Madden v Madden

[2014] NSWSC 1098

Supreme Court of NSW|2014-08-07|Before: Stevenson J, Farrell J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2014-08-07

Before

Stevenson J, Farrell J

Catchwords

176 CLR 300 Falloon v Madden

Source

Original judgment source is linked above.

Catchwords

176 CLR 300 Falloon v Madden

Judgment (14 paragraphs)

[1]

Introduction 1I heard these proceedings on 16 and 17 April, 3 May and 13 June 2012 and gave judgment on 14 June 2012 (Falloon v Madden; Madden v Madden [2012] NSWSC 652) ("the judgment"). In these reasons I shall use the defined expressions adopted in the judgment, and will not, except so far as is necessary, set out the background or reasoning in the judgment. 2A central issue before me in 2012 was the extent to which Bill paid for the purchase, in Margaret's name, of the Woolooware property. I concluded (at [135] of the judgment) that Bill and Margaret contributed very nearly equally to the purchase price of Woolooware and that it followed that Margaret's estate held 50.5 per cent of the interest in Woolooware on a resulting trust for Bill (at [137] of the judgment). 3Another issue before me was the source of funds used, on 23 December 2004, to discharge the Radcliffe debt secured by mortgage over the Woolooware property. I accepted Bill's evidence that the source of those funds was the proceeds of sale of the Exceller Avenue property, which, at the relevant time, was registered in the name of Woolooware Investments (see [188] to [190] of the judgment). However, as I could not come to any conclusion as to whether Bill made any financial contribution to the purchase of the Exceller Avenue property, I could reach no conclusion concerning Bill's claim that Margaret's estate was indebted to him in an amount equal to the payout of the Radcliffe loan (see [191] of the judgment). 4As a number of matters remained for consideration following delivery of my judgment of 14 June 2012, no orders have yet been made in the proceedings. 5One of those issues was that, as Bill was a bankrupt at the relevant time, any interest that Bill had in Woolooware had vested in the Official Trustee. To resolve that issue, Bill commenced proceedings in the Federal Court of Australia. Those proceedings have now been resolved by a judgment of Farrell J given on 8 May 2014 in Madden v Official Trustee in Bankruptcy and Prentice [2014] FCA 446. The effect of her Honour's reasons is that Bill's interest in the Woolooware property has re-vested in him pursuant to s 127 of the Bankruptcy Act 1966 (Cth).

[3]

Background 11These proceedings were commenced by Statement of Claim filed on 25 January 2011. At that time, Mr Jurd was Bill's solicitor. Bill swore two affidavits, one in chief on 1 June 2011 and the second in reply on 10 August 2011. 12In about October 2011, Mr Jurd was diagnosed with a serious illness. Mr Jurd continued working on a reduced basis for some time. However, his health deteriorated and he gave up work in March 2012. 13On the recommendation of Mr Hawach, Ms Jacqueline Saldaneri of Saldaneri and Associates, assumed conduct of the matter. In late March 2012 Mr Jurd left all his files on his desk for collection by Ms Saldaneri. In his affidavit, Mr Jurd said: "As I recall there were two piles of files, each about two feet high plus a box with various loose papers and small files". 14Ms Saldaneri filed an appearance for Bill in court on 16 April 2012, the day the hearing commenced. Ms Saldaneri was in court during the hearing and instructed Mr Evans. 15In July 2012, a month after the judgment was delivered, Bill retained Mr Abraham as his solicitor. Mr Abraham advised Bill to get his files from his former solicitor. Bill did nothing for 12 months because, he said, he was recovering from surgery from an injury in late 2012. 16Mr Abraham followed Bill up and in June 2013 Bill obtained the file from Ms Saldaneri. Bill doubted the file was complete. Nonetheless he made no further enquiries until late 2013 when, for the first time since March 2012, he spoke to Mr Jurd. Bill told Mr Jurd that he expected there would be more documents in the file and that Mr Jurd said: "There were a number of files I had worked on and I left all those files with Sid [Hawach]. Do you know if they checked the secure room in the office where Sid stored documents". 17Bill then asked Ms Saldaneri about the "secure room". Ms Saldaneri said she was unaware of such a room. A couple of days later Ms Saldaneri said she had located a "large box of files" from a "filing room which was locked". Bill collected those documents from Ms Saldaneri in late 2013 and delivered them to Mr Abraham in January 2014. 18Nonetheless, this application was not made until June 2014. There was no explanation provided as to what happened between January and June 2014.

[7]

Margaret's contribution to Woolooware - Margaret's bank statements 29The first category of documents sought to be tendered are records from the Australia and New Zealand Banking Group Limited. Those records comprise, first, 17 pages from Margaret's bank statements from 30 December 1993 to 28 March 1995, and, second, a memorandum dated 9 August 1999 from the "voucher management team" at the ANZ to a solicitor, a Mr Chris Ford. That memorandum sets out some details concerning the deposits made to Margaret's account in 1994 and annexes a deposit slip dated 8 March 1994 concerning a deposit of $80,000 to Margaret's account. 30At the hearing in 2012 only one of these pages from Margaret's bank statements were tendered. It is referred to at [108] of the judgment. During the hearing I was told that this was the only available page from Margaret's bank records and that as the ANZ had destroyed its records from 1994 and 1995, it could not respond to a subpoena. 31I have no doubt that Mr Evans conducted the case upon the basis of his belief that the one page from Margaret's bank statement was all that was available. However, the fact is that somewhere in his legal team's records, there were to be found all of the bank statements. 32I concluded from the one page of Margaret's bank statement that was tendered, and from other evidence, that Margaret had contributed an amount of $401,046.72 to the purchase of Woolooware. That sum is comprised by the three amounts that I referred to at [118] of the judgment. The first was a sum of $71,000 that I concluded was from the deposit paid to Margaret in respect of the sale of her property at Kareela. The second sum, $129,000, was an amount that I held was probably paid to her by the purchasers of the Kareela property in advance of the Kareela settlement, see [99-107] of the judgment. The third was an amount of $200,353.33 shown as a debit on 3 February 1995 (the day before the settlement of the Woolooware purchase) on the one page from Margaret's bank statement in evidence.

[11]

The source of funds to repay the Radcliffe debt 44The balance of the documents the subject of Bill's application related to the issue at [3] above, namely, the repayment of the Radcliffe debt. 45The first document was an order made on 29 March 2005 in proceedings 5449 of 2001 in this Court. In those proceedings Bill was the plaintiff and Richard James Porter, in his capacity as Liquidator of Woolooware Investments, was defendant. 46On that order there is a notation that Bill "will accept in full satisfaction of payment of [a debt the subject of the proceedings], the net proceeds of the sale of the defendant's property located at 7 Exceller Avenue, Bankstown". 47In his affidavit, Mr Abraham has asserted that this showed that Exceller Avenue was "attributable" to Bill. 48However, at the trial, Bill's evidence was that on 23 December 2004 (some three months before the making of this notation) he used the proceeds of Exceller Avenue to pay the Radcliffe debt (see [185] of the judgment). Thus, on Bill's evidence, the notation is irrelevant. 49Another document is what appears to be a page from Woolooware Investments' management accounts entitled "cash management account". That document contains entries suggesting that the sale of Exceller Avenue occurred in February 2006, rather than on 23 December 2004 (when the Radcliffe debt was paid). While that evidence is consistent with the matters I noted in the judgment at [186], it contradicts Bill's evidence at [185]. 50Mr Evans submitted that these pieces of evidence could be reconciled on the basis that Bill obtained a bridging loan in December 2004, which he used to discharge the Radcliffe debt, and that it was this bridging loan that was discharged from the proceeds of the Exceller Avenue sale in February 2006. 51However, Bill gave no such evidence before me, either in his affidavits or when he gave evidence on the 13 April 2012. Further, as I have mentioned, on 13 June 2012, I rejected Mr Evans' attempt to re-open to have Mr Hawach or Bill to give such evidence. I am not prepared to allow Bill to give such evidence now.

Madden v Madden

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