Wentworth v Wentworth

[1999] NSWCA 142

CITATION:	Wentworth v Wentworth [1999] NSWCA 142
FILE NUMBER(S):	CA 40031/97; 40392/97
HEARING DATE(S):	12 May 1999
JUDGMENT DATE:	25 May 1999
PARTIES :	Katherine Wentworth v Peter Fitzwilliam Neville Wentworth (as Executor Estate Late G N Wentworth) Katherine Wentworth v Peter Fitzwilliam Neville Wentworth & Anor
JUDGMENT OF:	Stein JA at 1; Fitzgerald JA at 1; Brownie AJA at 1

LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S) :	EQ 3748/89
LOWER COURT JUDICIAL OFFICER:	Simos J, Hodgson J

COUNSEL:	In person (Appellant) No appearance (Respondent)
SOLICITORS:	n/a
CATCHWORDS:	Construction of SCR Part 43 Rule 1 (examination orders) - application to orders for costs which have not been quantified - exercise of discretion
ACTS CITED:	Supreme Court Rules Part 43 Rule 1
CASES CITED:	Wilkie v Wilkie (1905) VLR 80 Wilkie v Wilkie (No 2) (1905) VLR 104 Tubby Trout Pty Ltd v Sailby Pty Ltd (No 2) (1996) 63 FCR 530 Brown v Stafford [1944] 1 KB 193
DECISION:	Leave to appeal granted from the decision of Simos J on 20 December 1996. Leave to appeal otherwise dismissed. Appeal allowed and the order made by Simos J on 20 December 1996 setting aside the examination order made by the Registrar on 6 June 1995 be set aside. Leave to appeal granted and appeal allowed from the decision of Hodgson J of 12 June 1997 in so far as his Honour refused an application for an examination order. Leave to appeal otherwise dismissed.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40031/97; CA 40392/97
EQ 3748/89

STEIN JA
FITZGERALD JA
BROWNIE AJA

Tuesday, 25 May 1999

Katherine WENTWORTH v Peter Fitzwilliam Neville WENTWORTH (as Executor Estate Late G N WENTWORTH)

Katherine WENTWORTH v Peter Fitzwilliam Neville WENTWORTH & Anor

JUDGMENT

1 THE COURT: It may be noted that this application was heard ex parte, the respondent having written to the Registrar by letter dated 3 May 1999 indicating that he would not be attending the hearing. 2 On 5 August 1998 the court, constituted by Handley and Stein JJA, refused Miss Wentworth leave to appeal against decisions of Simos J (20 December 1996), McLelland CJ in Eq (24 December 1996) and Hodgson J (12 June 1997). Miss Wentworth immediately applied, by Notice of Motion, to set aside the orders made. On 30 November 1998 the court, constituted as above, declined to re-open the leave application in respect of a Mareva injunction application (before McLelland J) and the costs order made by Simos J in respect of Miss Wentworth’s motion to set aside the judge’s ex parte order of 28 June 1995 staying her writ of execution. However, the court was persuaded that it should re-open the decision to permit reconsideration of the issues relating to an examination order under SCR Pt 43 Rule 1. 3 Handley JA, who delivered the reasons of the court, said that the court had acted on the view that the rule had no application to an order for costs prior to costs being taxed or assessed and that Simos and Hodgson JJ had acted on the same view. Hodgson J had referred to Wilkie v Wilkie (1905) VLR 80 as authority for the proposition. The court had also referred to the case in its judgment of 5 August 1998. Handley JA noted the claimant’s submission that Wilkie v Wilkie (No 2) (1905) VLR 104 applied. She was correct. Wilkie (No 1) relates to a charging order. Its ratio is that a charging order cannot be given except for an ascertained sum and not for costs until they have been taxed. It was not a case about an examination order. 4    By contrast Wilkie (No 2) was about an examination order. An objection to its issue was made on the basis that Mr Wilkie was not a debtor since the costs, the basis of the debt, had not been taxed. Hood J rejected the submission. Costs, even if untaxed, were a debt and the debtor was liable to be examined. Handley JA noted that Wilkie (No 2) had been followed in Tubby Trout Pty Ltd v Sailby Pty Ltd (No 2) (1996) 63 FCR 530 at 533. In the earlier judgment (5 August 1998) the court had also noted the decision of English Court of Appeal in Brown v Stafford [1944] 1 KB 193 at 198 to the effect that an examination order of a debtor is made practically as of course unless there are ‘very special circumstances’. Accordingly, the court gave leave to re-open the decision to refuse leave to appeal on 5 August 1998 - ‘in relation to the construction of SCR Pt 43 Rule 1 and its application to orders for costs which have not been quantified by assessment or taxation and associated questions relating to the discretion under the rule’. 5 On the issue of whether the examination order was issued without jurisdiction Simos J said (at p 21):

In my opinion, although the matter is not free from doubt, the better view is that the submission on behalf of the defendant is correct for present purposes. It is difficult to see how execution could be levied in respect of an unquantified amount, and it is only ‘a person entitled to enforce a judgment or order’ who can make application for an examination order.

6    The claimant also applied to Hodgson J for an examination order. In giving judgment on 12 June 1997, refusing the application, his Honour said:

The plaintiff submitted that Simos, J. had applied the wrong principles, because His Honour had equated the issue of an examination order with actual execution or enforcement of a judgment: this was shown to be wrong by cases such as Zwicker v. Kronheimer (1898) 24 VLR 424; Wilkie v. Wilkie (1905) VLR 80; Brown v. Stafford (1944) 1 KB 193; Pollack v. Commissioner of Taxation (1991) 32 FCR 40.
…
In my opinion, the cases referred to by the plaintiff, and in particular Brown v. Stafford show that the existence of a stay of execution does not mean that a person is not ‘entitled to enforce a judgment’ within rules authorising the issue of an examination order; and also that a judgment creditor is entitled to an examination order virtually as of right, in the absence of special circumstances. Simos, J. did not refer to this line of authority; and had I been persuaded that there had been a material change of circumstances, I would have found it necessary to consider explicitly the question of whether there were, in this case, special circumstances such that the examination order should not be made.
In fact, had I needed to consider this matter, I would have decided that there are such special circumstances in this case.

7    There is no doubt that Simos and Hodgson JJ were in error in not applying Wilkie (No 2) and this was repeated in the judgment of the court of 5 August 1998. The fact that the claimant had unassessed or untaxed orders for costs in her favour did not mean that she was not entitled to have the debtor examined unless there were very special circumstances. 8    There is undoubtedly a discretion residing in the court when asked to issue an examination order. In setting aside the examination order issued by the Registrar, Simos J relied on three instances of non-disclosure of material facts by the applicant. These were:

(a) that Mr Russo, the claimant’s solicitor, had put a version of a conversation with the defendant’s solicitor (Miss Norton) to the Registrar to the effect that the defendant was insolvent and dissipating his assets. It was said that this was material likely to influence the Registrar in deciding whether to issue the examination order. However, Miss Norton had sworn an affidavit disputing Mr Russo’s version of the conversation and that dispute was not disclosed to the Registrar.

(b) In not informing the Registrar that in relation to a costs certification dated 16 August 1994 of $57,251.24 the Master had specifically reserved the matter for further consideration. The Court of Appeal found in its judgment of 5 August 1998 that this ground of non-disclosure had no substance.

(c) In not disclosing to the Registrar that in giving a decision on 12 December 1994, Young J had found that there had been an implied agreement between the parties that the claimant would not seek satisfaction of costs orders in her favour until all taxations were completed. Although this finding was later set aside by the Court of Appeal on 21 February 1996, it still stood when the Registrar issued the examination order on 6 June 1995.

9    Because the court held that Simos J had erred in (b) above, it indicated that it was necessary to re-exercise the discretion. 10    Having considered the respective affidavits of Russo and Norton, we are unable to see that there is any material dispute between them so as to require disclosure of the Norton version to the Registrar. However, to the extent that there may have been a failure to disclose the disputed conversation, it was insignificant and certainly not material enough to constitute a very special circumstance why the examination order should not be made. In any event, since the claimant was entitled to the examination order almost as of right, giving the Registrar an additional reason for making it may be seen as irrelevant. 11    As to the non-disclosure of portion of Young J’s judgment referred to above, the claimant notes that this was set aside by the Court of Appeal on 21 February 1996. On a re-exercise of the discretion, as is necessary because of the failure of the trial judge to apply Wilkie (No 2), this point falls away into insignificance. 12    On a re-exercise of the discretion we are satisfied that the examination order should not have been set aside by Simos J. There is simply no longer a case to discharge the examination order of 6 June 1995. Leave to appeal the judgment of Simos J of 20 December 1996 should be granted and leave should be granted to appeal the decision of Hodgson J of 12 June 1997 since he also failed to apply Wilkie (No 2). The appeals should be allowed. However, in relation to the appeal from Hodgson J, there is now no point in any further order relating to the issue of an examination order. 13    The following orders should be made in substitution of the orders of the court made 5 August 1998:

40031 of 1997

1. Leave to appeal granted from the decision of Simos J of 20 December 1996.

2. Leave to appeal otherwise dismissed.

3. Appeal allowed and the order made by Simos J on 20 December 1996 setting aside the examination order made by the Registrar on 6 June 1995 be set aside.

4. The several orders of Simos J that the claimant pay the respondent’s costs relating to the motions concerning the examination order be set aside and, in lieu thereof, order the respondent to pay the claimant’s costs of the motions before his Honour.

5. The respondent is to pay the claimant’s costs, if any, of the appeal and leave application.

6. Interlocutory orders of 23 June 1997 discharged.

7. Exhibits be returned.

40392 of 1997

1. Leave to appeal granted and appeal allowed from the decision of Hodgson J of 12 June 1997 in so far as his Honour refused an application for an examination order.

2. Leave to appeal otherwise dismissed.

3. The respondent is to pay the claimant’s costs, if any, of the appeal and leave application.

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