James & Ors v James

The Hearing on 23 February 2018

1. Before argument commenced on 23 February a number of significant procedural events took place. The legal representative of the first and second plaintiffs, Mr R. Gilbert, was given leave to withdraw. Those two plaintiffs, Ms James' brothers, Geoffrey and Peter, appeared thereafter on 23 February 2018 in person. The other brother, the third plaintiff, Steven, continued to retain Ms M. Reid of Elliot Tuthill to represent him.
2. Ms James is now bankrupt. After the appointment of the trustees for sale, on 25 September 2017, a sequestration order was made against Ms James' estate. This changed the nature of the present contest. On 23 February Ms S. Nash appeared on behalf of Ms James' trustee in bankruptcy. Ms James sought to argue on 23 February that she should be compensated for improvements she had made to the property before the trustees for sale took possession. But Ms Nash submitted that Ms James no longer had the legal authority to pursue those claims.
3. Ms James did not dispute that she had been made bankrupt. The claims that Ms James proposed to make against her brothers for compensation for improvements to the property now vest in her trustee in bankruptcy under the Bankruptcy Act 1966 (Cth), s 58. The Court refused to hear Ms James on issues about the recovery of this compensation. But it heard her on the question of whether a writ for possession should be granted, and if so, when and on what terms.
4. Provided the necessary evidence concerning these compensation claims is gathered before the property is sold, the claims can be pursued by Ms James' trustee in bankruptcy after the sale. In that event, the claims will become a contest between the trustee in bankruptcy and the plaintiffs about the apportionment of the proceeds of sale of the property upon their distribution by the trustees for sale.
5. In submissions Ms James articulated diffuse complaints about the conduct of her trustee in bankruptcy. She did not substantiate those claims. The trustee in bankruptcy disputes her allegations. This proceeding is not the appropriate forum to resolve differences between Ms James and her trustee in bankruptcy. The Court indicated to her that if she had any complaint about her trustee in bankruptcy, that that was a matter to be dealt with under Federal bankruptcy jurisdiction, not in this Court.
6. So the Court heard Ms James on all matters relating to her continued possession of the property but indicated to her that she would have to look to her trustee in bankruptcy to pursue claims for compensation for improvements on behalf of her bankrupt estate.
7. This division of function became difficult to manage at the hearing. Ms James contended that the assessment of her past work and the conduct of future work at the property were reasons in themselves why she should be left in possession of the property.
8. For this reason her evidence and submissions about her possession of the property often crossed over into the merits of and preparation of her various claims for compensation for improvements and repairs against her brothers. The Court considers that these alleged claims should be considered at least to see whether there is any basis for her to remain in possession of the property for a longer period. They are considered in the next section of these reasons, which deals with her arguments to remain in possession.
9. Ms James did not claim a right to remain in possession as against the trustees for sale. So the issue before the Court was only as to the timing of her leaving the property.
10. At the hearing on 23 February 2018, the Court took the view that Ms James had insufficient time to respond to the affidavits that had been served upon her. So it allowed her an adjournment to 13 March 2018 to permit the matter to be completed part-heard. In the meantime she was required to put on any affidavit evidence in response to the affidavit evidence served by the other side.
11. Thus Ms James was given a de facto additional three weeks from 23 February 2018 to prepare herself for the possibility that a writ of possession might be issued. On 23 February 2018 she was clearly warned by the Court that if a writ for possession was to issue that it would be likely to be issued without further delay, because of the adjournment which she had been afforded.

Ms James' Arguments to Delay the Issue of a Writ of Possession

1. Ms James propounded three different kinds of argument to delay the issue of a writ of possession: (1) she had no money and nowhere to go; (2) her need to do repair and restoration work to the property; and (3) aggravation to her condition of anxiety. For the reasons which follow, none of the arguments that Ms James advanced persuade the Court that the issue of a writ for possession should be delayed, over and above the in-built delay which has now already occurred by the adjournment of the proceedings between 23 February 2018 and 13 March 2018.
2. (1) No Money or Alternative Premises. Ms James argued that the writ for possession should be delayed. She said in submissions, "I've got nowhere to live and I've got no money". But this argument is not persuasive. First, the plaintiff has had the benefit of almost six months' delay since Emmett AJA made his orders in September 2017. Secondly, it has been six weeks since the trustees for sale gave formal notice to vacate to Ms James on the 2 February 2018. Thirdly, there is ordinarily an in-built four to six week delay between the issue of a writ and its execution. Fourthly, Ms James did not explain how her present lack of financial resources would improve if she were granted further delay in the execution of a writ. Fifthly, as Ms Nash pointed out, Ms James' entitlement to apply for rental assistance to social security agencies will be improved by an order for vacant possession. Those matters are, in my view, a complete answer to her first argument.
3. (2) Repairs and Restoration. Ms James tendered photographs and documentary evidence: as to the dilapidation of the Clovelly property; as to the steps that she had taken and that she planned to take to repair and restore the property and prepare it for sale; and as to her expenses in doing so. She said that she should be left in possession to deal with these matters until just before the sale takes place.
4. As to the expenses associated with the past work on the Clovelly property, Ms James tendered receipts of her claimed expenditure. The recovery of this claimed expenditure is now a matter for Ms James' trustee in bankruptcy. The appropriate course is for Ms James to provide all evidence of her past expenditure on the property to her trustee in bankruptcy for the trustee's consideration as to whether a claim will be made against the proceeds of sale on this account. Should the trustee in bankruptcy require it, and should the trustees for sale not otherwise be able to agree with the trustee in bankruptcy, the Court may make orders for the trustee in bankruptcy to have access to the property to gather evidence about Ms James' expenditure. Access can be effected in the period after the trustees for sale obtain possession of the property. It is in Ms James' long-term interests to co-operate in this process.
5. Future pre-sale repairs to the property are not Ms James' responsibility. All steps to prepare the property for sale are incidental functions of the trustees for sale, who have already been secured an allowance of $107,000 to execute repairs to the property. They will execute those repairs and take all other necessary pre-sale preparatory steps after they go into possession. The need for such expenditure is not a reason now to delay the issue of a writ for possession against Ms James. Indeed, it is important that the trustees be able to get on with repair work before sale in the near term.
6. (3) Ms James' Anxiety Condition. Ms James addressed argument to the anxiety she has suffered associated with the issue of the writ for possession and the impact that these proceedings and the loss of possession would have upon her overall health.
7. She tendered a report from a consultant forensic psychologist, of Mr Tim Watson-Munro dated 27 June 2016, which showed at the time of the report she suffered from a significant anxiety disorder. But that report, although admitted into evidence, was sufficiently out of date that it did not give a very reliable picture as to her current mental state. But from her overall behaviour in the court room, which was at times resigned, at other times distracted, and at yet other times hectoring, demanding and defiant, the Court can infer that she is still very anxious about the impending loss of possession of the property. But the Court can infer from some of that conduct that she is must unlikely to co-operate with the trustees for sale whilst she remains in this property.
8. The evidence rather indicates that Ms James is suffering understandable human anxiety about being forcibly removed from a house that provides her with shelter and to which she is emotionally attached. But that anxiety will continue so long as these proceedings are in a state of uncertainty. One advantage of the Court determining this matter now is that a decision will reduce Ms James' anxiety by giving her a definite requirement for departure from which time she must move on with the next phase of her life in a new location.
9. Nothing Ms James said to the Court indicated that her medical or psychological circumstances warranted delay in the issue of a writ for possession. Nothing in the evidence adduced required such a conclusion.

The Plaintiffs' Costs Application

1. The plaintiffs sought orders on 23 February that all the costs associated with these proceedings fall upon Ms James' share of the proceeds of sale. The Court deferred that application to 13 March 2018 and invited Ms James to indicate that were she unsuccessful, why the costs of these proceedings should not come out of her share. Due to time constraints on 23 February this issue was not addressed. But it was partially resolved on 13 March.
2. Ms James argued that the costs should not come out of her share of the proceeds. But her trustee in bankruptcy argued that some of these costs are provable debts in her bankruptcy and as a result the taking of further steps against her in respect of a provable debt contrary to Bankruptcy Act, s 58(2).
3. But for the assistance of others either in the bankruptcy jurisdiction or later in this Court, the Court can record findings about responsibility for the procedural course of this matter. These proceedings since September 2017 have been wholly occasioned by Ms James. The trustees for sale would not have had to seek a writ for possession and occupy the time of the Court had Ms James not resisted the trustees' claim for a writ for possession. The plaintiffs are in no way responsible for the current proceedings. Two sets of costs have been generated through Ms James' resistance to the issue of a writ for possession. The trustees for sale have had to commence these proceedings for the issue of the writ. The plaintiffs have also appeared and incurred some costs associated with the writ. They were entitled to appear. They have responsibly incurred only few costs and, in my view, should be compensated for those minimal costs. In all the circumstances it would be appropriate for Ms James to bear all the costs of these proceedings out of her share of the proceeds of sale of the Clovelly property. But the Court will not order this now.
4. It may have been theoretically possible to try and divide up the costs orders to periods of time before and after her bankruptcy and then make costs orders against Ms James only in respect of the post-bankruptcy period. Such orders would not offend Bankruptcy Act, s 58 and may be provable in a future bankruptcy.
5. But in the short term, the Court has decided not to make costs orders and will reserve costs. If the parties can in the medium term isolate and quantify the post-bankruptcy costs that have been occasioned, then the parties will have liberty to apply as to how they are to be borne among the parties to these proceedings. If the recovery of those costs out of Ms James' share of the proceeds of sale is not resolved in Ms James' bankruptcy, then they may be resolved in this Court and the parties will be able to re-list the proceedings for that purpose.
6. These observations though do not cover all the correspondence that has taken place in the past in relation to the defendant's claimed improvements to the property. The cost of that correspondence will fall to be decided once the trustees' claim for any claim for compensation made by Ms James' trustee in bankruptcy is resolved.

Other Issues on 13 March 2018

1. The proceedings were adjourned on 23 February 2018 but Ms James was put on terms to file by 8 March any evidence she proposed to use on 13 March.
2. Ms James did not comply with the orders to file any affidavit on which she proposed to rely by 8 March 2018. Instead she was late for the 3pm start time for the adjourned hearing. She claimed she was finishing her affidavit, which she brought with her, unsworn. The balance of the proceedings had an allocated time of 1 hour.
3. The Court decided to admit Ms James' late affidavit. She swore to it in the witness box and corrected three matters. The Court then allowed her to tender an additional group of photographs of the property. No prejudice was claimed by the other parties due to the late provision of the affidavit. No party sought to cross-examine Ms James.
4. The material in Ms James' affidavit was of only limited relevance to the question of whether a writ for possession should be issued. But Ms James' affidavit made many scandalous allegations about her brothers. The Court has struck these out of the affidavit and has made confidential orders recording that strike out. The content of this affidavit is yet another reason for the Court to infer that Ms James will not co-operate with the trustees for sale were she to remain in the property before sale.
5. Ms James was given 25 minutes to put her oral submissions. She occupied most of that period speaking of irrelevant matters. The Court reminded her of the need to speak on point but she kept speaking of irrelevancies, insisting that the Court needed to understand the full history of the matter. When she did speak on point she repeated the arguments she put on 23 February that have been dealt with above.
6. In the course of her submissions, Ms James used the Court as a forum of absolute privilege against defamation to make several scandalous allegations against her brothers. There was no evidence of any of these allegations, which her brothers vigorously denied.
7. Ms James demonstrated considerable self-possession and confidence in putting her submissions. After all she has qualified and practised as a solicitor. Should she use her skills to turn her mind to the question of other suitable premises I have little doubt that she would be able to do so. She has no difficulty in asserting her rights. She complains of an anxiety disorder. But it does not obviously interfere with the way she acquits herself in marshalling the content of her submissions in Court.
8. Ms James said she would vacate one week before sale. But this is unworkable. She is unlikely to co-operate with the trustees before sale. Apart from how she behaved in Court, the affidavit evidence of the trustees for sale (Mr Edwin Fritchley's affidavits), establishes a history of dealings showing her inability to co-operate with them.

Conclusion and Orders

1. For these reasons the Court concludes that a writ for possession should issue against Ms James.
2. The Court makes the following orders and directions: 1. Grant leave for the issue of a writ for possession in respect of the land comprised in Folio Identifier 5/301996, being the land situated at and known as 17 Keith Street Clovelly, in the State of New South Wales (the Property). 2. Order that a writ for the possession of the Property issue forthwith. 3. Order that, no later than 20 April 2018, the Defendant and the Third Plaintiff are to provide to the Trustees for Sale lists of improvements said to have been made to the Subject Property, or paid for, by them: 1. in the case of the Defendant: since 15 March 2014; 2. in the case of the Third Plaintiff: since about 2006. 1. Order that, no later than 20 April 2018, the Defendant file and serve an affidavit accounting for any receipts of income in relation to the Property, and how the Defendant has disbursed any such monies, as was required by Order 10 of the Orders dated 25 September 2017. 2. Otherwise suspend until after the execution of the writ for possession of the Property the operation of all other orders made by Emmett AJA on 25 September 2017 requiring the service of affidavits or the inspection of the Property. 3. Direct by 23 April 2018 the trustees file and serve short minutes of order to regulate the re-enlivening such part of the orders made by Emmett AJA on 25 September 2017 for the provision of information to experts as remains relevant. 4. Adjourn these proceedings before me to 26 April 2018 at 9.30am for directions. 5. Add to Order 8(a) of the orders made by Emmett AJA on 25 September 2017 after the words "associated with the sale", the words "which for the avoidance of doubt will include all costs of and incidental to the trustees' motion of 24 January 2018". 6. Grant liberty to apply.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 March 2018