Weal v Bathurst City Council

[2000] NSWLEC 51

Reported Decision: 107 LGERA 396

Land and Environment Court

of New South Wales

CITATION:	Weal v Bathurst City Council and Anor [2000] NSWLEC 51
PARTIES:	APPLICANT: Weal RESPONDENT: Bathurst City Council and Anor
FILE NUMBER(S):	40179 of 1998
CORAM:	Bignold J
KEY ISSUES:	Practice & Procedure :- Power of Court to make "Mareva" order post judgment in aid of enforcement of costs order
LEGISLATION CITED:	Land and Environment Court Act 1979 s 23
CASES CITED:	Jackson v Sterling Industries Ltd (1987) 162 CLR 612· Cardile v LED Builders Pty Ltd (1999) 73 ALJR 657; Pelechowski v Registrar Court of Appeal (1999) 73 ALJR 687; Farrell v Dayban Pty Ltd (1989) 69 LGRA 415; Frigo v Culhaci (1998) NSWSC 393 (17 July 1998)
DATES OF HEARING:	13/03/00
DATE OF JUDGMENT:	03/15/2000
LEGAL REPRESENTATIVES:	APPLICANT: Mr T Hale SC with Mr E A White SOLICITORS: Writer Ryan Boesen SECOND RESPONDENT: Mr Parry, Barrister SOLICITORS; Houston Dearn O’Connor

JUDGMENT:

IN THE LAND AND Matter No . 40179 of 19983

ENVIRONMENT COURT OF Coram : Bignold J.

NEW SOUTH WALES 15 March 2000

WILLIAM JAMES WEAL

Applicant

v

BATHURST CITY COUNCIL

First Respondent

TWENTIETH SUPER PACE NOMINEES PTY LIMITED trading as SPECIALIZED CONTAINER TRANSPORT (ACN 005 855 327)

Second Respondent

JUDGMENT

Bignold J:

A. INTRODUCTION

1. This is a Notice of Motion filed by the second Respondent seeking a Mareva order against the Applicant in class 4 proceedings which challenged the validity of a development consent granted by the first Respondent to the second Respondent and which proceedings were concluded by my judgment delivered on 11 June 1999 dismissing the proceedings.

2. By my subsequent judgment, delivered on 14 September 1999, I ordered the Applicant to pay each of the Respondent’s costs in the sum agreed, or failing agreement, as assessed.

3. The second Respondent’s Notice of Motion was filed on 10 March 2000 and was heard on 13 March 2000 with the Applicant resisting the relief claimed on a number of grounds presently to be mentioned. The Motion seeks the following relief “Upon the Applicant on the Motion….giving the usual undertaking as to damages and until further order:
1. William James Weal shall not disburse the proceeds of the sale of 34 Gilmour street, Kelso otherwise than to pay the cost associated with the sale and to discharge the mortgage to the State Bank of New South Wales (the net proceeds of sale) pending the parties to the proceedings agreeing to the quantum of the costs to be paid pursuant to the order of the Land and Environment Court made on 14 September 1999 or the issue of a certificate of assessment of the costs (the costs).
2. The net proceeds of sale shall be held by the Solicitors for William James Weal in trust for the payment of the costs with the power and authority to invest the monies in an interest bearing account with First State Investments.
3. Upon the issuing of a certificate of assessment of the costs or agreement between the Applicant and the Respondent in the motion on the quantum of the costs the Respondent in the motion shall pay the costs and his obligation hereunder shall be discharged.

4. The Notice of Motion is precisely modelled on the Notice of Motion filed by the first Respondent in Court on 10 March 2000 upon which day the first Respondent sought ex parte Mareva orders. In the course of hearing that application in open Court, the Applicant in the class 4 proceedings appeared by Counsel and sought an adjournment of the first Respondent’s application until 13 March 2000 upon terms of the Applicant’s undertaking to the Court. It may be noted that upon resumption of the hearing of the first Respondent’s application, the parties thereto entered into consent orders.

5. I mention this matter because somewhat unusually, but without objection, the second Respondent read the affidavit of the first Respondent’s Solicitor filed in support of the first Respondent’s application for an ex parte Mareva order. This affidavit was virtually the only evidence advanced on behalf of the second Respondent in support of its claim to the Mareva orders.

6. As mentioned, the Applicant appeared by Senior Counsel and wholly resisted the second Respondent’s claims to relief upon the following grounds:-
1. The Court had no power to grant a Mareva order generally.
2. In particular, the Court had no power to grant a Mareva order in aid of the enforcement of a costs order made by the Court, which if and when assessed under the Legal Profession Act 1987, is only enforceable in the District Court and not in this Court.
3. If submissions 1 and 2 are rejected and the Court holds that in this case it is vested with the requisite power, the second Respondent had not established its entitlement to any relief because of the absence of evidence (or cogent evidence) that the Applicant in the class 4 proceedings was seeking to divest himself of assets in order to defeat or avoid liability for the costs order made against him in such way as to constitute an abuse of the process of this Court.
4. Finally, as a matter of discretion, the Court would decline to grant the relief claimed.

7. I shall consider each of these grounds seriatim.

B. DOES THE COURT HAVE THE POWER TO MAKE A MAREVA ORDER?

8. The parties, in argument referred to three decisions of the High Court of Australia which have considered the question of the jurisdiction or the power of courts to make a Mareva type order. These decisions are Jackson v Sterling Industries Ltd (1987) 162 CLR 612; Cardile v LED Builders Pty Ltd (1999) 73 ALJR 657; and Pelechowski v Registrar Court of Appeal (1999) 73 ALJR 687. The first two cases were concerned with the jurisdiction of the power of the Federal Court and the last mentioned case was concerned with the power of the NSW District Court.

9. In Jackson, Deane J, in giving the leading judgment said at 623:

To some extent, the general power of the English High Court of Justice to grant a Mareva injunction was initially seen as based on the provisions of s 45(1) of the Supreme Court of Judicature (Consolidation) Act 1925 (UK): see also the Supreme Court Act 1981 (UK), s 37(3). That general power should, however, now be accepted as an established part of the armoury of a court of law and equity to prevent the abuse or frustration of its process in relation to matters coming within its jurisdiction. That being so, the power to grant such relief in relation to a matter in which the Federal Court has jurisdiction is comprehended by the express grant to that Court by s 23 of the Federal Court of Australia Act of power, in relation to such matters, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate. Indeed, even in the absence of the provisions of s 23, the Federal Court would have possessed power to make such orders in relation to matters properly before it, as an incident of the general grant to it as a superior court of law and equity of the jurisdiction to deal with such matters.

10. In Cardile , the question (which was answered affirmatively) was whether the Federal Court had power in proceedings in which it had given judgment to thereafter make a Mareva order against a third party.

11. In Pelechowski, the majority of the Court (Gaudron, Gummow and Callonan JJ) held that the District Court did not have the statutory power or the implied power to make a Mareva type order, as a post judgment remedy, designed to preserve certain land as an asset of the judgment debtor so that it could be available for execution or other enforcement of the judgment debt.

12. The minority of the Court (McHugh and Kirby JJ) in separate judgments held that the District Court had the statutory power under the District Court Act 1973 s 46 to make the asset preservation order that was made.

13. In my judgment, the principle established in Jackson clearly applies to this Court as a Superior Court (albeit possessing limited jurisdiction) and so applied, it means that in proceedings within the Court’s jurisdiction, the Court is vested with the power to make a Mareva order (or asset preservation order) in appropriate cases.

14. The reasoning for the High Court’s conclusion in Jackson likewise, in my judgment, applies to this Court, particularly in respect of the relevant source of power being founded in the Land and Environment Court Act, s 23 (LEC Act) which is modelled on the Federal Court Act s 23 or alternatively, being founded in the implied powers vested in this Court as a superior court.

15. The LEC Act s 23 provides as follows:

23. The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, as the Court thinks appropriate.

16. Moreover, in proceedings such as the present class 4 proceedings, there is yet a further source of available power to make such an order, namely that conferred by the LEC Act , s 20(4) which provides as follows:

(4) The provisions of the Supreme Court Act 1970, and the rules thereunder, relating to the enforcement of judgments and orders of the Supreme Court apply to the enforcement of any judgment or order of the Court in proceedings referred to in Class 4 of its jurisdiction, and so apply as if references in those provisions to the Supreme Court were references to the Court, and with such other adaptations as may be necessary or as may be prescribed by the rules.

17. It is not surprising, in view of this Court’s specialist jurisdiction where, generally speaking (there are exceptions which need not be mentioned) and save for costs orders, its orders do not sound in orders for payment of money that the question of whether this Court has power to make a Mareva order in its civil jurisdiction has not hitherto arisen, so far as I am aware.

18. In Farrell v Dayban Pty Ltd (1989) 69 LGRA 415, in proceedings within the Court’s criminal jurisdiction, Cripps CJ held at 420:

In my opinion, the Land and Environment Court has no jurisdiction to make an order in criminal proceedings freezing general assets so as to provide a fund available for the payment of fines and costs if a defendant is convicted. In the absence of statutory power authorising the Court so to act, such an order cannot be made. Whether the courts should have such a power and if so what, if any, limitations there ought be on the exercise of that power must remain a matter for the legislature. In my opinion, there is no authority in s 23 of the Land and Environment Court Act to make such an order and such an order is not authorised by the implied power of a superior court to prevent abuse of its process.

19. In my respectful opinion, the decision in Dayban does not affect my conclusion for the reasons I have given, that in proceedings within this Court’s civil jurisdiction, this Court, as a Superior Court, is vested with the power to make Mareva orders.

20. Accordingly, I reject the Applicant’s submission that this Court lacks the requisite power.

C. CAN A MAREVA JUDGMENT BE MADE BY THE COURT POST JUDGMENT IN AID OF THE ENFORCEMENT OF THE ORDER FOR COSTS?

21. There are two aspects to the Applicant’s submission.

22. Firstly, whether a Mareva order can be made post judgment and secondly whether in the present case, the enforcement of this Court’s costs order is vested in the District Court.

23. As to whether a Mareva order can be made post judgment, although in Jackson Deane J had expressed a somewhat tentative view on this question when he said at 623:

Arguably, it extends to the making of an ancillary order after judgment to protect the efficacy of execution: see Stewart Chartering Ltd v C & O Managements SA (1980) 1All ER 718 ,

the later decisions of the High Court have answered this question resoundingly in the affirmative.

24. Thus, in Cardile, in the majority joint judgment, the following passage occurs at 667:

[43] In Australia, for many years, Mareva orders have been made in aid of the exercise of the specific remedies provided for execution against judgment debtors. Such orders are not interlocutory as they may operate after the recovery of final judgment, yet they are impermanent in the sense that they preserve assets and assist and protect the use of methods of execution and do not substitute for them.

25. In Pelechowski McHugh J at 699, tracing the rapid development of the Mareva order said:

In the course of time, the jurisdiction to issue Mareva type orders has so developed that such an order may be obtained even after judgment has been obtained in the action.

26. It follows that the Court may make a Mareva order, post judgment and in aid of execution or enforcement of its order.

27. But is the Applicant correct in his submission that in the present case, enforcement of the costs order made by this Court, once it has been assessed under the Legal Profession Act1987, is by way of the processes of the District Court?

28. The Applicant’s submission was said to be founded upon the provisions of the Legal Profession Act, s 208J which relevantly provides:

(1) On making a determination, a costs assessor is to issue to each party a certificate that sets out the determination.

(1A) A costs assessor may issue more than one certificate in relation to an application for costs assessment. Such certificates may be issued at the same time or at different stages of the assessment process.

(2) In the case of an amount of costs that has been paid, the amount (if any) by which the amount paid exceeds the amount specified in any such certificate may be recovered as a debt in a court of competent jurisdiction.

(3) In the case of an amount of costs that has not been paid, the certificate is, on the filing of the certificate in the office or registry of a court having jurisdiction to order payment of that amount of money, and with no further action, taken to be a judgment of that court for the amount of unpaid costs.

29. Upon reflection, I think, with respect, that the Applicant’s submission involves a misreading of s 208J(3). In my judgment, properly construed, s 208J(3) does not have the effect of removing from this Court’s procedures and province, the enforcement of the judgment for the amount of unpaid costs.

30. Accordingly, I must reject the Applicant’s submission.

D. HAS THE SECOND RESPONDENT ESTABLISHED ITS ENTITLEMENT TO THE MAREVA ORDER?

31. As I have earlier noted, the second Respondent relies upon the affidavit of Mr Crennan, Solicitor, that had been filed in support of the first Respondent’s application for a Mareva order.

32. That affidavit discloses that the Applicant is the owner of a property known as No 34 Gilmour Street, Kelso and that he has entered into a contract for sale (exchanged on 16 February 2000) of that property that, according to a search of the Purchaser’s Index in the Land Titles office, that is the only property owned by the Applicant. (I mention that that property has no association with the class 4 proceedings.)

33. Mr Crennan, in par 10 states:

The only asset which I have so far been able to identify as being an asset of sufficient size to be able to satisfy the order for costs …..is that property.

34. The affidavit annexes a considerable body of correspondence passing between the Solicitors for the Applicant and the Solicitors for the first Respondent concerning (i) the bill of costs that had been submitted to the Applicant and (ii) the first Respondent’s notice of intention to seek a Mareva order.

35. That correspondence includes advice that the Applicant had instructed his Solicitors that he had sufficient funds to satisfy the costs order made against him and that he had other funds deposited on investment with First State Investments.

36. In my judgment, this evidence falls far short of establishing that the Applicant, in selling his property is taking action designed to defeat his liability for the costs order, by disposing his assets.

37. The evidence really rises no higher than assertion or suspicion, on the part of Mr Crennan.

38. In Frigo v Culhaci (1998) NSWSC 393 (unreported - 17 July 1998), the NSW Court of Appeal stated:

A plaintiff must establish, by evidence and not assertion, that there is a real danger that, by reason of the defendant absconding or removing assets out of the jurisdiction or disposing of assets within the jurisdiction, the plaintiff will not be able to have the judgment satisfied if successful in the proceedings.

39. In my judgment, the second Respondent’s evidence does not establish any relevant real danger associated with the Applicant’s pending sale of his property in Kelso.

40. The second Respondent also relies upon the absence of evidence from the Applicant concerning his financial means.

41. However, the absence of evidence is not surprising, in view of the fact that the second Respondent’s evidence is mere assertion or suspicion, and the fact that the second Respondent’s Notice of Motion was filed on 10 March 2000 and made returnable on 13 March 2000.

42. In so concluding that the second Respondent’s evidence is patently deficient, it is to be recalled that a Mareva order is “not a species of anticipatory execution”: Jackson at 619 per Wilson and Dawson JJ.

43. Accordingly, I uphold the Applicant’s submission that the second Respondent has not established its entitlement to the Mareva order it seeks. On this ground alone, the second Respondent’s Notice of Motion must be dismissed.

E. THE COURT’S DISCRETION

44. In view of my conclusion that the Notice of Motion must be dismissed because the second Respondent has not established any action on the part of the Applicant designed to dispose of his assets in order to defeat enforcement of the Court’s costs order, it is not necessary to consider this question other than to repeat the caution contained in the majority judgment in Cardile at 669 that a Mareva order “requires a high degree of caution on the part of the Court invited to make an order of that kind”. The majority judgment at 669 endorsed “the tenor of what was said in respect of a Mareva order” by the NSW Court of Appeal in Frigo:

a (Mareva order) is a drastic remedy which should not be granted lightly

45. These salutary cautionary notes are, in my respectful opinion, entirely applicable to this Court’s response, in the exercise of its discretionary judgment, to the second Respondent’s Notice of Motion seeking a Mareva order in respect of a costs order made by the Court. I was not informed of any decision where a Mareva order had been made in respect of a costs order only.

46. It would be an unfortunate development in the practice of this Court if parties, having the benefit of a costs, order were to routinely seek a Mareva order in aid of the execution or enforcement of the costs order.

47. This, of course, is not to say that the discretion would not be exercised in an appropriate case.

48. It has not been necessary to comment on the form of Mareva order sought. However, the effect of the order claimed in par 3 of the Notice of Motion is objectionable on the ground that it seeks to substitute the Mareva order as the means of execution or enforcement.

F. ORDERS

49. For all the foregoing reasons, the second Respondent’s Notice of Motion is dismissed with costs.