Wentworth v Rogers

[2003] NSWSC 721

CITATION:	Wentworth v Rogers [2003] NSWSC 721
HEARING DATE(S):	16.6.03
JUDGMENT DATE:	8 August 2003
JURISDICTION:	Common Law Division Court of Appeal
JUDGMENT OF:	Miles AJ
DECISION:	Applicant to pay the costs of the trustees both of the review and of the hearing before the Registrar of the motions to set aside the garnishment notices, such costs to be taxed or assessed as between party and party.
CATCHWORDS:	Costs - garnishment proceedings - costs in discretion of court - practice of making no order for costs in favour of or against judgment debtor - costs - garnishment proceedings - application for payment of funds in deceased estate account attached by garnishment notice - application successfully opposed by trustees of estate - whether trustees should be awarded costs.
LEGISLATION CITED:	Supreme Court Rules Supreme Court Act
CASES CITED:	Weston v Indigo Shire Council HCA 20 March 2002 R v Justices of Haywood ex parte Fletcher (1896) 21 VLR 654 Hart v Muir (1899) 6WN (NSW) 62 Davidson v Seccombe (1892) 9 WN (NSW) 1
PARTIES :	Katherine Wentworth - Applicant Gordon John Rogers - Respondent
FILE NUMBER(S):	SC 19228/82; 008/86
COUNSEL:	Applicant in person
SOLICITORS:	Mr Phillip Beazley - Respondent Bray and Jackson - Trustees

LOWER COURTJURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	19228/82; 008/86
LOWER COURT JUDICIAL OFFICER :	Miles AJ

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MILES AJ

8 August 2003

19228/82
008/86

Katherine WENTWORTH v Gordon John ROGERS

JUDGMENT

1 HIS HONOUR: The applicant sought a review of a decision or decisions of the Registrar setting aside certain garnishment notices. The decision or decisions arose out of various notices of motion, first, the two notices of motion taken out by the applicant for payment of debts said to be due or accruing to the respondent, such debts having been attached by garnishment notices naming St George Bank as the garnishee and identifying the debt as moneys held in an account for a deceased estate, and, secondly two notices of motion taken out on behalf of Messrs Michael Bray and David Jackson, trustees of the estate (the trustees), who sought to be heard on the question concerning “the liability of the garnishee to pay the debt attached” under Part 46 r 10.

2 On 16 June 2003 I made an order dismissing the application.

3 I indicated that, unless the parties wished to be heard, I proposed to order that the applicant pay the costs of the respondent both of the review and of the application to the Registrar for payment of the debt attached, and also the costs of the trustees both of the review and of the hearing before the Registrar of the application by the trustees to set aside the garnishment notices.

4 There being a response from the parties that they wished or might wish to be heard on costs, I directed that those submissions on costs be in writing. The submissions have been received.

5 The respondent has not sought to be heard on the proposed order for costs.

6 The trustees have limited their submissions to asking that in the event that applicant seeking to relist the matter of costs for further argument, any additional costs occasioned by the relisting be on an indemnity basis. As the matter of costs has been dealt with, as directed, on written submissions, the question whether the trustee should recover any part of the costs does not arise.

7 The applicant resists the orders for costs against her.

8 Costs of the respondent.

9 In principle, a judgment debtor to whom is owing a debt by a third party has no interest in resisting an application by the judgment creditor that the judgment debt be satisfied in whole or in part by garnishment of funds in the hands of a third party. That principal has given rise to a practice that costs in garnishee proceedings will not be awarded against the judgment debtor, the judgment debtor not being a party to the proceedings.

10 This principal was considered by Hayne J in an unreported decision to which the applicant drew my attention, in the High Court on 20 March 2002 and available on the internet. His Honour said:

“The Indigo Shire Council, as judgment creditor, appeared seeking an order, amongst other things, for payment out to it, as judgment creditor, of the amount paid into court. Mr Weston, as judgment debtor, also appeared and sought to be heard in support of his contention that the money which had been paid into court should be retained in court, or at least retained under the control of the court pending applications, which he foreshadowed, designed to set aside the orders which Indigo Shire Council had obtained against him, both in proceedings in this Court and in other proceedings that Mr Weston had instituted in other courts, and which all arise out of the same factual circumstances.

11 It is at least open to doubt whether the judgment debtor has standing to appear in a proceeding of the kind with which I am now dealing, see, for example, R v Justices of Haywood; ex parte Fletcher (1896) 21 VLR 654. Rather, it may well be that the only parties to the present proceeding are the judgment creditor and the garnishees, and the garnishees having paid the sum claimed into court, it is only the judgment creditor who is entitled to be heard.

12 That, notwithstanding, I thought in all the circumstances of the case to allow Mr Weston to tell me the arguments that he had against payment out to the Shire of the sum standing in court.”

13 His Honour went on to make a payment out of court of the money then having been paid in. His Honour continued:

“Application was made on behalf of the Shire for an order that directly or indirectly Mr Weston, as judgment debtor, should pay the costs of the present day in court. As I said in the course argument, there appears to be authority in support of the general proposition that as a rule no costs will be allowed on proceedings of this kind for appearance in Court, or, at least, costs will not be ordered against the judgment debtor, the judgement debtor not being a party to the proceedings: See Hart v Muir (1899) 6WN (NSW) 62; Davidson v Seccombe (1892) 9 WN (NSW) 1.
In any event I would not be minded to order any costs over and above those that are allowed by the Rules and have been taken into account in computing the amount that has been paid into court.”

14 Rules of this Court that are relevant include Part 46 r 6 which restricts the liability of the garnishee to pay costs when the garnishee pays into court. Part 46 r 7 and r 8 empower the court on motion pursuant to the garnishment notice order the garnishee to pay a judgment creditor the judgment debt, together with such costs of the garnishee proceedings as may be payable to the judgment creditor out of the debt attached.

15 These provisions however do not cover the situation on the hearing of a notice of motion brought by the judgment creditor or someone other than the judgment debtor wishing to make a claim for entitlement to the debt attached. In that case the court may give judgment and make such order “as the nature of the case requires” Part 46 r 9 and 10.

16 Further the rules have to be read subject to the plenary operation of s 76 of The Supreme Court Act which gives the court “full power” and discretion to determine by whom and to what extent costs are to be paid.

17 The reasons published were intended to make it clear that the deceased estate account in the St George Bank never constituted a debt due and accruing to the respondent. Having been given notice that by operation of the garnishment notice funds in the deceased’s estate account had become subject to attachment as if they constituted a debt and further having been given notice that the funds were subject to an application for payment out or payment to the applicant, it became the duty of the trustees to protect the fund by taking the action they in fact took. Far from providing some reason for not taking steps to protect the fund, the misdescription of the trustees in the notice given to them as “garnishees” provided, if they needed it, further reason to challenge the claim of the applicant.

18 It may be that for the more orderly conduct of the proceedings, the trustees should have applied to become respondents to the applicant’s notices of motion. However nothing in Part 46 or elsewhere in the rules makes that formal step necessary. The applicant is in no position to complain about procedural irregularity. The trustees are not to be treated as intervenors and authorities on the costs of intervenors are not to the point.

19 As far as the costs of the respondent are concerned however in the light of the authorities the better course appears to be not to allow the respondent his costs, unless it can be shown that the garnishment proceedings required him to act in some way so as to reasonably protect his interest in the deceased estate. On the material before me, it appears that the estate as a whole, including the respondent’s interest in it, was adequately protected by the steps taken by the trustees and that the respondent was aware at all relevant times of what the trustees were doing in that regard. Accordingly there will be no order that the applicant pay the respondent’s costs either in the garnishment proceedings or in the review proceedings.

20 The St George Bank indicated that it would abide by any order that the court made and did not seek an order for costs.

21 Accordingly the only order to be made at this stage is that the applicant pay the costs of the trustees both of the review and of the hearing before the Registrar of the motions to set aside the garnishment notices, such costs to be taxed or assessed as between party and party.

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Last Modified: 09/19/2003