164
Edgar & Walker v Mead (1916) 23 CLR 29
Harmer v Federal Commissioner of Taxation (1991)
173 CLR 264
Hadid v Lenfest Communications Inc [2000] FCA 628
Hamod v State of New South Wales & Anor [2011] NSWCA 375
Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213
Hixon v Wytham (1675) 1 Cas in Ch 248
IMB Limited v Nallathambi [2009] NSWSC1387
MG Charley Pty Ltd v FH Wells Pty Ltd [1963] NSWR 22
Patterson v Cohen [2006] NSWSC 424
Humphris, in the matter of Hazelton Air Charter Pty Limited v Mentha [2002] FCA 529
Reozone Pty Ltd v Rene Santoro [2016] NSWSC
1383
Silva v Czarnikow Limited [1960] 1 Lloyd’s Rep 319
Simone Starr-Diamond v Talus Diamond (No. 4) [2013] NSWSC 811
Tudor Furnishers Limited v Montague and Finer
Production Co Ltd [1950] Ch 113
Wentworth v Rogers [2003] NSWSC 472
Westpac Banking Corporation v Morris [1998] NSWSC 66
Willmott v Barber (1881) 17 Ch D 772
Wolestoncroft v Long (1663) 1 Cas in Ch 32; 22 ER 679
Zepinic v Chateau Constructions (Aust) Ltd (No. 2) [2014] NSWCA 99
Texts Cited: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5th ed, 2014, LexisNexis Butterworths) at…

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.

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Details

Case: [2018] NSWSC 650
Decision Date: 15 May 2018

CaseChat Overview and Summary

In the case of Reozone Pty Ltd v Rene Santoro, the dispute involved surplus funds paid into the Court following the sale of real property by the mortgagee. The case was heard in the Supreme Court of New South Wales. The primary issue was the disposition of these funds, considering the mortgagor/registered proprietor could not be located. Further complicating the matter were three groups of unsecured creditors, two with unresolved claims and one holding a judgment against the mortgagor/registered proprietor.

The court needed to determine whether payment should be made to the creditors from the funds in Court and, if so, on what basis. Additionally, the court had to decide what steps should be taken to resolve the creditors' unresolved claims. The Trustee Act 1925, section 95, and the Uniform Civil Procedure Rules 2005, rule 55.11, provided the legal framework for addressing the matter. The court considered the statutory entitlement of the mortgagor/registered proprietor to the funds and the need for substituted service to ensure that the proprietor was adequately notified.

The court ruled that the mortgagor/registered proprietor was primarily entitled to the funds in Court. It ordered additional notice to be given to the proprietor to ensure they were aware of the proceedings. Regarding the unsecured creditors, the court ordered that payment should be made to the creditor with a judgment against the mortgagor/registered proprietor. For the other creditors with unresolved claims, the court mandated specific steps to be taken to determine these claims, including additional notice and a process to facilitate their resolution. The court's final orders ensured that the proprietor's rights were protected while also addressing the creditors' interests.

Orders