Wentworth v Rogers & 2 Ors

Court of Appeal (NSW)|2004-10-08|Before: Santow JA, Hislop J, Miles AJ, Colour Services P, Gordon J

CITATION : Wentworth v Rogers & 2 Ors [2004] NSWCA 401 HEARING DATE(S) : 8 October 2004 JUDGMENT DATE : 8 November 2004

JUDGMENT OF : Santow JA at 1; Hislop J at 20 DECISION : Application for leave to appeal dismissed with orders as in [19].

CATCHWORDS : PRACTICE AND PROCEDURE - Leave to appeal against Miles AJ's dismissal of application for review of decision by Registrar to set aside two garnishment notices. LEGISLATION CITED : Supreme Court Act 1970 s81; s119(3) Supreme Court Rules Pt 46 r3; Pt 61 r1(6) Gartside v IRC [1968] AC 553 CASES CITED : Harris v Caladine (1991) 172 CLR 84 Watson v Hanimex Colour Services P/L (NSWCA, 28 November 1991, unreported) Katherine WENTWORTH (Claimant) PARTIES : Gordon J ROGERS (First Opponent) ST GEORGE BANK (Second Opponent) Michael John BRAY and David Peter JACKSON as Trustees of the Estate of the late Laura Helen Cynthia Rogers (Third Opponents) FILE NUMBER(S) : CA 40574/03; 8/86 Claimant in Person COUNSEL : First Opponent no appearance J HARRIS (Second Opponent) P DOWDY (Third Opponent) Beazley Singleton (First Opponent) SOLICITORS : Michael H S Bowan, St George Bank Limited (Second Opponent) Bray, Jackson & Co (Third Opponent)

LOWER COURT Supreme Court - Common Law Division JURISDICTION : LOWER COURT SC19228/82 FILE NUMBER(S) : LOWER COURT Miles AJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40574/03 CA 8/86 SC 19228/82

8 NOVEMBER 2004 Katherine WENTWORTH v Gordon J ROGERS & 2 Ors Judgment 1 SANTOW JA: INTRODUCTION The claimant, Ms Wentworth, seeks leave to appeal against dismissal of her application for review of a decision of Registrar Whitehead to set aside two garnishment notices filed and served on 10 February 2003. That filing and service was pursuant to Ms Wentworth's application made under Pt 46 r3 Supreme Court Rules and granted by an earlier Registrar. The first opponent and defendant is Mr Gordon Rogers of whom Ms Wentworth is a judgment creditor. The second opponent is St George Bank Limited against which bank Ms Wentworth served those garnishment notices. They were subsequently set aside by Registrar Whitehead on 3 March 2003. His reasons for doing so are contained in a judgment of that date. That decision was itself the subject of review by Miles AJ resulting in a further detailed judgment of 16 June 2003. That judgment is now the subject of the present application for leave to appeal. The circumstances and issues are sufficiently set out in the two judgments so that I do not need to repeat them in any detail. 2 The debt sought to be attached by Ms Wentworth was described in her application for leave under Pt 46 r3 in these terms: "monies held in the account for the estate of the late Laura Helen Cynthia Rogers, savings account No. 3822, as sole beneficiary in respect of the amount so held". In permitting the garnishment notices to be filed and served on 10 February 2003, the Registrar then dealing with that application did so ex parte and in Chambers. Part 46 r3(1) Supreme Court Rules provides that a garnishment notice is both a notice of attachment of debts due or accruing due to the judgment debtor from the garnishee and also a notice of motion for payment. The Notices of Motion were returnable on 24 February 2003. 3 The third opponents are Michael John Bray and David Peter Jackson, trustees of the estate of the late Laura Helen Cynthia Rogers, to whom Ms Wentworth provided copies of the garnishment notices. 4 The hearing before Registrar Whitehead took place on 3 March 2003. St George Bank was represented by a solicitor and Ms Wentworth appeared for herself. Whilst not denying that it held funds in an account on behalf of the estate, St George Bank denied that it owed a debt to Mr Rogers. Otherwise St George Bank submitted to the order of the court. 5 The Registrar's judgment of 3 March 2003 concluded with his actual orders setting aside the garnishment notices. Those orders were not expressed to take effect other than immediately. According to annexures to the affidavit of 5 December 2003 of Ms Booth, solicitor for St George Bank Limited, attaching the relevant bank records, the funds were then removed on 3 March 2003, as appears from Annexure B and the account closed. The proceeds therefore ceased to be in that account from such time as it took to process the relevant transactions and the account ceased to exist. 6 Ms Wentworth on the same day applied to have the determination and orders reviewed and set aside. She emphasised in her submissions to this Court that this necessarily pre-dated the orders of Registrar Whitehead being formally taken out, as that did not occur till 18 March 2003. The result of that review by Miles AJ is contained in his judgment of 16 June 2003. He dismissed her application for review, essentially on the basis that upon the proper construction of the trust contained in the Will of Mr Roger's late mother, there was no debt due or accruing to Mr Rogers from the Trustees. He also dealt with a number of other arguments put by Ms Wentworth in support of her contention that there was indeed a debt due to Mr Rogers from the Trustees. 7 For convenience, I quote clause 4 containing the trust, of which the concluding words of cl 4(b) and cl 4(d) should be specially noted. They clearly gave Mr Rogers no actual interest in the capital or income of the residuary estate, dependent as this was on a favourable exercise of the Trustee's discretion in favour of Mr Rogers as has not occurred. I quote cl 4 as follows, including the last part of cl 4(b) which seems to have been accidentally omitted from Miles AJ's judgment at [8], but which is important.

"4. I GIVE DEVISE AND BEQUEATH the rest and residue of my estate both real and personal of whatsoever kind or nature and wheresoever situate of or to which I shall be seised possessed or entitled at my death unto my Trustees UPON TRUST to sell call in and convert into money such part or parts thereof as shall not consist of money at such time or times as they shall think fit with power to postpone such sale calling in or conversion during such period or periods as they shall think proper and to hold the proceeds of such sale calling in or conversion and any ready moneys of mine and any part or parts of my estate for the time being unconverted UPON TRUST to pay thereout all my just debts funeral and testamentary expenses and all duties whether Federal or State payable in respect of my estate or in consequence of my death and to hold the balance then remaining (hereinafter called "my Residuary Trust Estate") to set up a Fund ("the Fund"):-

(a) TO invest the Fund as authorised by law or any clause under this Will.

(b) TO pay all or part of the income and all or part of the capital of the Fund to my son GORDON JOHN ROGERS at such times my Executors in their discretion think fit without any obligation to make any payments at all .

(c) MY Executors may exercise any powers given to them by law or this Will and in addition they may during the twenty-one years from my death (if the trusts exist so long) accumulate income to the Fund so that surface income becomes part of the Fund and after twenty-one years from my death apply any surface income amongst such of my grandchildren then living.

(d) IF the said GORDON JOHN ROGERS dies before me or during the subsistence of these trusts leaving children then those children shall be entitled to share the Fund absolutely. [emphasis added]

DISPOSITION OF LEAVE TO APPEAL 8 I consider that no error of principle or substantial injustice attends the Registrar's original decision or its review by Miles AJ. In any event, were leave to appeal granted it would be a futility. There are no funds and no account to be garnisheed. Moreover, the construction pressed by Ms Wentworth of the relevant clauses of the Will, both before Miles AJ and again before this Court, was in my view untenable, being at odds with the plain meaning of clause 4. The concluding words of cl 4(b) were clearly not severable as Ms Wentworth contended. It can be taken that "such of my grandchildren then living" in cl 4(c) would have included those named by the testator as her granddaughters in cl 3 of the Will in the absence of evidence to the contrary (see [9] in judgment of Miles AJ). 9 Ms Wentworth attempted to demonstrate that the Trustees had disregarded the requirements of the Will by permitting monies to be paid at Mr Rogers' behest to one grandchild. Even if that were true, and I am not satisfied that it was, it would not confer a different construction to the plain words of clause 4 of the Will, or create a debt in favour of Mr Rogers where none existed. 10 In those circumstances, Mr Rogers' interest is simply as a discretionary object of a discretionary trust to which the observations of Lord Reid in Gartside v IRC [1968] AC 553 at 606 are precisely applicable:

"No object of a discretionary trust has, as such, any legal right to or in the capital. His sole interest, if it be an 'interest', within the scope of these provisions, is with regard to the income; he can require the trustees to exercise, in bona fide, their discretion as to how it shall be distributed, and he can take and enjoy whatever part of the income the trustees choose to give to him. I cannot see any ground for holding that he can have any 'interest' in the capital if he has no interest in the income." 11 No error of principle was demonstrated by Ms Wentworth in the judgment of Miles AJ and its reasoning as to justify leave being granted. 12 Nor is there any substance in Ms Wentworth's contention that the Bank was somehow bound to hold the monies in the account pending her application for a review being determined by Miles AJ and, it would appear, now this Court. Orders made in the judgment necessarily take effect upon the publication of that judgment, not from the time the orders are in any formal sense "taken out". This, as submitted by the Bank, was made clear by the High Court in the specific context of applications for review of a Registrar's decision; Harris v Caladine (1991) 172 CLR 84 at 97 per Mason CJ and Deane J, 106 per Brennan J, 126-7 per Dawson J, 154 per Gaudron J. And as was said in Watson v Hanimex Colour Services P/L (NSWCA, 28 November 1991, unreported) at [20] by Kirby P (Hope and Handley JJA agreeing on this point): "[I]nvoking the review procedure does not sweep aside the effect of the decision. It remains valid unless the Judge, on review, otherwise orders." That has not happened. 13 Finally, Ms Wentworth submitted that the Trustees had mistakenly sought to have standing before the Registrar and subsequently Miles AJ as the garnishee, when in truth the Bank was the garnishee. Even if one accepts that proposition, I agree with the submission of the Trustees that Messrs Bray and Jackson as legal owners of the chose in action entitling them to re-payment of the debt owed to them by the St George Bank, had a right to appear and argue their position, as indeed recognised by Pt 46 r10 of Supreme Court Rules. In those circumstances it could not tenably be suggested that their appearance before either the Registrar or Miles AJ somehow vitiated the result. 14 In further written submissions filed by leave of the Court, Ms Wentworth sought to draw a distinction between the garnishment notice filed in SC 19228/82 in respect of the judgment debt of $123,051.85 (plus interest and costs) and the garnishment notice filed in CA 8/86 in respect of the judgment debt of $45,001.99 (plus interest and costs). Ms Wentworth submitted that neither the Registrar nor Miles AJ had jurisdiction to make any order in respect of the Court of Appeal proceedings, and that consequently they remain undetermined. 15 This submission is without foundation. Section 119(3) of the Supreme Court Act 1970 states:

"Notwithstanding the provisions of any other Act, a registrar may exercise the powers of any other registrar if and so far as he or she is authorised to do so by the rules, and when so doing, he or she shall be deemed to be that other registrar." 16 The Supreme Court Rules further provide that "a registrar may exercise the powers and perform the duties of any other registrar"; SCR Pt 61 r1(6). These provisions clearly show that a registrar in the common law division can, if need be, exercise the powers of a Court of Appeal registrar, and vice-versa. The Registrar here clearly possessed jurisdiction in respect of CA 8/86. 17 Even if this were not so, s81 Supreme Court Act 1970 provides that a failure to comply with the Act or rules at any stage in the course of or in connection with any proceedings, is to be treated as an irregularity only and shall not nullify any step taken in the proceedings, or any judgement or order therein. Even if contrary to fact, it were in excess of jurisdiction for the registrar to have dealt with the CA 8/86 matter, then the result is merely that the judgment is irregular and voidable unless and until it is set aside. The Court is given a wide discretion under s81(1)(b) to determine the consequences that will flow from a failure to comply. 18 In the circumstances that here obtain, I would not set aside the orders made as far as they relate to the CA 8/86 matter, which therefore remain effective and valid. The reasoning which was correctly applied by the Registrar and Miles AJ is determinative of both garnishment notices. Thus a decision has already been made on the merits of attachment of the estate bank account with respect to the SC 19228/82 matter (by the Registrar and then affirmed on review by Miles AJ). No question of jurisdiction could there arise so far as the Registrar or Miles AJ were concerned. Any further garnishee proceedings in respect of the account in relation to the garnishment notice filed in CA 8/86 would raise precisely the same questions as had been already determined in relation to SC 1928/82. While, these being interlocutory proceedings, no issue estoppel applies, nonetheless this is sufficient reason for any irregularity to have no consequence. I should add that the irregularity, if such there were, related to the filings in CA 8/86, which have been cured by the orders made by consent on 8 October 2004. 19 So far substantial costs have been incurred by the Trustees in defending against these garnishee proceedings. It should have been apparent that those proceedings had no basis in any debt owed by the Trustees to Mr Rogers, certainly after the Registrar's decision of 3 March 2003. By letter from the Trustees to Ms Wentworth dated 25 June 2003 warning was given that indemnity costs would be sought were Ms Wentworth to proceed with the present application. The present application for leave to appeal by way of yet a further review was clearly misconceived and bound to fail. Accordingly, I consider that in relation to this application for leave to appeal, the Trustees' costs and the Bank's costs should be assessed forthwith and paid by Ms Wentworth on an indemnity basis. I would so order and I would dismiss her application for leave to appeal. 20 HISLOP J: I agree with Santow JA. **********

Last Modified: 11/09/2004 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.

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