Australian Military Bank Ltd v Pike

Representation: Counsel:
Mr A Crossland (First Defendant)
Mr S Ower KC / Mr A Oakes (Second Defendant)
Solicitors:
No Appearance (Plaintiff)
Digital Age Lawyers (First Defendant)
W Advisers (Second Defendant)

File Number(s): 2024/00109487

Publication restriction: Nil

EX-TEMPORE Judgment

1. HIS HONOUR: These proceedings relate to moneys that were held in an account or accounts with Australian Military Bank Limited. The claimants over that monies are Kevin Pike and Nathan Pike who are father and son respectively. Without any disrespect I will call these parties Kevin and Nathan in this judgment.

2. The Australian Military Bank Limited brought proceedings by way of interpleader and ultimately the Court granted relief by way of interpleader and ordered that the money held in the relevant account or accounts be paid into court. Subsequently, Kevin and Nathan each filed cross-claims claiming, amongst other things, entitlement to be paid out the money held by the Court.

3. When the matter came on this morning, I raised with counsel for the parties whether there was any issue concerning the Court's jurisdiction to hear the matter. I raised this because, at a minimum, Nathan pleads at paragraph 21, 27(c), 28 (which pleads the existence of an express trust), 33 and 41, reliance on Kevin having held the funds in the account on trust for him. That is an alternate claim, but it nevertheless is a claim that is advanced.

4. Strictly, the asset in dispute was a chose in action against the bank, however the question remained as to who owned the asset. Each party's cross-claims seek relief by way of declaration that that party is the legal and beneficial owner of the sum in issue. It seemed to me that an issue arose as to whether the proceedings were proceedings for an execution of a trust or for a declaration of the subsistence of a trust, to which s 134(1)(e) of the District Court Act 1973 (NSW) applied.

5. I stood the matter down for King’s counsel and junior counsel for Nathan and counsel for Kevin to further consider the matter. Ultimately, Mr Ower KC for Nathan submitted that the Court should have no doubt as to its jurisdiction, whilst counsel for Kevin submitted that at the least the Court should have a doubt about its jurisdiction. The reference to doubt arises because of the terms of s 144 of the Civil Procedure Act 2005 (NSW) which provides that:

"(2) If, during proceedings to which this section applies, the District Court decides that it lacks, or may lack, jurisdiction to hear and dispose of the proceedings, the District Court must order that the proceedings be transferred to the Supreme Court."

In Mahommed v Unicomb [2017] NSWCA 65, the Court of Appeal held that the words "may lack" are to be understood as the having of a doubt.

6. Mr Ower KC for Nathan relied on the following: Firstly, the fact that the money had been paid into court meant that the Court had power over the money, including the way in which it is to be distributed, and that empowered the Court to deal with the legal and equitable issues required to be determined in order to make orders paying out the money held by the Court. He relied on paragraph 82 and following in the decision of Reozone Pty Ltd v Santoro [2018] NSWSC 650 and r 43.11 of the UCPR and s 9 of the District Court Act 1973*.* Secondly, he submitted that Nathan's claim was really a claim falling in the broad jurisdiction granted under s 134(1)(h) of the Act, and not caught by the proviso in parenthesis; that is the claim was not otherwise of a kind to which s 134(1)(e) applies, and if required Nathan would not press relief by way of declaratory relief to buttress that position. I proceed in this judgment on the basis that declaratory relief seeking a declaration of a trust is not being sought in these proceedings.

7. Mr Ower KC referred me to Leeming JA's decision in Great Northern Developments Pty Ltd v Lane in which his Honour deals with s 134 of the District Court Act 1973 in paragraphs 83 to 92 in particular.

8. Counsel for Kevin submitted that the Court does not have jurisdiction by reason of Nathan's alternate claim, or at least there is doubt about that jurisdiction. He submitted that the fact that money had been paid into court does not alter the underpinning causes of action, and the matter remains as one involving the assertion and prosecution of a claim that a trust exists. He further submitted that s 134(1)(h) of the District Court Act 1973, by its reference to liquidated or unliquidated claims should be understood to refer to claims involving debt or damages. He relied on Commonwealth Bank of Australia v Hadfield [2001] NSWSC 440 at paragraph 59.

9. In reply, Mr Ower KC referred the Court to other parts of Hadfield, and also to the decision of the New South Wales Court of Appeal in Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266.

10. In my view, the fact that money has been paid into court pursuant to relief by way of interpleader does not import a jurisdiction to the Court that it did not otherwise have. I do not discern anything in r 43.11 of the UCPR that does so, nor in the decision in Reozone. Indeed, in Reozone the Court noted that the Court's role is to determine conflicting claims, and the money be dealt with in accordance with the orders of the Court. With respect to r 43.11, in my view clear language is required before it can be concluded that its effect is, in substance, to expand the jurisdiction otherwise granted to the Court by the legislature, notwithstanding s 9 of the District Court Act 1973.

11. In Great Northern, Leeming JA noted that for the parenthetical words of s 134(1)(h) of the District Court Act 1973 to perform their function, close attention must be given to their meaning. That requires both a consideration of the other subparagraphs of s 134(1), and the nature of the remedies sought, and the nature of the claims made. As his Honour observes, certain of the subparagraphs are defined by the remedy sought, and others by the subject matter. His Honour observed that s 134(1)(e), presently relevant, is defined by a combination of remedy and subject matter. Although he did not elaborate, I take His Honour to mean that the subparagraph is defined by a remedy when it refers to a declaration of trust, and by subject matter when it refers to the execution of a trust. At paragraph 93, his Honour observes that the subject matter is likely to be identified in the pleadings.

12. In my view, Nathan has an alternative claim which calls for determination of the subsistence of a trust. However, he no longer seeks a declaration of the subsistence of a trust. Accordingly, the remedy portion of s 134(1)(e) of the District Court Act 1973 is not satisfied. The next issue is whether the subject matter referred to in s 134(1)(e) is enlivened. That is, are there proceedings for the execution of a trust? McColl JA, with whose reasons Macfarlan JA agreed, said of the character of moneys paid into Court, the following at paragraph 80:

"A party who pays money into court does not retain any legal or beneficial interest in the money. Rather, funds held by the Court are not held as trustee for any particular party. It is an exercise of the judicial function of the State. The money is vested in the registrar of the Court and is to be dispersed in accordance with the decision of the Court. Such rights as claimants to those funds may have are due administration of the funds in the Court, and a right to be heard about disposition of the funds rather than a right of property. The parties cannot create by their success in the litigation a property right to the funds. The management of the funds remain within the power of the Court, subject to any pre-existing rights."

13. The reference to pre-existing rights is a reference to both the decision of Lindsay J in Re ANZ Banking Group Limited Funds in Court [2014] NSWSC 1076, and to the High Court's decision in Harmer v Federal Commissioner of Taxation (1991) 173 CLR 264 at 272 to 274 where the High Court made it clear that pre-existing trust interests remain, notwithstanding monies are paid into court.

14. In my view, although Nathan's claim involves a determination as to whether Kevin held monies on trust, the proceedings before the Court are not proceedings for the execution of that trust, but rather proceedings for the Court to find that the trust existed, and for an order that the Court in the due administration of the monies in court, pay out that sum to Nathan. Accordingly, in my view, s 134(1)(e) is not engaged. Mr Crossland indicated that there may be a challenge to her Honour McColl JA's reasoning. However, those reasons seem to me to be part of the ratio of the decision in Cellarit, and were the subject of agreement by Macfarlan JA, and I am bound by those reasons.

15. I do not accept that s 134(1)(h) of the District Court Act 1973 is limited in the way submitted by Mr Crossland. In Hadfield her Honour Beazley JA observed, after referring to the Second Reading Speech, that she did not consider that the reference to the Second Reading Speech was helpful, for the simple reason that the words used by the minister in that speech when the minister referred to debt and damages, are different from the words of the provision.

16. Later, in paragraph 65 her Honour, having regard to the precise words in the legislation, noted that there was nothing in the express words of the provision, or within the context of the provisions conferring equitable jurisdiction on the Court to exclude the claim that was present before the Court in that case, nor was there any reason to limit the words "equitable claim or demand for recovery of money" to a claim "involving money in the form of debt" as was said in the Second Reading Speech.

17. Further, I consider reliance on McDonough v The Owners Strata Plan [2014] NSWSC 1708 is misplaced. In that case, proceedings were brought for equitable compensation for breaches of trust. Brereton J took the view that those proceedings amounted to a claim concerning the execution of a trust and fell within s 134(1)(e) of the District Court Act 1973; that is it was a claim alleging breaches of trust. I note the Court of Appeal gave leave to appeal in Huang v Drumm [2017] NSWCA 29 on a similar question, but I have not been able to locate any ultimate judgment on appeal. Nevertheless, the case before me does not raise the same issues. It is essentially a case involving determination of ownership, rather than a claim concerning the execution of a trust.

18. Accordingly, for these reasons, I am satisfied that the Court does have jurisdiction to hear these proceedings, and I am satisfied that s 144 of the Civil Procedure Act 2005 is not engaged.

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Amendments

10 November 2025

Coversheet - corrected representation.