Young, in the matter of Barrett v N M Superannuation Pty Ltd

[1992] FCA 1094

JUDGMENT No. .... L?.&../ .,&L

IN TH FEDE

1 A& )

SOUTH AUSTRAtIA DISTRICT REGISTRY )	1	No. 1079 of 1987
GENERAL DIVISION	)
1
BANKRUPTCY DISTRICT OF THE STATE	)
1
QF SOUTH AUSTRALIA	)

Re : JEFFREY CHARLES

BARRETT

Bankrupt

Ex Parte:	STEPHEN ELLIOTT
XmG

Applicant

- and - :	N M SUPERANNUATION
PTY LTD

Respondent

EX TEMPORE REASONS FOR DECISION

W: von Doussa J.

DATE : 10 June 1992

Since judgment was delivered on 6 March 1992 this matter has been back before the Court on several occasions when the terms of the minutes of order have been debated. The question of interest, and the quantum of interest, to be paid on the judgment in favour of the applicant has now been resolved between the parties. I need not be further concerned with that. I note that the interest runs from 15 February 1988, which, in my opinion, is the appropriate starting date. The question that has to be resolved now is the question the respondent to pay the applicantrs costs of the of costs. The applicant contends that the Court should order

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proceedings. The respondent, on the other hand, whilst not disputing that the applicant is entitled to an order for

says that those costs should be paid out of the fund, that is out of the amount of $187,566.79 awarded to the applicant under the judgment.

Counsel have referred to the general statements of principle in v01.48 of Halsburyfs Laws of England (4th Edition), paras.780 to 783 inclusive. As I understand counsel, they are agreed that costs are in the discretion of the court, and that the discretion should be exercised having

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regard to those general statements.

In my view the successful applicant is entitled to an order for costs against the respondent. The costs ought not be ordered out of the fund. The matter has a very long history which is demonstrated by the correspondence between the parties before the commencement of the proceedings. The correspondence started with the trustee, in my view correctly, identifying that there had been moneys paid pursuant to the

Simple Super policy to the bankrupt on 5 August 1987. At that	stage the trustee sought information to ascertain whether the
proceeds so paid were exempt pursuant to para.l16(2)(d) of the
Bankruptcy ~ c t 1966 (Cwth).

Then followed lengthy corre~ipondence where the respondent

raised other issues, and it was a long time before the real issue was again identified. By 18 October 1988 solicitors for

the bankrupt had come into the picture and had written to the solicitors for the trustee, indicating that the bankrupt asserted that the proceeds were not divisible property by virtue of para.l16(2)(d). At that point the respondent could have indicated that it would abide the decision of the Court in a contest between the trustee and the bankrupt, and the respondent would not thereafter have been required to be involved in the proceedings.

The respondent could have left it to the bankrupt to defend the position that he asserted. However, the respondent did not follow that course, but continued to argue on a number of grounds that the applicant was not entitled to the fund. In the course of doing so a number of statements were made by the respondent which, in my view, were both wrong in fact, and misleading. For example in a letter by Mr Leplastrier, dated 22 January 1990, he says:

"On 5 August, 1989, [which should read 5 August 19871 National Mutual as trustee exercised its discretion under the trust deed to roll the moneys over for the benefit of

Mr Barrett to the retirement fund where those moneys are again held on trust by the trustee for Mr Barrett as	beneficiary or such other persons as the trustee in its
absolute discretion may decide due to the operation of clause 16 under the Retirement Fund Deed."

The plain fact is that the money was not rolled over or Otherwise dealt with on 5 ~ugust 1987 in the manner which the l

letter asserts. It was invested on that date by the bankrupt in another policy (the Superguard PolicyJ, but as has become clear, that policy was cancelled on or about 8 September 1987

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held by the respondent. They were still being held by

respondent when the respondent was advised the

kruptcyr and the trustee commenc!ed the correspondence with

s respondent.

I am left with the firm impression that the respondent

exercised self-interest in its conduct of these
ngs by endeavouring to protect itself from its own
ty on the bankrupt's request that it reinvest the
another policy. That request should have been
by the respondent soon after it was made in

hose circumstances, it seems to me inappropriate to dllow the respondent to recover the costs ordered against it in favour of the applicant from the fund.

I think there is also some force in the other argument put on the applicant's behalf. The respondent has at all

times sought to rely on one or other of the defeasance clauses	in its product, and in particular on clause 16 of the National
Mutual Retirement Fund. The respondent has, it seems, been to argue that the defeasance clause operated in the event of the bankrupt's bankruptcy so as to protect his investment from the trustee in bankruptcy. A decision on that issue have been one of wide significance to the
respondent and it seems to me that the respondent was again

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to establish a point in its own interest that went beyond the immediate dispute between the parties.	l
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pay the applicant's costs of the proceedings.

Fdr these reasons I propose to order that the respondent l

I certify that this and the
4 preceding pages are a

true copy of the Reasons for Decision of Mr Justice von Doussa

-- Dated: @/OZ.

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Counsel for the,	applicant	: Mr N W Morcombe QC	I
Solicitor for the applicant	: Cowell Clarke	!	1
Counsel for the respondent	: Mr I C Robertson
Solicitor for the respondent	: Piper Alderman
Date of hearing	: 10 June 1992
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