Guiseppe Santamaria v Paul Desmond Sweeney Paul Desmond Sweeney as Trustee of the Bankrupt Estate of Natasha Grace and Luke Conrad v Guiseppe Santamaria

Judgment - EX TEMPORE 1There are two sets of proceedings before the Court. On 22 February 2012 Nicholas J ordered that, subject to further order, the two sets of proceedings "proceed together". I do not take that order as intended to have the effect that, without further order, the two proceedings, or motions filed in them, will necessarily be heard together. However, in "proceeding together" there may be a practical presumption that they will ultimately be heard together. 2Both sets of proceedings concern the disposition of moneys paid into Court on 22 March 2012 consequent upon an order made by Nicholas J on 22 February 2012 and completion of a sale of property known as xxxxx xxxxx xxxx, Double Bay, in New South Wales. That property was formerly owned by Natasha Grace and Luke Conrad. They became bankrupt on 27 May 2011. Their trustees in bankruptcy are Paul Desmond Sweeney and Jason Shane Cronan ("the trustees"). 3Each of the proceedings before the Court arises from the underlying fact that, at or about the time of sale of the property, there were four caveats on the title to the property or, at least, entered on one of the two title deeds (folio identifier 26/SP2795 and folio identifier 51/SP2795) referable to the property. 4Not all four "caveators" have appeared before the Court today. Although there may be room for debate about what was listed for hearing today, there is, at least, a distinct possibility that caveators who did not appear today refrained from doing so because of an understanding that the only substantive business to be transacted today is a motion filed for the trustees in the second of the two proceedings. 5Accordingly, I proceed on the basis that the first of the two sets of proceedings (namely those numbered 2011/00282226 and styled Santamaria v Sweeney) is presently before the Court for directions only. 6The plaintiff in those proceedings has, it seems, made divergent statements about whether he persists in his claim to a security interest in the moneys paid into Court. The fact that he has waxed and waned in his enthusiasm for the proceedings may, in due course, need to be taken into account in the making of costs orders. However, for the moment at least, all that is significant is that the first set of proceedings should be adjourned for directions at an appropriate time. 7The second set of proceedings (namely those numbered 2012/00057857 and styled Sweeney v Santamaria) is the primary vehicle for the business transacted by the Court today. That business has been the hearing and determination of a notice of motion filed by the plaintiff/trustees on 4 July 2012. 8The motion was actively contested at the outset of today by the second and third defendants. The first defendant, Mr Santamaria, was pre-disposed to acquiesce in the orders sought by the trustees, subject only to a consideration of whether the trustees' claim for costs should be the subject of an order for assessment rather than an order for payment out of the moneys in a specific sum. 9During the course of argument the differences between the parties largely melted away; not entirely, but largely. The trustees demonstrated a preparedness to re-cast the orders sought and, upon consideration of what transpired during the course of argument, each of the first defendant (Mr Santamaria) and the second and third defendants (Mr and Mrs Rasyid) became less adamant in their opposition to what was sought by the trustees. 10Provided that the trustees' claims for payment out of specific amounts of money from the fund are limited in the terms of the orders I propose to make, I am satisfied that the trustees have an entitlement to be paid moneys out of the fund upon an application of the principles relating to equitable liens often expounded by reference to the judgment of Dixon J in In Re Universal Distributing Company Ltd (In Liquidation) (1933) 48 CLR 171 at 174. 11In the light of the course of the hearing it is, I believe, unnecessary, to do no more than to note that principle and some of its more recent applications. In that regard I refer to the judgment of the New South Wales Court of Appeal in Dean-Willcocks v Nothintoohard Pty Ltd (In Liquidation) [2006] NSWCA 311 at paragraphs 9-11 66-76 92 and 100, and the judgment of the Full Court of the Federal Court of Australia in Shirlaw v Taylor (1991) 31 FCR 222 at paragraph 23 and following. 12The trustees, by their motion, seek to have paid out of the funds in Court an amount of $39,372.31 referable to the costs of these proceedings up to and including 22 March 2012 (the date upon which moneys were paid into Court) and the sum of $292.50 referable to their remuneration, in each case on the basis that the costs and expenses incurred related to work that was necessary to be done in order to ensure that the property the subject of proceedings could be realised for the benefit of all creditors, or parties who claim to be creditors of the bankrupts. 13The two sums claimed on the principle enunciated by Dixon J amount to a total of $39,664.81. That amount does not represent the whole of the claimed entitlements of the trustees. They have additional claims referable to the conduct of one or other of the two sets of proceedings before the Court, including their notice of motion. 14Having regard to the general entitlement of parties in the position of the trustees to be paid their costs out of funds such as those presently in Court and, to the amount of moneys involved, in my assessment the interests of all parties interested or potentially interested in the funds in Court would be best served by orders that permit the trustees to have their costs of their motion, as assessed or as agreed by all parties maintaining a claim on the fund, paid out of the funds in Court. 15I refer here to the direction given to the Court in s 60 of the Civil Procedure Act 2005 to bear in mind the importance of proportionality in the conduct of proceedings, as well as the general power to award costs contained in s 98 of the Act and the provisions specifically relating to funds in Court found in rule 42.22 and rule 42.25 of the Uniform Civil Procedure Rules 2005. 16I hesitate to say that the parties who have participated in today's hearing have consented to the orders I propose to make; but they have come pretty close to doing so and, in any event, in my opinion, the appropriate course is to make the notations and orders I now proceed formally to make. 17In the proceedings numbered 2012/00057857 and on the notice of motion filed by the trustees on 4 July 2012 I make the following notations and orders: (1)Note that on 22 March 2012 the sum of $211,682.09 was paid into Court consequent upon: (a) an order made by the Court on 22 February 2012; and (b) completion of the sale of the property known as xxxxx xxxxx xxxxx, Double Bay, in the State of New South Wales. (2)Order that there be paid out of the funds in Court to or at the direction of the plaintiffs (the trustees) an amount of $39,664.81 representing the sum of: (a) $39,372.31 referable to legal fees up to and including 22 March 2012 as recorded in annexure J to the affidavit of J S Cronan sworn 12 July 2012; and (b) $292.50 referable to remuneration of the plaintiffs, as trustees in bankruptcy, up to and including 22 March 2012 as recorded in annexure "I" to that affidavit. (3)Order that the plaintiffs' costs of and incidental to their notice of motion filed 4 July 2012 be paid out of the funds in Court in an amount assessed or as may be agreed between the claimants of the fund identified in paragraph 4 as "caveators", such costs to be assessed on the indemnity basis but to be limited (subject to any further order of the Court) to an amount not exceeding $14,500. (4)Subject to any further orders of the Court, reserve for consideration in these proceedings, and in the proceedings numbered 2011/00282226, such (if any) competing claims as may be made on the balance of the funds in Court by the parties who had, at or about the time of the sale of the property known as xxxxx xxxxx xxxx, Double Bay, lodged a caveat against the title to the property; namely: (a) the second and third defendants (Mr and Mrs Rasyid), the caveators named in caveat number AF782893; (b) the first defendant (Mr Santamaria), the caveator named in caveat number AF784524; (c) Mr Salvatore Russo, the caveator named in caveat number AG158091; (d) Crest Capital Investment (Aust) Pty Limited, the caveator named in caveat number AS309021. (5)Direct that the proceedings (including the notice of motion of the second and third defendants filed on 9 July 2012) be listed for directions before the registrar at 9 am on Tuesday 9 October 2012. (6)Direct that, subject to any further order of the Court, the second and third defendants (as applicants on their notice of motion filed 9 July 2012) have carriage of the ongoing proceedings and, accordingly, give notice of these orders and their notice of motion to each of the interested parties identified as caveators in paragraph 4, such notice to be given within a reasonable time before 9 October 2012. (7)Reserve liberty to apply on three days' notice. (8)Note that, subject to any further orders of the Court, the proceedings numbered 2011/00282226 are (in conformity with the order made by Nicholas J on 22 February 2012) to be listed for directions on 9 October 2012 together with these proceedings numbered 2012/00057857. (9)Note that the present intention of the trustees, as communicated to the Court today (19 September 2012) is to take no further active part in either these proceedings, or the 2011 proceedings, and, accordingly, they have requested that they be excused from any further appearance in the proceedings should they be advised to take that course.