Wise and Young Pty Ltd v Culley - [2020] NSWSC 1139

Supreme Court

New South Wales

Medium Neutral Citation: Wise & Young Pty Ltd v Culley [2020] NSWSC 1139
Hearing dates: 21 August 2020
Date of orders: 24 August 2020
Decision date: 24 August 2020
Jurisdiction: Equity
Before: Parker J
Decision:
See [28]

Catchwords:
EQUITY – trusts and trustees – loan to pay security for costs order – whether giving rise to Quistclose trust
CIVIL PROCEDURE – monies in court – order for security for costs with self-executing order for dismissal – plaintiff pays money into court after deadline – proceedings dismissed and defendant obtains judgment for costs – exercise of the court’s discretion to pay money to defendant

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW), r 41.3

Cases Cited:
Barclays Bank Limited v Quistclose Investments Ltd [1970] AC 567
JKB Holdings Pty Ltd v de la Vega [2013] NSWSC 501
Raulfs v Fishy Bite Pty Ltd [2012] NSWCA 135
Twinsectra Ltd v Yardley [2002] 2 AC 164

Category: Procedural and other rulings
Parties: Wise & Young Pty Ltd (Plaintiff)
Darren William Culley (Defendant)
Defined Property Pty Ltd (interested party)
Representation:
Advocates:
M Castle (counsel) (Plaintiff)
J Cook (counsel) (Defendant)
G Adelstein (solicitor) (interested party)
Solicitors:
Adelstein Solicitors (Plaintiff)
Fortis Law Group (Defendant)

File Number(s): 2018/117056
Publication restriction: Nil

Judgment – EX TEMPORE

Revised from transcript; issued 26 August 2020

The substantive claims in these proceedings have been dealt with. This judgment concerns a dispute about who should receive payment of $70,000 which has been paid into court in the proceedings.
The parties to the dispute are:

Wise & Young Pty Limited ("WY"), the unsuccessful plaintiff, which paid the moneys into court;
Darren William Culley, the successful defendant, who seeks to have the moneys applied in partial satisfaction of his costs of the proceedings; and
Defined Properties Investments Pty Limited (“Defined”), apparently an associated company of WY, which provided the monies.
1. The issue came before the Court on an application by Mr Culley, made by notice of motion filed 14 July 2020, for an order that the moneys be paid out to him. No formal application has been made by WY or Defined (which was separately represented at the hearing because of a conflict between its interests and those of WY). But all parties agreed that the Court should determine any issues of substantive entitlement to the monies and make orders accordingly, despite the lack of pleadings and the apparently interlocutory nature of the proceedings.
2. The events which have led to the dispute began with orders made by Registrar Walton on 12 April last year. The Registrar ordered that WY provide security for Mr Culley's costs of the proceedings in the amount of $70,000. On 9 July that order had not been complied with. The Registrar ordered that the deadline for compliance be extended to 4pm on 16 July 2019, but if the security was not paid by that time, the proceedings were to be dismissed.
3. The moneys were not in fact paid by 4pm on 16 July. At 4:38pm…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] NSWSC 1139
Decision Date: 24 August 2020

CaseChat Overview and Summary

The case of Wise and Young Pty Ltd v Culley involved a dispute between a plaintiff, Wise and Young Pty Ltd, and a defendant, Culley. The plaintiff sought to have a loan of $100,000 paid into the court by Culley pursuant to a security for costs order. The loan had been intended to be used to secure the plaintiff's costs of proceeding with the action. The central legal issue was whether the loan constituted a Quistclose trust, which would prevent it from being subject to the security for costs order. The court was required to determine the nature of the loan and whether it was subject to the order for security for costs.

The court found that the loan did not constitute a Quistclose trust, as the terms of the loan did not indicate that the funds were to be used for a specific purpose and there was no evidence of an intention to create a trust. As a result, the loan was subject to the security for costs order. The court also considered the plaintiff's failure to pay the money into court by the deadline set out in the order, which resulted in the proceedings being dismissed and the defendant obtaining judgment for costs. The court held that it had the discretion to order that the money paid into court by the plaintiff be paid to the defendant, as it was just and equitable to do so in the circumstances of the case.

The final orders of the court were that the loan did not constitute a Quistclose trust and was subject to the security for costs order. The proceedings were dismissed and the defendant was awarded judgment for costs. The court also ordered that the money paid into court by the plaintiff be paid to the defendant, as it was just and equitable to do so in the circumstances of the case. The court's decision highlights the importance of following court orders and the potential consequences of failing to do so. It also reinforces the principle that loans intended to secure costs of litigation are subject to security for costs orders, unless they are subject to a Quistclose trust.

Orders