Wentworth v Rogers

[2003] NSWSC 944

CITATION:	Wentworth v Rogers and Anor [2003] NSWSC 944
HEARING DATE(S):	15/07/2003, 19/09/2003
JUDGMENT DATE:	27 October 2003
JUDGMENT OF:	Howie J at 1
DECISION:	1. The order for costs made on 9 May 2003 is revoked; 2. The plaintiff is to pay the defendants' costs of the hearing before me on and from 29 January 2001 including the costs of this notice of motion; 3. The plaintiff is to pay the second defendant's costs before Sperling J in proceedings 19228 of 1982 and 11094 of 1995; 4. I make no order as to costs in respect of any other proceedings arising from paragraphs 4 and 5 of the plaintiff's notice of motion of 11 October 1994 or in proceedings 11094 of 1995; 5. That the orders made in these proceedings on 4 September 2001 restraining the first defendant are vacated; 6. That the second defendant is relieved from her undertakings given to the Court in these proceedings on 4 September 2001; 7. That the money paid into Court in these proceedings together with accrued interest be paid out forthwith to the first and second defendants; 8. That the above orders are stayed until 23 November 2003.
CATCHWORDS:	Costs - General Rule - costs follow the event - whether there should be a departure from the rule - whether costs should be on an indemnity basis - extent of the order for costs. Injunctions and undertakings - Injunctions for particular purposes - whether they should remain after action is dismissed - Payment into court - whether it should be paid out and to whom.
LEGISLATION CITED:	Conveyancing Act 1919 - s 37A Supreme Court Rules - Pt 47, Pt 52 r 11, Pt 52A r 22(6) Judgment Creditors Remedies Act - s 27
CASES CITED:	Degman Pty Ltd (In Liq) v Wright No. 2 [1983] 2 NSWLR 354 Latoudis v Casey (1970) CLR 534 Oshlack v Richmond River Council (1998) 193 CLR 72 Milne v Attorney-General (Tas) (1956) 95 CLR 460 Jamal v Secretary , Department of Health (1988) 14 NSWLR 252 Commissioner of Australian Federal Police v Razzi (No. 2) (1991) 30 FCR 64 Waters v P C Henderson (Australia) Pty Ltd (unreported, NSWCA, 6 July 1994) Wentworth v Rogers [1999] NSWCA 403 Wentworth v Rogers (No. 5) (1986) 6 NSWLR 534 Fountain Selected Meats (Sales) Pty Ltd v Internaitonal Produce Merchants Pty Ltd (1988) 81 ALR 397 Qantas Airways Ltd v Dilligham Corp (unreported NSWSC 14 May 1987) Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 Nobrega v Trustees of the Roman Catholic Church of the Archdiocese of Sydney (No. 2) [1999] NSWCA 133 LMI Australia Pty :Ltd v Baulderstone Hornibrook Pty Ltd [2003] NSWCA 74 Palmer Bruyn & Parker Pty Ltd v Parsons (No. 2) [2000] NSWCA 102 Wentworth v Graham [2003] NSWCA 229 SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 Skalkos v Assaf No. 2 [2002] NSWCA 236 Jones v Bradley (No. 2) [2003] NSWCA 258 Colgate Palmolive Co. Pty Ltd v Cussons Pty Ltd (1993) 46 FCR 225 Walton v McBride (1995) 36 NSWLR 440 Wentworth v Rogers [2003] NSWSC 474
PARTIES :	Katherine Wentworth v Gordon John Rogers and Anor
FILE NUMBER(S):	SC 11094/95
COUNSEL:	Plaintiff - Ms Wentworth in person 1st Defendant - No appearance (Mr Lovas mentioned for Mr Rogers) 2nd Defendant - Mr R. Lovas
SOLICITORS:	Plaintiff - in person 1st Defendant - No appearance 2nd Defendant - Dorrough Smart Solicitors

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HOWIE J

MONDAY 27 OCTOBER 2003

11094/95 - KATHERINE WENTWORTH v GORDON JOHN ROGERS AND ANOR

JUDGMENT

AS TO COSTS
Introduction

1 His Honour: On 9 May 2003 I handed down judgment in this matter and ordered that the plaintiff’s summons be dismissed and that there be verdict and judgment entered for the defendants in respect of the statement of claim. I also ordered that the plaintiff pay the defendants’ costs. However, before that order was entered, I was asked by the parties to hear further submissions on the question of costs before making final orders on that matter. I have power to consider whether the order made should be set aside or varied; Degman Pty Ltd (In Liq) v Wright No 2 [1983] 2 NSWLR 354. I received 14 pages of written submissions on behalf of the second defendant and 15 pages from the plaintiff on the question of costs prior to the hearing. These two parties made further oral submissions at a hearing on 15 July last that went for the best part of a day. The matter was then reserved. The plaintiff sought and was granted leave to file further written submissions after judgment was reserved. I received a further 16 pages of submissions from the plaintiff and a further 7 pages on behalf of the second defendant.

2 The summons and statement of claim both concerned an attempt by the plaintiff, Ms Wentworth, to have certain property transactions between the defendants, Mr and Mrs Rogers, set aside on the basis that they amounted to a fraudulent alienation. Ms Wentworth relied principally on s 37A of the Conveyancing Act and, if necessary, the inherent power of this Court to protect its own process. She contended that the mortgage and associated deed and transfer, in respect of a property, Te Mata, held initially by the defendants as joint tenants, were designed to deprive her of any chance of recovering against judgments made in her favour in this Court against Mr Rogers. For ease of reference I will refer to Ms Wentworth’s claim as “the property matter”.

3 The property matter was, to a large part, determined by findings I made in respect of a number of documents that Ms Wentworth had relied upon to prove her contention that Mr and Mrs Rogers and others had acted fraudulently to disadvantage her as a creditor of Mr Rogers. Ms Wentworth asserted that the documents were fraudulently prepared by the defendants, or on their behalf, but I was not persuaded that they were. Mr and Mrs Rogers gave evidence and I formed a favourable view of the credibility of Mrs Rogers in determining that Ms Wentworth had not made out her case.

4 In brief Ms Wentworth contends that the normal rule, that costs follow the event, should not apply in the special circumstances of this particular matter. She argues that costs should be awarded in her favour by reason of the misconduct of the defendants both before and during the hearing and what she submits was her success in respect of a number of issues that arose in the course of determining her claim. Ms Wentworth also seeks orders against Mr Lovas counsel appearing for Mrs Rogers.

5 Mrs Rogers argues that costs should be awarded in her favour on an indemnity basis for a number of reasons but principally because of what is said to be a Calderbank letter sent by her to Ms Wentworth prior to the hearing of the claim. Mr Rogers was not present at the costs hearing and relied upon the submissions made on behalf of Mrs Rogers.

6 Ms Wentworth and Mr Rogers have been engaged in litigation before this Court for almost two decades in respect of three distinct but related actions: firstly, prerogative relief in respect of the criminal proceedings brought by Ms Wentworth against Mr Rogers; secondly, a claim for damages for personal injury brought by Ms Wentworth against Mr Rogers in respect of the conduct which gave rise to the criminal proceedings; thirdly, a cross-claim by Mr Rogers for damages arising from the alleged malicious prosecution of him by Ms Wentworth. The third of those matters is still unresolved. It is only necessary to refer to the history of the property matters to resolve the present matter.

Chronology of proceedings

7 The following chronology is relevant to the questions arising on the conflicting applications for costs made by the parties. Later in the judgment I shall refer to a chronology relevant to the restraining orders and undertakings relating to Te Mata.

8 In April 1994 Mr Rogers granted a mortgage over his half share in Te Mata to Mrs Rogers purportedly as security for a debt of $130,000. In that same month Sully J severed Mr Rogers’s cross-claim from Ms Wentworth’s claim for damages. His Honour and a jury later heard Ms Wentworth’s action. On 24 June 1994 the jury awarded Ms Wentworth the sum of $2,000. Sully J ordered that Mr Rogers pay half of Ms Wentworth’s costs.

9 On 5 October 1994 Ms Wentworth sought an order from the Court of Appeal in effect reversing the property transactions in respect of Te Mata. Mr Rogers did not appear on that date. While the Court was of the view that relief should be sought in the Common Law Division, on 6 October 1994 it made orders in effect restraining Mr Rogers from further dealing with the property until 17 October 1994.

10 On 11 October 1994 Ms Wentworth by notice of motion commenced the present proceedings.

11 On 17 October 1994 the property matter came before Bruce J. Mr Rogers did not appear on that date. The matter was adjourned to 24 October and the order restraining Mr Rogers from dealing with the property was continued. No order was made as to costs.

12 On 24 October 1994 the property matter and Mr Rogers’s cross-claim came before Loveday AJ. Mr Rogers did not appear on that date. An order was made joining Mrs Rogers as a party to the property matter. On the same date Loveday AJ dismissed Mr Rogers’s cross-claim for want of prosecution. His Honour made an order that Mr Roger’s pay the plaintiff’s costs. The property matter was stood over to 14 November 1994.

13 On 14 November 1994 the property matter was stood over to the next day after Grove J disqualified himself from hearing it. On that date both defendants were present and legally represented.

14 On 15 November 1994 the property matter came again before Bruce J. Mr and Mrs Rogers sought an adjournment of the proceedings, which application Ms Wentworth initially opposed. However, after cross-examining witnesses, she consented to the application. The matter was adjourned to 12 December 1995 and Bruce J reserved the question of costs.

15 On 12 December 1994 Mr Rogers commenced proceedings to set aside the orders of Loveday AJ. The property matter was adjourned.

16 On 15 December 1994 both the property matter and Mr Rogers’s application came before Spender AJ. The defendants successfully sought an adjournment. There was no order made as to costs.

17 On 12 March 1995 the property matter came before Hulme J. Ms Wentworth sought, and was allowed, to examine Mr Rogers as to the non-production of documents. As a result of this hearing Mr Rogers produced further documents. Mrs Rogers unsuccessfully sought to have the order making her a party to the proceedings revoked. Hulme J made no order with respect to the costs of that hearing.

18 On 24 March 1995 Sperling J commenced to hear the applications then on foot, being the property matter and Mr Rogers’s application to set aside the order of Loveday AJ. After four days of the hearing Sperling J determined to sever the property matter and to proceed only with the hearing of Mr Rogers’s application. His Honour gave leave for Ms Wentworth to file a summons in substitution for notice of motion.

19 On 10 September 1996 Sperling J gave judgment setting aside the order of Loveday AJ dismissing Mr Roger’s cross-claim.

20 On 26 February 1997, Sperling J ordered that the parties file written submissions in respect of the question of costs in relation to the proceedings before him.

21 On 7 March 1997 Sperling J, while disqualifying himself from hearing any other matter between the parties, refused Ms Wentworth’s application that he disqualify himself from further dealing with matters which were consequential upon his judgment of 10 September 1996.

22 On 28 August 1997 Sperling J ordered that Ms Wentworth and Mr Russo, a solicitor, pay the “costs of and incidental to” Mr Rogers’s application on an indemnity basis.

23 On 17 September 2001 the property matter and the cross-claim came before me. Ms Wentworth initially asked me to disqualify myself but ultimately did not continue that application.

24 On 28 November 2001 I determined that the property matter should proceed in priority to the cross-claim.

25 On 7 December 2001 an application by Ms Wentworth for compulsory mediation was refused.

26 On 29 January 2002 the hearing of Ms Wentworth’s application commenced and proceeded for 24 days over that year.

Should the usual rule be followed?

27 As I have already indicated, Ms Wentworth submits that special circumstances exist in the present matter justifying a departure from the usual rule that costs follow the event. Ms Wentworth claims that she has been successful on a number of issues that fell to be decided in determining her claim and should be awarded costs in respect of those matters. Ms Wentworth submits that by reason of the prolongation of the hearing by the misconduct of the defendants and their legal representatives, including preparing false documents, concealing documents from her and the court, and swearing false affidavits, an order for costs should be made on an indemnity basis in her favour. She also seeks that action be taken as a preliminary step in ordering costs against Mrs Rogers’s barrister because of his alleged misconduct in the proceedings. Finally, Ms Wentworth seeks costs in respect of interlocutory hearings leading up to the hearing of her claim.

28 Ms Wentworth submits that she was all but successful in the matters she sought to prove at the outset of the hearing of the property matter. She interprets the reasons for judgment as indicating that she was unsuccessful in her claim only because it was found that Mrs Rogers was a “preferred creditor”. Ms Wentworth contends that she was successful in proving that the property transactions were fraudulent, being not for full consideration, and, therefore, had established the pre-conditions which should have required the Court to set them aside under s 37A of the Conveyancing Act. Ms Wentworth submits that she had “succeeded overall” on the issues and should be awarded costs.

29 Ms Wentworth also seeks that costs orders be made in her favour in respect of a number of the interlocutory proceedings leading up to the hearing before me. She claims costs in respect of the proceedings before Bruce J on 17 October 1994, Loveday AJ on 24 October 1994, Bruce J on 15 November 1994, Spender AJ on 15 December 1994, Smart AJ in February 1995 and Hulme J on 12 and 13 March 1995. In respect of the aborted proceedings before Sperling J, Ms Wentworth contends that the second defendant is estopped from seeking costs for reasons that I shall examine shortly.

30 Ms Wentworth submits that, because of “demonstrable misconduct” by both defendants and counsel appearing for Mrs Rogers, costs should be ordered in her favour against them. Ms Wentworth relies upon submissions she made during the hearing and after judgment was delivered as to allegations of false swearing by both defendants, the concealment of documents, forging of documents and other misconduct by the defendants. Ms Wentworth alleges that Mrs Rogers’s counsel assisted the defendants in this regard with the intention of defrauding Ms Wentworth and misleading the Court.

The normal rule should apply

31 In my opinion there is no reason to depart from the normal rule in the present case and Ms Wentworth should pay the costs of the defendants in respect of the hearing before me.

32 I acknowledge that there is a broad discretion to be exercised by the Court in a judicial and principled way in making orders in respect of the payment of costs. That discretion goes so far as permitting the Court in an appropriate case to depart from the normal rule to a greater or lesser extent depending upon the circumstances of the case, see Pt 52 r 11 of Supreme Court Rules. The width of the discretion was emphasised in Latoudis v Casey (1970) CLR 534 especially by Dawson J at 557: the discretion is only fettered by such guidelines and principles as are formulated to ensure consistency of approach and prevent arbitrariness in its exercise. The fundamental principle in exercising the discretion appears to me to be that the rationale for the awarding of costs is to indemnify the successful party and not to punish the party who was unsuccessful.

33 In Latoudis v Casey at 542 Mason CJ stated that "in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant”. This statement was considered and accepted as a statement of general principle in Oshlack v Richmond River Council (1998) 193 CLR 72. The difference of opinion between the members of the Court in that case was the principle applied in the particular case under consideration. The principle accords with what the High Court has identified as a general rule “that a wholly successful defendant should receive his costs unless good reason is shown to the contrary"; Milne v Attorney-General (Tas) (1956) 95 CLR 460 at 477. But this is merely one of the guidelines that assist in the exercise of the broad discretion and the successful party has no right to have costs awarded in its favour: Oshlack v Richmond River Council per Gaudron and Gummow JJ at [35].

34 In Oshlack v Richmond River Council McHugh J considered the circumstances in which an exception to the general rule might arise, including cases where there has been misconduct by the successful party. His Honour stated at [69] (omitting the footnotes):

The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd, Devlin J formulated the relevant principle as follows:
"No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct."
“Misconduct" in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute.

35 Kirby J also considered a discretion to award costs that is given to a court by the legislature in broad, unfettered terms. His Honour stated that a number of general remarks could be made about such a power. Number 2 of those general remarks was at [134] (omitting the footnotes):

Notwithstanding the width of the statutory language by which the discretion was conferred on the trial court, it came to be said in civil non-jury trials that a successful party, in the absence of special circumstances, had a reasonable expectation of obtaining an order for costs in its favour unless "for some reason connected with the case" a different order was specially warranted. Any departure from this expectation would require that there should be material upon which the adverse discretion could be properly exercised. It could not be exercised by reference to idiosyncratic notions or to facts and circumstances irrelevant to the case. Yet, until the discretion had been exercised and a costs order made in favour of a successful party, that party had no right to the order of costs, notwithstanding its success in the litigation.

36 Number 4 of those general statements was (footnotes not reproduced):

It is because the general purpose of an order for costs in favour of a successful party is to provide compensation in the form of a partial indemnity for the costs incurred that the ordinary principle observed in civil litigation under the "English rule" (as contrasted to the "American rule") is that legal costs will usually be ordered in favour of the successful party. Absent special statutory provisions, Australian law has followed this English rule. But the compensatory principle cannot be treated as an absolute rule. Otherwise, the discretion conferred in unqualified terms would indeed be shackled and confined. To permit this would be incompatible with statutory language expressed in such terms. Therefore, although there are rules" or ordinary principles which will guide the donee of power in the exercise of the discretion, they cannot extinguish the element of discretion. They must not be allowed to harden into rigid or inflexible requirements.

37 I also accept that one qualification of the ordinary rule may be where there are multiple and discreet issues arising in the hearing and the successful party in the proceedings was not successful in respect of an issue or issues that that party chose to raise and which resulted in significant detriment to the unsuccessful party. That detriment may be found in costs being unnecessarily expended by the unsuccessful party as a result of the prolongation of the proceedings or in contesting the issue; Jamal v Secretary, Department of Health (1988) 14 NSWLR 252 at 271-272. The rationale behind this approach is an attempt to limit the matters placed in dispute by the parties in a climate of increasing court delays and high costs of litigation: Commissioner of Australian Federal Police v Razzi (No 2) (1991) 30 FCR 64 at 69. These were cases dealing with appeals but the principle can be no different at first instance.

38 But even where such discreet issues can be identified, it does not necessarily follow that the Court should embark upon the task of apportioning the costs based upon the time or effort consumed in dealing with each issue during the hearing; Waters v P C Henderson (Australia) Pty Ltd (unreported, NSWCA, 6 July 1994) per Mahoney JA. The question of the appropriate order for costs in a particular case is ultimately an exercise of discretion to arrive at a fair and just result as between the parties by applying recognised principles. Unless a particular issue or group of issues is clearly dominant and separable, it will ordinarily be appropriate to order the costs of the proceedings be paid by the unsuccessful party; Waters v P C Henderson, above.

39 Ms Wentworth’s submission that she should receive an order for costs in her favour because she succeeded on a number of issues that fell to be determined and only failed at the final hurdle, as it were, should be rejected even if it is assumed that the submission is based upon an accurate reflection of the findings in the judgment dismissing her action. It is not a case of the court assessing how close the unsuccessful party came to success and determining the issue of costs accordingly. In Latoudis v Casey McHugh J stated at 567 (my underlining):

The rationale of the order [for costs] is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings . It may, and usually will, be made even though the action has failed through no fault of the unsuccessful party

40 In the present case there were no discrete factual issues raised, contested and determined adversely to the defendants that would justify the court determining the question of costs in the way that Ms Wentworth seeks. Ms Wentworth brought the action and she had to prove a number of factual matters before s 37A of the Conveyancing Act or the inherent jurisdiction of the Court was engaged. She failed in that endeavour. The type of relief that she sought and the evidence upon which she relied to support her claim raised the issues that had to be determined during the hearing. None of them were so predominant or separable that any success she may have had on any one or more issues should result in an order of costs in her favour.

41 In any event I do not believe that Ms Wentworth had the success that she claims. I do not intend to canvass the issues raised and determined by the judgment or Ms Wentworth’s complaints about factual and legal errors in it. The simple fact is that it was held that Ms Wentworth failed to prove what she set out to establish: that the defendants acted fraudulently in carrying out the property transactions and preparing documents said by them to support the justification for those transactions.

42 Nor was there misconduct by the defendants in the conduct of or leading up to the proceedings that would warrant their being deprived of an order to which they were otherwise entitled. Ms Wentworth persists in allegations of false swearing and perjury against the defendants notwithstanding the findings in the judgment. She complains that the defendants and their legal representatives intentionally failed to produce documents until the hearing. But in light of the history of the litigation and the conduct of the hearing I do not believe that, even were that complaint justified, it should affect the order as to costs.

43 There is no matter in my view that amounts to misconduct of the type to which McHugh J referred. I am prepared to accept that his Honour was not endeavouring to state exhaustively the list of matters that might disentitle a successful party to some or all of its costs. But the conduct must be such that reflects upon the question of what order is just and reasonable to compensate the successful party in the litigation. It is not a case of making an order to punish the party for misconduct per se but what is necessary to compensate the other party for costs caused by the misconduct, for example where it unreasonably prolonged the litigation, see for example Degman Pty Ltd (In Liq) v Wright No 2, above at 358D.

44 It does not seem to me that the situation is any different in respect to any power that the Court has to make an order on the issue of costs in respect of a legal practitioner. The power to deal with orders for costs against solicitors was considered by the Court of Appeal in dismissing appeals by Ms Wentworth and Mr Russo against the costs orders made by Sperling J, Wentworth v Rogers [1999] NSWCA 403. The Court of Appeal referred to dicta in a number of English authorities as to the principles upon which such an order should be made against a solicitor and held that they were applicable to the power to be exercised by a court in this State. The authorities referred to establish that the power is not exercised to punish the practitioner but to protect his client and to indemnify the party who has suffered as a result of the misconduct.

45 Ms Wentworth relies upon what is said to be the misconduct of Mr Lovas in being a party to false evidence being placed before Bruce J, before Sperling J and before me. There is in my view no basis for the allegations and they are to some extent inconsistent with findings made by Sperling J and myself. There is no occasion for Mr Lovas to be called upon to account for any of his conduct in the proceedings on the issue of the order of costs. In any event there is in my view no misconduct of the defendants that should sound in costs being awarded in favour of Ms Wentworth taking into account the whole of the conduct of the proceedings by both the defendants and Ms Wentworth.

Should costs be ordered on an indemnity basis?

46 Mrs Rogers submits that costs be awarded in her favour on an indemnity basis. The following matters were raised in submissions made in support of that proposition. However, Mr Lovas, counsel for the second defendant, stressed that the Court should consider each of these matters in combination.

(a) “the plaintiff as a litigant-in-person”

47 It was acknowledged that it was a “weighty consideration” in her favour that Ms Wentworth represented herself throughout the proceedings for this matter. In Wentworth v Rogers (No5) (1986) 6 NSWLR 534 at 542 the Court of Appeal declined to order that costs awarded against the unsuccessful appellant be on an indemnity basis for a number of reasons, one of which was that the respondent, the present plaintiff, was unrepresented. Other considerations were that the Court did not consider that the appeal had been brought to prolong the litigation or that the appellant had been deliberately false or that she made allegations that she knew to be false.

48 The fact that the litigant is unrepresented cannot be itself a bar to an order that costs be awarded on an indemnity basis. If it were, it would simply encourage a litigant-in-person to engage in the type of conduct that might justify such an order were the litigant represented. But it is clearly one of the matters that need to be taken into account by the court in the exercise of its discretion. What weight is to be given to it will depend upon all the circumstances of the case and the nature of the conduct that is said to justify costs being assessed on an indemnity basis. However, Ms Wentworth is now an experienced litigator and would be well aware of the possible consequences of her actions in the conduct of litigation were she unsuccessful. In the present case she clearly gave thought to the way she would conduct the claim as evidenced by the numerous and lengthy written submissions she filed during the proceedings. I do not believe that the fact that Ms Wentworth is unrepresented is a matter of any significant weight in the present case.

(b) “the plaintiff did not merely lose or lose merely because of findings on credibility”

49 It is submitted on behalf of Mrs Rogers that having regard to the judgment dismissing Ms Wentworth’s claim and the findings made as to the evidence and the arguments relied upon by her, it should be inferred that the action was false or deliberately concocted, brought for some ulterior motive, or in disregard of known facts or established law. Reliance is placed upon Degman Pty Ltd (In Liq) v Wright No 2, above, and Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401. Again, as the latter case makes clear, if such an inference is drawn, it is a matter to be considered in determining how the court should exercise its discretion.

50 Ms Wentworth submitted that there was no basis upon which the Court could infer or conclude that her action was “false or deliberately concocted” or that there were known facts which she disregarded.

(c) “the plaintiff made it up as she was going along”

51 Relying upon a statement by Rogers J in Qantas Airways Ltd v Dillingham Corp (unreported NSWSC 14 May 1987) when awarding costs on an indemnity basis, it was submitted on behalf of Mrs Rogers that it was intolerable that she had to consider and respond to “the many (and often contradictory) written submissions, pleadings and amended pleadings produced before, during and after the hearing”.

52 Ms Wentworth submitted that there was nothing in the present proceedings that required Mrs Rogers to do other than “respond to the normal incidents of litigation such as pleading and submissions”. She submitted that insofar as she might have shifted ground during the hearing, this was because of the actions of the defendants in delaying the production of documents or items, such as the typewriter, until the hearing.

(d) “the litigation should have been re-assessed”

53 It was submitted that Ms Wentworth had opportunities both before and during the hearing to re-assess her prospects of success. In particular the events which it is said should have given rise to reflection were: sometime before 16 March 1995 when it is apparent that she had fully appreciated the defence answer to her claim; when she received the “Calderbank letter” on 5 December 2001; when during the course of the hearing she received the reports of the document examiners.

54 Ms Wentworth submits that neither this ground nor any of the other matters relied upon would support the making of an order for costs on an indemnity basis.

(e) “the Calderbank letter”

55 It was submitted that because a letter sent to Ms Wentworth on behalf of Mrs Rogers amounted to an offer of settlement that was rejected and because Mrs Rogers obtained a substantially better result than was offered, Ms Wentworth should pay costs from the date of the letter, 5 December 2001, on an indemnity basis. In support of this contention reliance was initially placed upon the judgment of Rolfe J in Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 at 451-452. However, in further written submissions it was acknowledged that certain aspects of this decision had been disapproved by the Court of Appeal in Nobrega v Trustees of the Roman Catholic Church of the Archdiocese of Sydney (No 2) [1999] NSWCA 133 and LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2003] NSWCA 74.

56 The letter upon which Mrs Rogers relies was sent to Mrs Wentworth by the solicitors acting for Mrs Rogers. It was dated 5 December 2001, that is a date after the Court had determined that the property matter would be heard before the cross-claim. In substance it was as follows:

We convey the following offer of settlement to you on behalf of our client.

In proceedings No 11094 of 1995, the second defendant will consent to orders to the following effect:

By consent and without admissions or inferences by any party
1. The Plaintiff discontinues these proceedings
2. All injunctions made by the Court and undertakings given to the Court in these proceedings be vacated
3. Each party to bear his or her own costs in and incidental to the whole of these proceedings.

This offer may only be accepted by written communication subscribed by Mrs Wentworth and received in this office at or before 4.00 pm on Friday 21st December 2001.

57 Mrs Rogers submits that, “short of capitulating completely” to Ms Wentworth’s claims, this was the only compromise available to her in proceedings that were principally between Ms Wentworth and Mr Rogers. She points to the fact that a significant amount of costs had been already incurred by the time the offer was made including four days of hearing before Sperling J.

58 Ms Wentworth, relying upon the decision Palmer Bruyn & Parker Pty Ltd v Parsons (No 2) [2000] NSWCA 102, submitted that a defendant is not entitled to rely upon an offer of compromise to found an order for indemnity costs. But that decision recognised that a defendant at general law, as distinct from under Pt 52A r 22(6) of the Supreme Court Rules, may be entitled to indemnity costs where a plaintiff has failed completely in the action. Ms Wentworth also denied that the document had the effect of a Calderbank letter or that it was an offer of compromise that would affect the exercise of discretion in the present case.

(f) “Future conduct”

59 It was submitted on Mrs Rogers’s behalf that there would be a reasonable apprehension held by the Court that Ms Wentworth “will make the cost assessment procedure long and difficult”. To support that submission reliance was placed upon what was said to be “the extraordinary volume of litigation that the plaintiff has initiated over Sperling J’s costs orders made against Ms Wentworth and Mr Russo”. There is set out in the submissions on behalf of Mrs Rogers a schedule of judgments said to relate to proceedings instituted by Ms Wentworth in connection with the costs orders made by Sperling J. It is asserted that the costs assessment remains incomplete notwithstanding the litigation referred to in the schedule. In effect the submission is that an order that the costs be ordered on an indemnity basis would protect Mrs Rogers as a form of “insurance”.

60 This is not in my view a proper matter for this Court to take into consideration in determining whether to order costs on an indemnity basis either by itself or in conjunction with the other matters relied upon by Mrs Rogers. It is not for this Court to attempt to regulate or control the conduct of other proceedings, whether they be in relation to the assessment of costs or otherwise. It is for the court that has the jurisdiction to take what action it considers necessary to prevent an abuse of its process by a litigant before it. The Court of Appeal has recently exercised such a power in respect of proceedings then before it: Wentworth v Graham [2003] NSWCA 229. I do not believe that I am entitled to exercise some power or discretion that I may have for the purpose of influencing the conduct of proceedings in this Court over which I have no control. Presumably none of the Courts, to which reference is made in the schedule contained in the submissions, have thought it was necessary to exercise such a power in respect of the proceedings before them. I should not infer that Ms Wentworth has acted improperly or vexatiously in respect of the applications she has brought to those courts.

Costs should be awarded on a party and party basis

61 The ordinary rule is that costs should be awarded on a party and party basis unless there is some special circumstance that justifies a different result. But the discretion is a broad one and there is no rule that any particular matter should affect the manner in which that discretion is exercised Nobrega at [20]. In particular, the failure to do better at trial than an offer made in a Calderbank letter is only one consideration amongst many to be taken into account in determining whether special circumstances exist and does not of itself warrant a departure from the ordinary rules; SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37] Skalkos v Assaf No 2 [2002] NSWCA 236 at [13], LMI Australia, above at [119]. Most recently in Jones v Bradley (No2) [2003] NSWCA 258 the Court of Appeal confirmed that the approach taken in SMEC Testing Services was correct.

62 Ms Wentworth submitted that there was nothing in the conduct of the case by her that would justify an order of indemnity costs according to the principles discussed by Sheppard J in Colgate Palmolive Co Pty Ltd v Cussons Pty Ltd (1993) 46 FCR 225. In that case, after considering a large number of authorities on the question of whether an order for indemnity costs should be made, Sheppard J set out what he considered to be the principles that could be extracted from those authorities. Although noting that the categories of cases in which an award of indemnity costs would be appropriate were not closed, his Honour set out at page 233 of the reported judgment the circumstances in which courts had made such orders in the past. I do not intend to reproduce what his Honour set out in the paragraph numbered “5” which appears on that page, but I have had regard to it.

63 Notwithstanding that there may be justifiable criticism of the way the litigation was conducted by Ms Wentworth, I do not believe that it was of such a nature that it alone warrants a departure from the ordinary rule as to the basis upon which costs should be ordered. The conduct complained of does not lead me to the conclusion that the Court “must mark its disapproval for wrongful conduct by departing from the ordinary principle of costs and relieving the ‘innocent’ party of the burden of costs inflicted by the wrongful action of the losing party”; Walton v McBride (1995) 36 NSWLR 440 at 451E.

64 It is clear to me that Ms Wentworth believed throughout the proceedings, and still does believe, that she has been the victim of a fraud perpetrated by the defendants. There was some reasonable basis for that belief before the hearing commenced having regard to the timing of the transactions, the unsatisfactory nature of the October list prepared by Mr Rogers as justification for the transactions, the erroneous attribution on a cheque butt when making that list and the proved unreliability of Mr Rogers as a witness on certain matters. The late production of documents, including the 1981 and 1983 indemnity documents, would have fuelled that belief.

65 Although Ms Wentworth, at least by the conclusion of the hearing, asserted that the fraudulent behaviour in respect of the transactions extended to persons in addition to the defendants and although some of the allegations made in her final submissions had no evidentiary basis at all, these are not matters which in my view should lead to a conclusion that costs should be awarded on an indemnity basis. It is unnecessary to investigate or determine the extent to which any of the allegations raised by Ms Wentworth in prosecuting her claim were false or knowingly false. In my view they did not significantly extend the hearing or in any other way cause the defendants a detriment in respect of which they should be indemnified: see Wentworth v Rogers (No 5), above, and Walton v McBride (1995) 36 NSWLR 440 at 451 per Kirby P.

66 Nor does the rejection of the settlement offer made by Mrs Rogers and the subsequent result of the proceedings lead me to a different view. It should be noted that the offer was not simply for Ms Wentworth to abandon her action against Mrs Rogers, but that she abandon the proceedings as a whole. In light of Ms Wentworth’s belief that the property transactions were carried out in order to defeat her entitlement to be paid, it was not unreasonable, in my view, for her to have proceeded notwithstanding the offer that was made.

67 In my opinion, whether the Court regards each of the particular matters raised by Mrs Rogers individually or taken together, there has not been shown a sufficient basis to exercise the discretion to order costs otherwise than in the usual way.

68 Ms Wentworth has submitted that the costs of the application for indemnity costs should be awarded to her on the basis that it was frivolous. I do not believe it was, notwithstanding that I do not intend to make the order.

The extent of the order for costs

69 Mrs Rogers submits that in this particular case, given the history of the proceedings recounted above, the order made should be explicit as to the scope of the liability of Ms Wentworth to pay the costs of the defendants. It was submitted that the Court should indicate that the costs order made on 9 May last was intended to relate to all of the costs of the defendants in responding to the plaintiff’s claim where no specific costs order has been made. However, as I have indicated, Ms Wentworth submits that the defendants should pay the costs of particular interlocutory hearings.

(a) Costs of proceedings before Sperling J

70 A major issue of dispute before me was whether I should order costs in relation to the aborted hearing of this matter before Sperling J. As I have indicated above, Sperling J heard evidence over four days relating both to the property matter and Mr Rogers’s application with respect to the cross-claim before determining to sever the matters and hear Mr Rogers’s application first. Although Sperling J made costs orders in favour of Mr Rogers, including that part of the hearing relating to the property matter, he did not make, and was not asked to make, orders in relation to Mrs Rogers.

71 The Court of Appeal dismissed an appeal against the orders for costs made by Sperling J. Ms Wentworth is seeking special leave to appeal to the High Court against that judgment.

72 Ms Wentworth has submitted that Mrs Rogers is not entitled to be awarded costs in relation to the aborted hearing of the property matter before Sperling J. She contends that Mrs Rogers is estopped from seeking costs. She also argues that it was not appropriate for costs to be awarded to both Mr and Mrs Rogers because of their common interest in the proceedings.

73 I do not believe that there is any reason why Mrs Rogers should not seek costs in relation to the hearing before Sperling J in so far as they involved the property matter. It seems to me that his Honour reserved the question of costs in relation to Mrs Rogers and, until the application to disqualify himself was made by Ms Wentworth, intended to continue the hearing of the property matter before him. I do not believe that his Honour’s decision of 28 August 1997 was intended to bind Mrs Rogers nor does so. Although his Honour awarded costs on an indemnity basis in favour of Mr Rogers, I do not intend to do so in respect of Mrs Rogers.

74 Nor do I believe that the interests of Mrs Rogers in the property matter were identical to that of Mr Rogers such that only one order for costs would be appropriate. Mrs Rogers was seeking to defend the mortgage as a bona fide purchaser for value regardless of what might have been the intention or motive of Mr Rogers in granting the mortgage to her. It was appropriate, in my view, that they remained at arm’s length by being separately represented before Sperling J. Although Ms Wentworth was asserting that the defendants acted jointly in perpetrating a fraud upon her and both the defendants sought to deny that allegation, it does not follow in my mind that their interests were identical.

(b) Costs of other interlocutory applications and adjournments

75 Ms Wentworth seeks costs orders in relation to a number of hearings that have occurred during the protracted course of this litigation. These include: adjournment applications by the defendants before Bruce J on 14 and 15 October 1994; a hearing before Bruce J on 17 October 1994 when Mr Rogers did not appear; adjournment applications by the defendants before Bruce J on 15 November 1994; adjournment applications by the defendants before Spender J in December 1994; application before Smart J in February 1995; application before Hulme J for production and by Mrs Rogers that the property matter be struck out; application before Sully J in August 1995; applications before me in November 2001 by the defendants seeking that the property matters proceed after the cross-claim.

76 The second defendant seeks order for costs in relation to the determination of Sperling J to disqualify himself.

77 In my view there should be no order made in respect of these other hearings. The parties were entitled to seek orders from the various judges who heard the applications but did not do so. In particular, Ms Wentworth was entitled to seek an order for costs in relation to the adjournment applications and the Judge who heard the application could then have considered whether some order should be made for the costs of the application. I do not intend for the purpose of determining the issue of costs to seek to rule upon Ms Wentworth’s assertion that an adjournment was obtained by false evidence. In that regard it is pertinent here to set out part of Ms Wentworth’s submissions in respect of this matter:

There has been, as a result of that false adjournment application, a further nine years of litigation the plaintiff has been subjected to by the rapist and fraudster and his co-fraudster wife and their fraudster legal representatives.

And further:

The whole legal profession is aware of the legal frauds being committed but for reasons which do not emerge, the Court is doing nothing to protect a rape victim either from harassment of her by the rapist by his ongoing litigation in contempt of the orders of the Family Law Court, and the frauds being committed by the rapist and his wife to prevent the rape victim from obtaining satisfaction of her costs judgments orders made against the rapist outstanding from 1987, 16 years, and from 1994 and 1995, nine and eight years respectively.

78 I do not believe it is necessary to order costs in respect of any of the proceedings before me leading up to the hearing. The defendants were entitled to seek to have the cross-claim given priority and were only unsuccessful because I believed, quite erroneously, that the property matter could be heard expeditiously and further that Sperling J’s orders in respect to the cross-claim were subject to an application for special leave to appeal.

79 I do not intend to make any order in respect of an application made by Ms Wentworth that counsel for the second defendant be called upon to show cause why he should not indemnify Ms Wentworth for costs ordered against her or otherwise be penalised for misconduct. I do not believe that there is any reasonable basis for such a step to be taken on the material before me. The “prima facie inferences” which Ms Wentworth relies upon to justify such a step are not ones that I am prepared to draw.

AS TO RESTRAINING ORDERS, UNDERTAKINGS AND MONEY IN COURT

80 As a consequence of the decision to dismiss Ms Wentworth’s claim the issue arises as to what orders should be made in respect of injunctive orders made and undertakings given with respect to further dealings by Mr and Mrs Rogers with their interests in Te Mata. Further, Mr and Mrs Rogers paid a sum of money into court after one of the two lots, which made up the property, was released from the restraining order and undertaking so that it could be sold. There is a dispute between the parties as to what should now be done with the proceeds of the sale that are still being held by the Court. There is also a dispute as to whether I should dissolve the injunction and relieve Mrs Rogers from her undertaking.

81 In order to resolve these disputes and bring to a conclusion the protracted proceedings before me, it is necessary to recite the history of the restraining order and undertaking in some detail.

History of injunctions and undertakings

82 Following the hearing of Ms Wentworth’s claim before Sully J, Mr Rogers lodged an appeal and Ms Wentworth cross-appealed in relation to interest on the amount of the judgment. Mr Rogers eventually withdrew his appeal and Ms Wentworth succeeded on the cross-appeal.

83 On 24 September 1994 Ms Wentworth brought a notice of motion before the Court of Appeal seeking to have the property transactions relating to Te Mata set aside. The motion was supported by an affidavit that annexed some correspondence between the legal representatives of Ms Wentworth and Mr Rogers. One document was a letter written by the then solicitors for Mr Rogers to the solicitor for Ms Wentworth and dated 24 September 1994. It contained the following paragraph in reference to Mr Rogers:

Apart from your client under whatever costs order she ultimately obtains and ourselves his only other creditor is the Legal Aid Commission and when your client’s debts be ascertained he proposes placing his affairs in the hand of the Official Receiver in Bankruptcy by presenting a Debtor’s Petition.

84 That affidavit also annexed copies of documents from the Land Titles Office relating to Te Mata including the transfer and the mortgage to Mrs Rogers.

85 On 5 October 1994 the matter was again before the Court of Appeal but there was no appearance of Mr Rogers. Ms Wentworth addressed the Court in support of an order restraining Mr Rogers from further dealing with the property. The following occurred during the course of submissions by Ms Wentworth:

Our main concern is this property remain in ownership and not be dealt with in any way until such time as (a) the costs can be ascertained; (b) what moneys Mr Rogers owes me. You will see from Annexure A these full costs are to the extent of some hundreds of thousands of dollars and if only half costs it is still some hundreds of thousands of dollars and most probably to the value of the property in any event.

What I want to be certain of at the end of the day is I can meet my liabilities. It would be a strange matter after eleven years down the track he can divest himself of his assets and I can’t pay my legal fees. That is not a matter of equity which this Court would tolerate and the Court has always been very careful in circumstances like this where people take action to defeat a judgment of divesting themselves particularly when the solicitor who has been here facing this Court is entering into these schemes, clearly in anticipation his client is going to lose, then we would say we are entitled therefore to relief on equitable grounds of a restraint of sale for the first matter so that we can (a) quantify and then ask the court to deal with any further disposition, divesting, alteration of entitlements etcetera as the order seeks.

He has clearly we would say to the satisfaction of the Court entered into agreements, transfers etcetera with the intention of divesting himself of property and we would ask for such matters to be restrained, any sales to be restrained or any clause (sic) on the property by the Legal Aid Commission or Mrs Rogers.

HANDLEY JA: How can we restrain the Legal Aid Commission or Mrs Rogers? They are not served and they are not parties.

WENTWORTH: The restraints, which can be put upon the property itself, we would say are such as should preserve the property and allow for these matters to proceed in an orderly fashion. Nobody understands better than we do the real problems we are facing at the moment. We are suddenly met with a scheme of divestiture. We tried to meet it to seek relief from the Court to stop any further divestiture and to put in vacuo the divestitures which have taken place for a period of time until the Court can hear this application in full.

PRIESTLY JA: What you have been narrowing it down to towards the finish of what you are saying represents the limit of what the Court can do.

WENTWORTH: I think that is right.

PRIESTLY JA: The most that the Court would consider, as I see it, would be making a temporary order restraining any further dealing with the property, which would expire at a certain date at which time application would have to be made either by Mr Rogers to discharge it or by you to continue it. That method would enable the Court to be certain he was fully aware of what was going on, give him a chance to do whatever he wants about it and for the brief period which would be involved would protect your position as far as could be protected.

WENTWORTH: We think that is appropriate.

PRIESTLY JA: That is what we will consider. It is not a concluded view.

WENTWORTH: We probably cannot ask for more than that at the moment. We have come up here seeking a final order that in the interim until that is determined we would seek some interim relief for a limited period.

PRIESTLY JA: What we have in mind to do is to reserve on the matters argued on the appeal and reserving on the matters argued on the notice of motion with the exception for your request for an order under par 4. In regard to that we will retire and we will consider whether we can make an order along the lines we have been discussing.

SHORT ADJOURNMENT

PRIESTLY JA: Ms Wentworth, the Court has considered what we were talking about earlier and has it in mind to grant limited relief somewhat along the lines of what you and I were discussing before the adjournment. But because of various time problems and constraints we won’t be able to make the order until 2 o'clock tomorrow.

We will stand this matter over until 2 pm tomorrow.

WENTWORTH: Can I say this, Mr Russo says I did not really defend what I wanted on the other orders.

If your Honours were not minded to deal with the notice of motion we would seek to remit the matter to a single judge of the Common Law Division to be heard within a certain period, say within 21 days and notice to be called on on that day and we would then undertake to advise Mr Rogers through his solicitors and by certified mail of any orders the Court made.

PRIESTLY JA: We did have the general position fairly substantially in mind, but Mr Russo did improve it.

We will not deliver judgment on the matters I said we would be reserving earlier, tomorrow. But we will be sitting only for the purpose of making the limited order we have indicated.

The Court then adjourned.

86 On 6 October 1994 the matter was again before the Court. Before delivering the judgment of the Court and making consequential orders, Priestly JA said:

Ms Wentworth, the Court is prepared to grant limited relief for a limited time. One of the conditions of such grant is that you give to the Court the usual undertaking as to damages are you prepared to do that?

RESPONDENT: Yes, your Honour.

87 Justice Priestly then gave the following judgment:

Yesterday the Court resumed the hearing of a part heard appeal. One of the parties, Ms Wentworth, had filed a notice of motion seeking orders related to the subject matter of the appeal. This notice of motion was also returnable yesterday. The argument on the appeal was completed and so was that on the notice of motion.

The Court has reserved its decision both on the appeal and the notice of motion but one aspect of the notice of motion requires an immediate answer.

Ms Wentworth sought what was in effect an injunction of the Mareva kind for what may be called, in a shorthand way, Mareva type reasons.

The evidence and submissions in support of the application had deficiencies, some of which were discussed with her and which, while not fatal on an ex parte application, which is the basis on which the Court has dealt with this aspect of the matter, will need to be overcome if she is to obtained a continuation of the injunction this Court proposes to grant.

Notwithstanding the deficiencies in the material that I mentioned, we think that material is sufficient to justify the making of a temporary holding order. Among other considerations it seems that Mr Rogers, the other party, has failed to comply with a notice to produce.

The orders the Court makes are: Upon Ms Wentworth, the cross appellant, giving to the Court the usual undertaking as to damages:

1. Until and including 17 October 1994 or the earlier order of the Court, the cross respondent, Mr Rogers, by himself, his servants and agents, be restrained from further encumbering his interest in the land comprised in Certificate of Title Folio Identifier 71/615640 and Certificate of Title Folio Identifier 72/615640, or from disposing of his interest in the land comprised in either of those Certificates of Title.

2. That the cross appellant have leave to file a summons in the Common Law Division, returnable on 17 October 1994, claiming a continuation of this injunction and such other relief as she may be advised.

The Court then made further orders in respect of service of notices, granting liberty to the parties to approach the Duty Judge, and reserving the question of costs and remitting it to the Common Law Division.

88 Ms Wentworth then filed a notice of motion seeking that the cross-claim be dismissed and seeking costs on an indemnity basis. The notice of motion sought, amongst other relief, the following two orders:

4. That Gordon John Rogers, the Cross Claimant by himself, his servants and agents be permanently restrained from further encumbering his interest in the land comprised in Certificate of Title Folio Identifier 71/615640 and Certificate of Title Folio Identifier 72/615640 or from disposing of his interest in the land comprised in either of those Certificates of Title;

5. That in so far as Gordon John Rogers by himself his servants and agents has entered into agreements, arrangements, deeds, mortgagors, [t]ransfers, deeds of charge and encumbrances from 30 May 1993 in relation to his interest in the land comprised in Certificate of Title Folio Identifier 71/615640 and Certificate of Title Folio Identifier 72/615640 or has disposed of, divested himself of, or altered his entitlements in his interest in the land comprised in either of the Certificate of Title, that any such agreements, arrangements, deeds, mortgages, transfers, deeds of charge and encumbrances be set aside.

89 The notice of motion came before Bruce J. on 17 October 1994. Mr Rogers did not appear and the matter was stood over to 24 October 1994. The injunction granted by the Court of Appeal was continued until 14 November 1994.

90 On 24 October 1994 Loveday AJ dismissed the cross-claim and added Mrs Rogers as second defendant to the notice of motion in light of the order sought by Ms Wentworth setting aside the 1994 property transactions. This was, at that stage, the only outstanding order sought by Ms Wentworth in respect of these proceedings. The injunction was continued.

91 Thereafter there were a number of hearings in relation to Ms Wentworth’s claim to have the property transactions set aside. On each occasion, where it was necessary to do so, the injunctive relief initially granted by the Court of Appeal was continued to a date specified by the Court.

92 On 12 December 1994, by notice of motion, Mr Rogers sought to have the order dismissing his cross-claim set aside.

93 On 28 February 1995 Mrs Rogers filed a notice of motion seeking orders including that the order of Loveday AJ joining her as a defendant be set aside and that paragraphs 4 and 5 of Ms Wentworth’s notice of motion, set out above, be struck out.

94 On 7 March 1995 Ms Wentworth filed a notice of motion seeking orders that the notices of motion filed by both Mr and Mrs Rogers be dismissed and further that Mrs Rogers be restrained from dealing with her interest in Te Mata.

95 On 23 March 1995 Sperling J commenced a hearing of the notices of motion.

96 On 30 March 1995, as a consequence of orders made by Sperling J on 28 March, Ms Wentworth filed a summons naming Mr and Mrs Rogers as defendants and seeking orders in the nature of those contained in paragraphs 4 and 5 of her notice of motion. The summons also sought an order restraining Mrs Rogers from dealing with her interest in Te Mata. The proceedings relating to the property matters became No 11094/95.

97 On 31 March 1995, Sperling J determined to proceed with Mr Rogers’s application to set aside the dismissal of the cross-claim and adjourn the matters relating to the property transactions until the conclusion of the proceedings with respect to the cross-claim. On 4 April 1995 his Honour delivered a judgment explaining why he took that course, during which he stated:

At about 4.00pm on Friday, 31 March 1995 counsel for Mr Rogers, with support of Mrs Rogers' counsel, moved for a direction from me that the order of the proceedings should be changed by postponing the hearing of further evidence in relation to the property claims until there had been a determination of the set aside application and the strike out application. It was submitted that the cross-examination yet to be conducted would mean that the hearing of all of the proceedings presently before me could not be completed by 10 April, that the set aside application and the strike out application probably could be, and that a determination of those matters might obviate the need to determine the property claims at this stage and possibly at all. In the course of argument, counsel for Mr Rogers offered to submit to a continuance of an interim injunction restraining Mr Rogers from further dealings in relation to the property and counsel for Mrs Rogers offered to give an undertaking not to alienate her interest in the property pending a determination of the set aside application and the strike out application both in exchange for the usual undertaking as to damages.

Later in those reasons Sperling J stated:

There had been two developments since I made a direction as to the way the proceedings should be heard: first, the time occupied in cross-examination of Mr Rogers in relation to the property claims had been very much lengthier than had been anticipated and was not yet concluded; secondly, there were the offers in relation to injunction and undertaking proffered by Mr Rogers and Mrs Rogers.

98 On 10 September 1996 Sperling J delivered judgment setting aside the order of Loveday AJ dismissing the cross-claim.

99 On 7 March 1997 Sperling J disqualified himself from further hearing the property claim.

Orders of 4 September 2001

100 On 4 September 2001 orders were made by consent permitting release of Lot 72 from the injunction and undertaking in order that Mr and Mrs Rogers could sell it. The following orders were made:

1. Orders that:

(a) The Orders by way of injunction against the First Defendant first made by the Court on 17 October 1994 (in 19228 of 1982), varied on 12 September 1996 (in 19228 of 1982) and made to continue until further order on 9 October 1996 (in 19228 of 1982 and in 11094 of 1995) be vacated;
(b) The Undertaking given on behalf of the Second Defendant originally on 10 April 1995 (in 19228 of 1982), varied on 12 September 1996 (in 19228 of 1982) and continued on 9 October 1996 (in 19228 of 1982 and in 11094 of 1995) be vacated.


2. Orders that until further Order, the First Defendant, by himself, his servants or agents, be restrained from disposing of or encumbering his interest in the land comprised in Certificate of title Folio Identifier 71/615640.

3. Notes the Second Defendant's undertaking that she will not by herself, her servants or agents, dispose of or encumber her interest in the land comprised in Certificate of title Folio Identifier 71/615640.

4. Subject to the Order 5:


(a) Orders that until further Order, the First Defendant, by himself, his servants or agents, be restrained from disposing of or encumbering his interest in the land comprised in Certificate of title Folio Identifier 72/615640.

(b) Notes the Second Defendant's undertaking that she will not by herself, her servants or agents, dispose of or encumber her interest in the land comprised in Certificate of title Folio Identifier 72/615640.

5. The First and Second defendants may sell the land comprised in Certificate of title Folio Identifier 72/615640 for a gross sale price of not less than $105,000.00 and on the completion of any such sale the following amounts be deducted from the sale price:


(a) The costs, expenses and commission of the real estate agent or agents acting on the sale of the property; and

(b) The costs, fees and disbursements of the solicitor or solicitors acting for the parties on the sale of the property,

and the remainder to be paid into Court until further Order, including such order as may be made concerning the costs of the placing of the foregoing variations of injunctions and undertakings.

6. Notes that the Orders consented to today do not prejudice the asserted rights of the Plaintiff in these proceedings.

101 Also on 4 September 2001 orders were made in relation to proceedings 19228/82. They included the following:

1. The orders one to six inclusive made in matter CL11094 of 1995 by consent between Katherine Wentworth, Gordon Rogers and Toni Rogers on 4 September 2001 of an injunction against Gordon Rogers and an undertakings given by Toni Rogers in relation to Folio Identifiers 71/615640 and 72/615640 are orders in these proceedings.

102 Lot 72 was sold and the defendants paid the sum of $115,891.19 into Court where it remains.

Other relevant proceedings

103 Ms Wentworth has three judgments in her favour against Mr Rogers in respect of costs awarded to her in other proceedings. She has sought enforcement of two of those judgments by execution of writs for the levy of property of Mr Rogers, relevantly the money held in court and Te Mata. On 7 April 2003 Shaw J granted stays of the execution of the writs.

104 On 6 May 2003 Ms Wentworth made application to have the stays lifted. That application came before Miles AJ and was adjourned.

105 On 9 May 2003 I dismissed Ms Wentworth’s claim in respect of the property transactions. Mrs Rogers then sought an order dissolving the injunction and the undertaking. She also sought an order that the money in court should be paid out to her. Mr Rogers has made no submissions or sought any further order. Ms Wentworth sought an order that half the sum held together with interest be paid to her and that the other half of the sum be held pending an account being taken of the amount outstanding on the mortgage. The matters were stood over for argument.

106 On 16 June 2003 Miles AJ ordered that the application by Ms Wentworth to lift the stays imposed by Shaw J be dismissed save that the stay be enforceable until further order of the Court, see Wentworth v Rogers [2003] NSWSC 474. His Honour granted liberty to the parties to apply following the determination by me as to the disposal of the money paid into court. In the course of his judgment Miles AJ concluded that, on the material before him, there was a prima facie right for Ms Wentworth to proceed with the execution of two writs for the realisation of her entitlement to a total of $226,509.37 with interest from 11 April 2003. However, his Honour noted a number of matters that would have to be taken into account when determining whether the stay should continue in respect of execution against Te Mata, one being the money paid into court.

107 On 17 September 2003, two days before the remaining motions were to be heard before me, a Registrar of this Court on the application of Ms Wentworth made the following orders:

1. That the interest of Gordon Rogers comprising the property Te Mata, at Upper Moore Creek Road, Tamworth in the state of New South Wales, being Folio Identifier 71/615640 stand charged with an order pursuant to section 27 of the Judgment Creditors Remedies Act 1901.

2. That the plaintiff advise the defendants in matter number 11094 of 1995 of the stop order contemplated in relation to the funds held in Court in their names pursuant to the order made on 4 September 2001 in that matter.

The second order was purportedly made in accordance with the procedures provided by Part 47 of the Supreme Court Rules .

108 With unfeigned respect to the Registrar, I have doubts whether the first of those orders could have been made having regard to the terms of s 27 of the Judgment Creditors Remedies Act and the nature of the legal interest that Mr Rogers has in what remains of Te Mata. As to the other order, I share the concern expressed by the Registrar as to whether such an order is appropriate in a case where the person seeking the order is a party to the proceedings in which the money was paid into Court. But I am not sitting in review of these orders. It appears that the proceedings before the Registrar were commenced some time ago. Ms Wentworth in her affidavit filed on 16 September 2003 states that judgment had been reserved in the matter since April last.

Should the orders of 4 September continue?

109 Ms Wentworth has filed an affidavit in respect of what she says were the circumstances in which she agreed to the sale of Lot 72 and what she believed would occur as a result of the proceedings determined by me. Ms Wentworth states that she believed that the whole of the money obtained would be available to satisfy her judgments against Mr Rogers or at least half of that amount if she were unsuccessful in her claim to have the property transactions set aside. She also alleges that the defendants and the solicitor for Mrs Rogers led her to believe that Mr Rogers was “entitled beneficially to at least one half of those proceeds of sale”. She also asserts that she was misled as to his interest in the remaining Lot 71.

110 Ms Wentworth also seeks that the order and undertaking in respect of Lot 71 be maintained as a mareva injunction in aid of execution of the judgments in her favour. Further, she seeks to have the order and undertaking remain pending the hearing of an appeal that she has lodged against the judgment dismissing her claim.

111 Mrs Rogers claims that she is entitled to the whole of the money paid into Court. On her behalf it has been submitted that Ms Wentworth was not entitled to obtain the order and undertaking that she did. It is further argued that, had the order and undertaking not been in place, Mrs Rogers would have been entitled to the proceeds of the sale of Lot 72; as to one half, because she was half owner of the property and, as to the other half, in discharge of her mortgage over that lot.

112 Ms Wentworth maintains that the order and undertaking were put in place not simply to maintain the status quo pending the resolution of her claim to have the property transactions set aside, but to safeguard her right to seek to obtain her costs in relation to the hearing before Sully J and in the Court of Appeal. In effect her argument is that the order and undertaking were given to ensure that, once the 1994 transfer and mortgage were set aside, she would be able to satisfy her costs orders against Mr Rogers’s share of Te Mata. Therefore, so the argument runs, she is entitled to have the order and undertaking remain until she has been able to levy judgment against Te Mata.

113 I do not accept the argument. It seems clear from the history of the matter, that the Court of Appeal originally imposed the restraining order as an interim measure until Ms Wentworth could commence proceedings in the Common Law Division to seek a permanent restraint of Mr Rogers dealing with the property and to have the property transactions set aside. Thereafter, although Ms Wentworth continued to seek an order permanently restraining Mr Rogers from dealing with the property, only temporary orders were made pending the outcome of those proceedings. The injunctions were originally made in proceedings 19228/82 because those were the only proceedings on foot at that time and they were sought, as was the order for the setting aside of the property transactions, by notice of motion in those proceedings.

114 Further, it is clear that the proceedings in relation to Te Mata, including the permanent injunction being sought by Ms Wentworth, were separated from the extant proceedings relating to the cross-claim and became proceedings 11094/95 on the condition that Mr and Mrs Rogers agreed to temporary injunctions and undertakings in relation to further dealings with the property. As I understand the situation, once the new proceedings commenced there were no injunctions or undertakings extant in proceedings 19228/82.

115 The injunction and undertaking presently in place in proceedings 11094/95 were, in my view, granted or given on the basis of temporary relief pending the determination of the summons that was dismissed by me.

116 In any event, there are no proceedings before me other than the property matter. I am only concerned with making consequential orders arising from my judgment dismissing Ms Wentworth’s claims. In particular, proceedings No 19228/82 are not before me. Nor am I concerned with Ms Wentworth’s attempts to seek to obtain execution of the writs that have been stayed.

117 No submissions were made to me as to what, if any, would be the impact on the orders made on 4 September 2001 in 19228/82, if I declined to continue those orders in these proceedings.

What should happen to the money paid into court?

118 I do not believe that I have power to determine who should receive the money in court or whether Ms Wentworth should be entitled to gain access to it to satisfy her outstanding judgments. I believe I should simply direct that the money be returned to the person or persons who paid it into court, Mr and Mrs Rogers. There are no proceedings before me in which the present restraining order and undertaking can be identified as amounting to a mareva injunction in aid of execution of any order or to which the money in court now relates. If the orders made on 4 September 2001 still have any work to do, it is in proceedings 19228/82 in which the order for costs, which they are said by Ms Wentworth to be protecting, was made.

119 If I have an inherent jurisdiction to determine who should receive the money in court, I refuse to exercise it in these proceedings. There are other proceedings before the Court in which the issue can more appropriately be ventilated. Miles AJ was led to believe that I would be determining who was entitled to the money paid into court. However, I was of the view, perhaps erroneously, that, if Ms Wentworth lost her claim, the money would simply be returned to whosoever paid it into court.

120 One of the difficulties for my resolving any issues relating to who is entitled to the money in court is that there is now a dispute as to the basis upon which the orders were lifted over Lot 72. Ms Wentworth has filed an affidavit relating to her beliefs at the time she consented to the sale of Lot 72 and conversations that occurred with the legal representatives for the defendants at the time leading her to hold those beliefs. Apparently Mr Rogers also seeks to place evidence before the Court on that issue. However, I am not prepared to determine an issue involving the credibility of the parties in light of what has taken place before me where it is not necessary for me to do so. I have disqualified myself from hearing any other proceedings involving Ms Wentworth. I continued to hear the present proceedings, notwithstanding Ms Wentworth’s objections to be doing so, because I understood that no issue of credibility would arise.

121 Mrs Wentworth is well able to take what action she believes is necessary to enforce her rights, whether it be in proceedings 19228/82 or by new proceedings. My failure to make any determination in respect of her entitlement to the money in court will not disadvantage her.

122 Insofar as the undertaking given by Ms Rogers is concerned I have difficulty in understand how that can relate to proceedings 19228/82. She is not a party to those proceedings and they have nothing to do with her. I have concluded that the transfer and mortgage were not fraudulent and that Ms Rogers has always had a beneficial half interest in Te Mata. I do not presently see how or why she should be restrained in dealing with her property.

123 If, contrary to my view, the restraining order in respect of Mr Rogers dealing with the property is in place to aid the execution of Ms Wentworth’s judgments and if there is some legal basis upon which such an order could be continued in these proceedings, I would not continue it. Having determined the property matter in favour of Mr and Mrs Rogers, I see no basis upon which to continue to restrain them from further dealing with their property. I have determined they have not been acting to dissipate the assets in order to frustrate Ms Wentworth. There is no material before me that would indicate that they intend to do so in the future.

124 Ms Wentworth has lodged an appeal against my judgment in this matter. She asks me to continue the orders made on 4 September 2001 pending determination of the appeal otherwise the appeal would be rendered nugatory. I am prepared to continue the orders for one month from today. I understand from Ms Wentworth that the appeal will be before the Court at the end of this month. It seems to me, given the protracted nature of these proceedings, that it is preferable for me continue the orders on an interim basis only and allow the Court of Appeal to make such orders as it believes to be appropriate for the expeditious hearing of the appeal.

125 I have declined to order that this matter be remitted to a Master for the taking of an account in respect of the mortgage. If that is an appropriate course, it should be undertaken in some other proceedings.

126 In respect of the money in court I believe that the appropriate order to make in these proceedings is that it be returned to the defendants. It is clear on the evidence before me that at least half the money belongs to Mrs Rogers but I am unable to say what the position is as to the other half. That is a matter that seems to me, subject to any right Ms Wentworth may have to it as determined in other proceedings, to be a matter between Mr and Mrs Rogers.

ORDERS

127 I order:

1. The order for costs made on 9 May 2003 is revoked.

2. The plaintiff is to pay the defendants’ costs of the hearing before me on and from 29 January 2001 including the costs of this notice of motion.

3. The plaintiff is to pay the second defendant’s costs before Sperling J in proceedings 19228 of 1982 and 11094 of 1995.

4. I make no order as to costs in respect of any other proceedings arising from paragraphs 4 and 5 of the plaintiff’s notice of motion of 11 October 1994 or in proceedings 11094 of 1995.

5. That the orders made in these proceedings on 4 September 2001 restraining the first defendant are vacated.

6. That the second defendant is relieved from her undertakings given to the Court in these proceedings on 4 September 2001.

7. That the money paid into Court in these proceedings together with accrued interest be paid out forthwith to the first and second defendants.

8. That the above orders are stayed until 23 November 2003.
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Last Modified: 10/28/2003