HIS HONOUR: This is an application by the NSW Trustee and Guardian for orders ancillary to orders already made in this Court in relation to principal relief under the Criminal Assets Recovery Act 1990 (NSW). The orders sought include leave for the issue of a writ for possession; an order that the defendant grant or deliver vacant possession; an order for mesne profits; and an order for costs on an indemnity basis.
The matter has proceeded on an ex parte basis before me. However, I am well satisfied from the affidavits read by Ms Fishburn of counsel in support of the application that the defendant has received adequate notice of these proceedings and of today's listing sufficient to provide him with a fair opportunity of appearing today, to read evidence in contradiction of the evidence advanced by the Trustee and advance arguments as to why the orders sought should not be made. On that basis I have decided to proceed with the application in the defendant's absence.
As Ms Fishburn acknowledged in her submissions when a matter proceeds ex parte, I might add particularly a matter involving the disposition of property, including real property constituting a person's home, it is the obligation of the Court to be vigilant in the application of the law to evidence properly read. I have attempted to take that approach. The starting point really is to record that after a previous ex parte hearing on 20 December 2019, Davies J made the following orders:
"1. The defendant is ordered to pay to the Treasurer the amount of $390,136.93 by way of a proceeds assessment order under ss 27 and 28(3) of the Criminal Assets Recovery Act 1990 (NSW).
2. I order that the NSW Trustee and Guardian is to take control of the property described as Lot 22 of Section 24 in Deposited Plan 979187 known as 34 Ninth Street, Weston, New South Wales and registered in the name of Sean Robert Hindmarch.
3. The defendant is to pay the plaintiff's costs of the proceedings."
I interpolate that from the evidence before me I am well satisfied that notwithstanding demands made of him, Mr Hindmarch has steadfastly refused to discharge the amount of the proceeds assessment order, and has failed to take any steps either to reduce his indebtedness under the order of the Court or to take other actions to satisfy the Trustee in relation to its existence.
On 30 August 2021, Fagan J made orders under the provisions of s 30(2)(a) of the Act that the property be sold. His Honour also ordered that the Trustee pay an amount to the Treasurer sufficient to discharge the debt created by the proceeds assessment order, and authorised a delegate of the Trustee to execute any deed or instrument in the name of the defendant and do all things necessary to give validity to the deed or instrument in order that the sale contemplated by order 1 be effected.
I should say that the evidence before me also satisfies me that not only has Mr Hindmarch received, as I have said, sufficient notice but steps had been taken to bring these proceedings to the notice of any other person who might occupy the premises by affixing or attaching to the front door of the premises an envelope containing the relevant proceedings. In this regard, I am well satisfied of that consideration by the evidence contained in the affidavit of James Michael Ferguson, solicitor, sworn on 17 March 2023 and the affidavit of Anthony Michael Hopley affirmed on 9 March 2023.
Given those matters I am satisfied that it is appropriate for me to grant leave under r 39.1(d) Uniform Civil Procedure Rules 2005 (NSW) for the issue of a writ of possession of the land in favour of the Trustee. That writ may be issued forthwith but given the circumstance that the premises constitute the home of the defendant, so far as I can tell on the evidence before me, I am of the view that the writ should not be executed until six weeks' notice of its intended execution is given by either the Trustee or the Sheriff.
I turn then to the question of whether the Trustee is entitled at this stage to an order for mesne profits. May I say in complete compliance with her duty of absolute candour to the Court as counsel, Ms Fishburn has drawn to my attention a body of law which seems to establish a principle that a party entitled to possession may not advance a claim for mesne profits until the party actually obtains and goes into possession. The juristic foundation of the principle is that the cause of action for mesne profits does not accrue until the person entitled to possession actually recovers physical possession of the property. This principle for present purposes may be traced to the decision of Taylor J sitting as a single Judge of the High Court of Australia in Minister for Interior v RT Co Pty Ltd (1962) 107 CLR 1; [1962] HCA 29 at 7‑8 ('Minister v RT Company'). Although a first instance decision as it were of a single justice the principle stated by Taylor J does not seem to have been called into question, overruled or even doubted in subsequent cases, at least where the principle has been drawn to the attention of the judge deciding the case.
In this regard I refer in particular to the decision of Edelman J in Hampton v BHP Billiton Minerals Pty Ltd (No 2) [2012] WASC 285 and to Ward CJ in Eq (as the President then was) in Richardson v Richardson [2021] NSWSC 353. It is sufficient for me to refer to the second of those decisions to emphasise that the principle expressed by Taylor J in 1962 remains the law. Ward J stated the principle in the following general terms (at [152]):
"A claim for mesne profits cannot succeed unless a plaintiff proves that the plaintiff entered into actual possession or occupation of the subject premises before bringing such a claim."
In expressing that conclusion her Honour acknowledged that there were a large number of first instance decisions in which claims for mesne profits by a person entitled to possession not yet in possession had been made and acceded to by the Court (see for example [83]‑[85]). However, as her Honour observed in each of those cases Taylor J's decision in Minister v RT Company had not been cited (see Richardson v Richardson at [152]).
As an example of a case where an order was made contrary to the principle established in the Minister v RT Company, Ms Fishburn drew to my attention the decision of Button J in New South Wales Crime Commission v Vu (No 2) [2015] NSWSC 1064. His Honour was persuaded to make an order for damages for mesne profits. However, with respect the case stands as an example of the observation made by Ward J in Richardson v Richardson where his Honour did not receive the benefit of the assistance I have received today, and no mention was made in argument of the Minister v RT Company and nor of any of the other decisions following it and applying it. It must also be said that in those circumstances his Honour was not given the opportunity to consider the matter in any detail concerning the principle that may apply.
For these reasons I refuse the prayer for relief at para 3 of the notice of motion of 7 February 2022.
I turn then to the question of whether I should award the costs on an indemnity basis. In that regard Ms Fishburn relies upon a number of matters and I will not seek to summarise them in detail. It does seem to me, however, that the defendant has exhibited an attitude of a refusal to observe the previous orders of the Court and, indeed, on occasions where he has chosen to respond to correspondence concerning the matter he has evinced an attitude of defiance of the Court orders (see court book pp 25‑36 and 152). I am also satisfied from the content of the various affidavits of service that he has sought to evade service by the process of keeping house. I am satisfied that his purpose in that regard is to frustrate the due administration of justice in relation to the enforcement of the Court's orders. It seems to me that those matters rise to a level of delinquency of a party to litigation sufficient to justify an order for costs on the indemnity basis and I propose to make that order.
I, for a time, was tempted to think that the circumstance that the Trustee was a Government authority upon whom the obligation of enforcement had been thrust might, of itself, be good reason for ordering costs on an indemnity basis, but upon reflection I am not so persuaded. It would seem to me that such an approach would effectively give rise to a principle that any Government authority taking action in the furtherance of the statutory duties imposed upon it would be entitled to indemnity costs when a successful party to litigation. I hesitate to make such a wide or sweeping statement. Such a general principle cannot be the law.
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Decision last updated: 03 April 2023