Wentworth v Rogers and Anor

Wentworth v Rogers and Anor - [2003] NSWSC 944 - NSWSC 2003 case summary — Zoe

CATCHWORDS : Costs - General Rule - costs follow the event - whether there should be a departure from the rule - whether costs should be on an indemnity basis - extent of the order for costs. Injunctions and undertakings - Injunctions for particular purposes - whether they should remain after action is dismissed - Payment into court - whether it should be paid out and to whom. Conveyancing Act 1919 - s 37A LEGISLATION CITED : Supreme Court Rules - Pt 47, Pt 52 r 11, Pt 52A r 22(6) Judgment Creditors Remedies Act - s 27 Degman Pty Ltd (In Liq) v Wright No. 2 [1983] 2 NSWLR 354 Latoudis v Casey (1970) CLR 534 Oshlack v Richmond River Council (1998) 193 CLR 72 Milne v Attorney-General (Tas) (1956) 95 CLR 460 Jamal v Secretary , Department of Health (1988) 14 NSWLR 252 Commissioner of Australian Federal Police v Razzi (No. 2) (1991) 30 FCR 64 Waters v P C Henderson (Australia) Pty Ltd (unreported, NSWCA, 6 July 1994) Wentworth v Rogers [1999] NSWCA 403 Wentworth v Rogers (No. 5) (1986) 6 NSWLR 534 Fountain Selected Meats (Sales) Pty Ltd v Internaitonal Produce Merchants Pty Ltd (1988) 81 ALR 397 CASES CITED : Qantas Airways Ltd v Dilligham Corp (unreported NSWSC 14 May 1987) Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 Nobrega v Trustees of the Roman Catholic Church of the Archdiocese of Sydney (No. 2) [1999] NSWCA 133 LMI Australia Pty :Ltd v Baulderstone Hornibrook Pty Ltd [2003] NSWCA 74 Palmer Bruyn & Parker Pty Ltd v Parsons (No. 2) [2000] NSWCA 102 Wentworth v Graham [2003] NSWCA 229 SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 Skalkos v Assaf No. 2 [2002] NSWCA 236 Jones v Bradley (No. 2) [2003] NSWCA 258 Colgate Palmolive Co. Pty Ltd v Cussons Pty Ltd (1993) 46 FCR 225 Walton v McBride (1995) 36 NSWLR 440 Wentworth v Rogers [2003] NSWSC 474 PARTIES : Katherine Wentworth v Gordon John Rogers and Anor FILE NUMBER(S) : SC 11094/95 Plaintiff - Ms Wentworth in person COUNSEL : 1st Defendant - No appearance (Mr Lovas mentioned for Mr Rogers) 2nd Defendant - Mr R. Lovas Plaintiff - in person SOLICITORS : 1st Defendant - No appearance 2nd Defendant - Dorrough Smart Solicitors

[6]

AS TO COSTS Introduction 1 His Honour: On 9 May 2003 I handed down judgment in this matter and ordered that the plaintiff's summons be dismissed and that there be verdict and judgment entered for the defendants in respect of the statement of claim. I also ordered that the plaintiff pay the defendants' costs. However, before that order was entered, I was asked by the parties to hear further submissions on the question of costs before making final orders on that matter. I have power to consider whether the order made should be set aside or varied; Degman Pty Ltd (In Liq) v Wright No 2 [1983] 2 NSWLR 354. I received 14 pages of written submissions on behalf of the second defendant and 15 pages from the plaintiff on the question of costs prior to the hearing. These two parties made further oral submissions at a hearing on 15 July last that went for the best part of a day. The matter was then reserved. The plaintiff sought and was granted leave to file further written submissions after judgment was reserved. I received a further 16 pages of submissions from the plaintiff and a further 7 pages on behalf of the second defendant. 2 The summons and statement of claim both concerned an attempt by the plaintiff, Ms Wentworth, to have certain property transactions between the defendants, Mr and Mrs Rogers, set aside on the basis that they amounted to a fraudulent alienation. Ms Wentworth relied principally on s 37A of the Conveyancing Act and, if necessary, the inherent power of this Court to protect its own process. She contended that the mortgage and associated deed and transfer, in respect of a property, Te Mata, held initially by the defendants as joint tenants, were designed to deprive her of any chance of recovering against judgments made in her favour in this Court against Mr Rogers. For ease of reference I will refer to Ms Wentworth's claim as "the property matter". 3 The property matter was, to a large part, determined by findings I made in respect of a number of documents that Ms Wentworth had relied upon to prove her contention that Mr and Mrs Rogers and others had acted fraudulently to disadvantage her as a creditor of Mr Rogers. Ms Wentworth asserted that the documents were fraudulently prepared by the defendants, or on their behalf, but I was not persuaded that they were. Mr and Mrs Rogers gave evidence and I formed a favourable view of the credibility of Mrs Rogers in determining that Ms Wentworth had not made out her case. 4 In brief Ms Wentworth contends that the normal rule, that costs follow the event, should not apply in the special circumstances of this particular matter. She argues that costs should be awarded in her favour by reason of the misconduct of the defendants both before and during the hearing and what she submits was her success in respect of a number of issues that arose in the course of determining her claim. Ms Wentworth also seeks orders against Mr Lovas counsel appearing for Mrs Rogers. 5 Mrs Rogers argues that costs should be awarded in her favour on an indemnity basis for a number of reasons but principally because of what is said to be a Calderbank letter sent by her to Ms Wentworth prior to the hearing of the claim. Mr Rogers was not present at the costs hearing and relied upon the submissions made on behalf of Mrs Rogers. 6 Ms Wentworth and Mr Rogers have been engaged in litigation before this Court for almost two decades in respect of three distinct but related actions: firstly, prerogative relief in respect of the criminal proceedings brought by Ms Wentworth against Mr Rogers; secondly, a claim for damages for personal injury brought by Ms Wentworth against Mr Rogers in respect of the conduct which gave rise to the criminal proceedings; thirdly, a cross-claim by Mr Rogers for damages arising from the alleged malicious prosecution of him by Ms Wentworth. The third of those matters is still unresolved. It is only necessary to refer to the history of the property matters to resolve the present matter.

[7]

Chronology of proceedings 7 The following chronology is relevant to the questions arising on the conflicting applications for costs made by the parties. Later in the judgment I shall refer to a chronology relevant to the restraining orders and undertakings relating to Te Mata. 8 In April 1994 Mr Rogers granted a mortgage over his half share in Te Mata to Mrs Rogers purportedly as security for a debt of $130,000. In that same month Sully J severed Mr Rogers's cross-claim from Ms Wentworth's claim for damages. His Honour and a jury later heard Ms Wentworth's action. On 24 June 1994 the jury awarded Ms Wentworth the sum of $2,000. Sully J ordered that Mr Rogers pay half of Ms Wentworth's costs. 9 On 5 October 1994 Ms Wentworth sought an order from the Court of Appeal in effect reversing the property transactions in respect of Te Mata. Mr Rogers did not appear on that date. While the Court was of the view that relief should be sought in the Common Law Division, on 6 October 1994 it made orders in effect restraining Mr Rogers from further dealing with the property until 17 October 1994. 10 On 11 October 1994 Ms Wentworth by notice of motion commenced the present proceedings. 11 On 17 October 1994 the property matter came before Bruce J. Mr Rogers did not appear on that date. The matter was adjourned to 24 October and the order restraining Mr Rogers from dealing with the property was continued. No order was made as to costs. 12 On 24 October 1994 the property matter and Mr Rogers's cross-claim came before Loveday AJ. Mr Rogers did not appear on that date. An order was made joining Mrs Rogers as a party to the property matter. On the same date Loveday AJ dismissed Mr Rogers's cross-claim for want of prosecution. His Honour made an order that Mr Roger's pay the plaintiff's costs. The property matter was stood over to 14 November 1994. 13 On 14 November 1994 the property matter was stood over to the next day after Grove J disqualified himself from hearing it. On that date both defendants were present and legally represented. 14 On 15 November 1994 the property matter came again before Bruce J. Mr and Mrs Rogers sought an adjournment of the proceedings, which application Ms Wentworth initially opposed. However, after cross-examining witnesses, she consented to the application. The matter was adjourned to 12 December 1995 and Bruce J reserved the question of costs. 15 On 12 December 1994 Mr Rogers commenced proceedings to set aside the orders of Loveday AJ. The property matter was adjourned. 16 On 15 December 1994 both the property matter and Mr Rogers's application came before Spender AJ. The defendants successfully sought an adjournment. There was no order made as to costs. 17 On 12 March 1995 the property matter came before Hulme J. Ms Wentworth sought, and was allowed, to examine Mr Rogers as to the non-production of documents. As a result of this hearing Mr Rogers produced further documents. Mrs Rogers unsuccessfully sought to have the order making her a party to the proceedings revoked. Hulme J made no order with respect to the costs of that hearing. 18 On 24 March 1995 Sperling J commenced to hear the applications then on foot, being the property matter and Mr Rogers's application to set aside the order of Loveday AJ. After four days of the hearing Sperling J determined to sever the property matter and to proceed only with the hearing of Mr Rogers's application. His Honour gave leave for Ms Wentworth to file a summons in substitution for notice of motion. 19 On 10 September 1996 Sperling J gave judgment setting aside the order of Loveday AJ dismissing Mr Roger's cross-claim. 20 On 26 February 1997, Sperling J ordered that the parties file written submissions in respect of the question of costs in relation to the proceedings before him. 21 On 7 March 1997 Sperling J, while disqualifying himself from hearing any other matter between the parties, refused Ms Wentworth's application that he disqualify himself from further dealing with matters which were consequential upon his judgment of 10 September 1996. 22 On 28 August 1997 Sperling J ordered that Ms Wentworth and Mr Russo, a solicitor, pay the "costs of and incidental to" Mr Rogers's application on an indemnity basis. 23 On 17 September 2001 the property matter and the cross-claim came before me. Ms Wentworth initially asked me to disqualify myself but ultimately did not continue that application. 24 On 28 November 2001 I determined that the property matter should proceed in priority to the cross-claim. 25 On 7 December 2001 an application by Ms Wentworth for compulsory mediation was refused. 26 On 29 January 2002 the hearing of Ms Wentworth's application commenced and proceeded for 24 days over that year.

[8]

Should the usual rule be followed? 27 As I have already indicated, Ms Wentworth submits that special circumstances exist in the present matter justifying a departure from the usual rule that costs follow the event. Ms Wentworth claims that she has been successful on a number of issues that fell to be decided in determining her claim and should be awarded costs in respect of those matters. Ms Wentworth submits that by reason of the prolongation of the hearing by the misconduct of the defendants and their legal representatives, including preparing false documents, concealing documents from her and the court, and swearing false affidavits, an order for costs should be made on an indemnity basis in her favour. She also seeks that action be taken as a preliminary step in ordering costs against Mrs Rogers's barrister because of his alleged misconduct in the proceedings. Finally, Ms Wentworth seeks costs in respect of interlocutory hearings leading up to the hearing of her claim. 28 Ms Wentworth submits that she was all but successful in the matters she sought to prove at the outset of the hearing of the property matter. She interprets the reasons for judgment as indicating that she was unsuccessful in her claim only because it was found that Mrs Rogers was a "preferred creditor". Ms Wentworth contends that she was successful in proving that the property transactions were fraudulent, being not for full consideration, and, therefore, had established the pre-conditions which should have required the Court to set them aside under s 37A of the Conveyancing Act. Ms Wentworth submits that she had "succeeded overall" on the issues and should be awarded costs. 29 Ms Wentworth also seeks that costs orders be made in her favour in respect of a number of the interlocutory proceedings leading up to the hearing before me. She claims costs in respect of the proceedings before Bruce J on 17 October 1994, Loveday AJ on 24 October 1994, Bruce J on 15 November 1994, Spender AJ on 15 December 1994, Smart AJ in February 1995 and Hulme J on 12 and 13 March 1995. In respect of the aborted proceedings before Sperling J, Ms Wentworth contends that the second defendant is estopped from seeking costs for reasons that I shall examine shortly. 30 Ms Wentworth submits that, because of "demonstrable misconduct" by both defendants and counsel appearing for Mrs Rogers, costs should be ordered in her favour against them. Ms Wentworth relies upon submissions she made during the hearing and after judgment was delivered as to allegations of false swearing by both defendants, the concealment of documents, forging of documents and other misconduct by the defendants. Ms Wentworth alleges that Mrs Rogers's counsel assisted the defendants in this regard with the intention of defrauding Ms Wentworth and misleading the Court.

[9]

The normal rule should apply 31 In my opinion there is no reason to depart from the normal rule in the present case and Ms Wentworth should pay the costs of the defendants in respect of the hearing before me. 32 I acknowledge that there is a broad discretion to be exercised by the Court in a judicial and principled way in making orders in respect of the payment of costs. That discretion goes so far as permitting the Court in an appropriate case to depart from the normal rule to a greater or lesser extent depending upon the circumstances of the case, see Pt 52 r 11 of Supreme Court Rules. The width of the discretion was emphasised in Latoudis v Casey (1970) CLR 534 especially by Dawson J at 557: the discretion is only fettered by such guidelines and principles as are formulated to ensure consistency of approach and prevent arbitrariness in its exercise. The fundamental principle in exercising the discretion appears to me to be that the rationale for the awarding of costs is to indemnify the successful party and not to punish the party who was unsuccessful. 33 In Latoudis v Casey at 542 Mason CJ stated that "in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant". This statement was considered and accepted as a statement of general principle in Oshlack v Richmond River Council (1998) 193 CLR 72. The difference of opinion between the members of the Court in that case was the principle applied in the particular case under consideration. The principle accords with what the High Court has identified as a general rule "that a wholly successful defendant should receive his costs unless good reason is shown to the contrary"; Milne v Attorney-General (Tas) (1956) 95 CLR 460 at 477. But this is merely one of the guidelines that assist in the exercise of the broad discretion and the successful party has no right to have costs awarded in its favour: Oshlack v Richmond River Council per Gaudron and Gummow JJ at [35]. 34 In Oshlack v Richmond River Council McHugh J considered the circumstances in which an exception to the general rule might arise, including cases where there has been misconduct by the successful party. His Honour stated at [69] (omitting the footnotes):

[12]

It is because the general purpose of an order for costs in favour of a successful party is to provide compensation in the form of a partial indemnity for the costs incurred that the ordinary principle observed in civil litigation under the "English rule" (as contrasted to the "American rule") is that legal costs will usually be ordered in favour of the successful party. Absent special statutory provisions, Australian law has followed this English rule. But the compensatory principle cannot be treated as an absolute rule. Otherwise, the discretion conferred in unqualified terms would indeed be shackled and confined. To permit this would be incompatible with statutory language expressed in such terms. Therefore, although there are rules" or ordinary principles which will guide the donee of power in the exercise of the discretion, they cannot extinguish the element of discretion. They must not be allowed to harden into rigid or inflexible requirements. 37 I also accept that one qualification of the ordinary rule may be where there are multiple and discreet issues arising in the hearing and the successful party in the proceedings was not successful in respect of an issue or issues that that party chose to raise and which resulted in significant detriment to the unsuccessful party. That detriment may be found in costs being unnecessarily expended by the unsuccessful party as a result of the prolongation of the proceedings or in contesting the issue; Jamal v Secretary, Department of Health (1988) 14 NSWLR 252 at 271-272. The rationale behind this approach is an attempt to limit the matters placed in dispute by the parties in a climate of increasing court delays and high costs of litigation: Commissioner of Australian Federal Police v Razzi (No 2) (1991) 30 FCR 64 at 69. These were cases dealing with appeals but the principle can be no different at first instance. 38 But even where such discreet issues can be identified, it does not necessarily follow that the Court should embark upon the task of apportioning the costs based upon the time or effort consumed in dealing with each issue during the hearing; Waters v P C Henderson (Australia) Pty Ltd (unreported, NSWCA, 6 July 1994) per Mahoney JA. The question of the appropriate order for costs in a particular case is ultimately an exercise of discretion to arrive at a fair and just result as between the parties by applying recognised principles. Unless a particular issue or group of issues is clearly dominant and separable, it will ordinarily be appropriate to order the costs of the proceedings be paid by the unsuccessful party; Waters v P C Henderson, above. 39 Ms Wentworth's submission that she should receive an order for costs in her favour because she succeeded on a number of issues that fell to be determined and only failed at the final hurdle, as it were, should be rejected even if it is assumed that the submission is based upon an accurate reflection of the findings in the judgment dismissing her action. It is not a case of the court assessing how close the unsuccessful party came to success and determining the issue of costs accordingly. In Latoudis v Casey McHugh J stated at 567 (my underlining):

[13]

The rationale of the order [for costs] is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings . It may, and usually will, be made even though the action has failed through no fault of the unsuccessful party 40 In the present case there were no discrete factual issues raised, contested and determined adversely to the defendants that would justify the court determining the question of costs in the way that Ms Wentworth seeks. Ms Wentworth brought the action and she had to prove a number of factual matters before s 37A of the Conveyancing Act or the inherent jurisdiction of the Court was engaged. She failed in that endeavour. The type of relief that she sought and the evidence upon which she relied to support her claim raised the issues that had to be determined during the hearing. None of them were so predominant or separable that any success she may have had on any one or more issues should result in an order of costs in her favour. 41 In any event I do not believe that Ms Wentworth had the success that she claims. I do not intend to canvass the issues raised and determined by the judgment or Ms Wentworth's complaints about factual and legal errors in it. The simple fact is that it was held that Ms Wentworth failed to prove what she set out to establish: that the defendants acted fraudulently in carrying out the property transactions and preparing documents said by them to support the justification for those transactions. 42 Nor was there misconduct by the defendants in the conduct of or leading up to the proceedings that would warrant their being deprived of an order to which they were otherwise entitled. Ms Wentworth persists in allegations of false swearing and perjury against the defendants notwithstanding the findings in the judgment. She complains that the defendants and their legal representatives intentionally failed to produce documents until the hearing. But in light of the history of the litigation and the conduct of the hearing I do not believe that, even were that complaint justified, it should affect the order as to costs. 43 There is no matter in my view that amounts to misconduct of the type to which McHugh J referred. I am prepared to accept that his Honour was not endeavouring to state exhaustively the list of matters that might disentitle a successful party to some or all of its costs. But the conduct must be such that reflects upon the question of what order is just and reasonable to compensate the successful party in the litigation. It is not a case of making an order to punish the party for misconduct per se but what is necessary to compensate the other party for costs caused by the misconduct, for example where it unreasonably prolonged the litigation, see for example Degman Pty Ltd (In Liq) v Wright No 2, above at 358D. 44 It does not seem to me that the situation is any different in respect to any power that the Court has to make an order on the issue of costs in respect of a legal practitioner. The power to deal with orders for costs against solicitors was considered by the Court of Appeal in dismissing appeals by Ms Wentworth and Mr Russo against the costs orders made by Sperling J, Wentworth v Rogers [1999] NSWCA 403. The Court of Appeal referred to dicta in a number of English authorities as to the principles upon which such an order should be made against a solicitor and held that they were applicable to the power to be exercised by a court in this State. The authorities referred to establish that the power is not exercised to punish the practitioner but to protect his client and to indemnify the party who has suffered as a result of the misconduct. 45 Ms Wentworth relies upon what is said to be the misconduct of Mr Lovas in being a party to false evidence being placed before Bruce J, before Sperling J and before me. There is in my view no basis for the allegations and they are to some extent inconsistent with findings made by Sperling J and myself. There is no occasion for Mr Lovas to be called upon to account for any of his conduct in the proceedings on the issue of the order of costs. In any event there is in my view no misconduct of the defendants that should sound in costs being awarded in favour of Ms Wentworth taking into account the whole of the conduct of the proceedings by both the defendants and Ms Wentworth.

[23]

(f) "Future conduct" 59 It was submitted on Mrs Rogers's behalf that there would be a reasonable apprehension held by the Court that Ms Wentworth "will make the cost assessment procedure long and difficult". To support that submission reliance was placed upon what was said to be "the extraordinary volume of litigation that the plaintiff has initiated over Sperling J's costs orders made against Ms Wentworth and Mr Russo". There is set out in the submissions on behalf of Mrs Rogers a schedule of judgments said to relate to proceedings instituted by Ms Wentworth in connection with the costs orders made by Sperling J. It is asserted that the costs assessment remains incomplete notwithstanding the litigation referred to in the schedule. In effect the submission is that an order that the costs be ordered on an indemnity basis would protect Mrs Rogers as a form of "insurance". 60 This is not in my view a proper matter for this Court to take into consideration in determining whether to order costs on an indemnity basis either by itself or in conjunction with the other matters relied upon by Mrs Rogers. It is not for this Court to attempt to regulate or control the conduct of other proceedings, whether they be in relation to the assessment of costs or otherwise. It is for the court that has the jurisdiction to take what action it considers necessary to prevent an abuse of its process by a litigant before it. The Court of Appeal has recently exercised such a power in respect of proceedings then before it: Wentworth v Graham [2003] NSWCA 229. I do not believe that I am entitled to exercise some power or discretion that I may have for the purpose of influencing the conduct of proceedings in this Court over which I have no control. Presumably none of the Courts, to which reference is made in the schedule contained in the submissions, have thought it was necessary to exercise such a power in respect of the proceedings before them. I should not infer that Ms Wentworth has acted improperly or vexatiously in respect of the applications she has brought to those courts.

[24]

Costs should be awarded on a party and party basis 61 The ordinary rule is that costs should be awarded on a party and party basis unless there is some special circumstance that justifies a different result. But the discretion is a broad one and there is no rule that any particular matter should affect the manner in which that discretion is exercised Nobrega at [20]. In particular, the failure to do better at trial than an offer made in a Calderbank letter is only one consideration amongst many to be taken into account in determining whether special circumstances exist and does not of itself warrant a departure from the ordinary rules; SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37] Skalkos v Assaf No 2 [2002] NSWCA 236 at [13], LMI Australia, above at [119]. Most recently in Jones v Bradley (No2) [2003] NSWCA 258 the Court of Appeal confirmed that the approach taken in SMEC Testing Services was correct. 62 Ms Wentworth submitted that there was nothing in the conduct of the case by her that would justify an order of indemnity costs according to the principles discussed by Sheppard J in Colgate Palmolive Co Pty Ltd v Cussons Pty Ltd (1993) 46 FCR 225. In that case, after considering a large number of authorities on the question of whether an order for indemnity costs should be made, Sheppard J set out what he considered to be the principles that could be extracted from those authorities. Although noting that the categories of cases in which an award of indemnity costs would be appropriate were not closed, his Honour set out at page 233 of the reported judgment the circumstances in which courts had made such orders in the past. I do not intend to reproduce what his Honour set out in the paragraph numbered "5" which appears on that page, but I have had regard to it. 63 Notwithstanding that there may be justifiable criticism of the way the litigation was conducted by Ms Wentworth, I do not believe that it was of such a nature that it alone warrants a departure from the ordinary rule as to the basis upon which costs should be ordered. The conduct complained of does not lead me to the conclusion that the Court "must mark its disapproval for wrongful conduct by departing from the ordinary principle of costs and relieving the 'innocent' party of the burden of costs inflicted by the wrongful action of the losing party"; Walton v McBride (1995) 36 NSWLR 440 at 451E. 64 It is clear to me that Ms Wentworth believed throughout the proceedings, and still does believe, that she has been the victim of a fraud perpetrated by the defendants. There was some reasonable basis for that belief before the hearing commenced having regard to the timing of the transactions, the unsatisfactory nature of the October list prepared by Mr Rogers as justification for the transactions, the erroneous attribution on a cheque butt when making that list and the proved unreliability of Mr Rogers as a witness on certain matters. The late production of documents, including the 1981 and 1983 indemnity documents, would have fuelled that belief. 65 Although Ms Wentworth, at least by the conclusion of the hearing, asserted that the fraudulent behaviour in respect of the transactions extended to persons in addition to the defendants and although some of the allegations made in her final submissions had no evidentiary basis at all, these are not matters which in my view should lead to a conclusion that costs should be awarded on an indemnity basis. It is unnecessary to investigate or determine the extent to which any of the allegations raised by Ms Wentworth in prosecuting her claim were false or knowingly false. In my view they did not significantly extend the hearing or in any other way cause the defendants a detriment in respect of which they should be indemnified: see Wentworth v Rogers (No 5), above, and Walton v McBride (1995) 36 NSWLR 440 at 451 per Kirby P. 66 Nor does the rejection of the settlement offer made by Mrs Rogers and the subsequent result of the proceedings lead me to a different view. It should be noted that the offer was not simply for Ms Wentworth to abandon her action against Mrs Rogers, but that she abandon the proceedings as a whole. In light of Ms Wentworth's belief that the property transactions were carried out in order to defeat her entitlement to be paid, it was not unreasonable, in my view, for her to have proceeded notwithstanding the offer that was made. 67 In my opinion, whether the Court regards each of the particular matters raised by Mrs Rogers individually or taken together, there has not been shown a sufficient basis to exercise the discretion to order costs otherwise than in the usual way. 68 Ms Wentworth has submitted that the costs of the application for indemnity costs should be awarded to her on the basis that it was frivolous. I do not believe it was, notwithstanding that I do not intend to make the order.

[26]

(a) Costs of proceedings before Sperling J 70 A major issue of dispute before me was whether I should order costs in relation to the aborted hearing of this matter before Sperling J. As I have indicated above, Sperling J heard evidence over four days relating both to the property matter and Mr Rogers's application with respect to the cross-claim before determining to sever the matters and hear Mr Rogers's application first. Although Sperling J made costs orders in favour of Mr Rogers, including that part of the hearing relating to the property matter, he did not make, and was not asked to make, orders in relation to Mrs Rogers. 71 The Court of Appeal dismissed an appeal against the orders for costs made by Sperling J. Ms Wentworth is seeking special leave to appeal to the High Court against that judgment. 72 Ms Wentworth has submitted that Mrs Rogers is not entitled to be awarded costs in relation to the aborted hearing of the property matter before Sperling J. She contends that Mrs Rogers is estopped from seeking costs. She also argues that it was not appropriate for costs to be awarded to both Mr and Mrs Rogers because of their common interest in the proceedings. 73 I do not believe that there is any reason why Mrs Rogers should not seek costs in relation to the hearing before Sperling J in so far as they involved the property matter. It seems to me that his Honour reserved the question of costs in relation to Mrs Rogers and, until the application to disqualify himself was made by Ms Wentworth, intended to continue the hearing of the property matter before him. I do not believe that his Honour's decision of 28 August 1997 was intended to bind Mrs Rogers nor does so. Although his Honour awarded costs on an indemnity basis in favour of Mr Rogers, I do not intend to do so in respect of Mrs Rogers. 74 Nor do I believe that the interests of Mrs Rogers in the property matter were identical to that of Mr Rogers such that only one order for costs would be appropriate. Mrs Rogers was seeking to defend the mortgage as a bona fide purchaser for value regardless of what might have been the intention or motive of Mr Rogers in granting the mortgage to her. It was appropriate, in my view, that they remained at arm's length by being separately represented before Sperling J. Although Ms Wentworth was asserting that the defendants acted jointly in perpetrating a fraud upon her and both the defendants sought to deny that allegation, it does not follow in my mind that their interests were identical.

[61]

That in so far as Gordon John Rogers by himself his servants and agents has entered into agreements, arrangements, deeds, mortgagors, [t]ransfers, deeds of charge and encumbrances from 30 May 1993 in relation to his interest in the land comprised in Certificate of Title Folio Identifier 71/615640 and Certificate of Title Folio Identifier 72/615640 or has disposed of, divested himself of, or altered his entitlements in his interest in the land comprised in either of the Certificate of Title, that any such agreements, arrangements, deeds, mortgages, transfers, deeds of charge and encumbrances be set aside. 89 The notice of motion came before Bruce J. on 17 October 1994. Mr Rogers did not appear and the matter was stood over to 24 October 1994. The injunction granted by the Court of Appeal was continued until 14 November 1994. 90 On 24 October 1994 Loveday AJ dismissed the cross-claim and added Mrs Rogers as second defendant to the notice of motion in light of the order sought by Ms Wentworth setting aside the 1994 property transactions. This was, at that stage, the only outstanding order sought by Ms Wentworth in respect of these proceedings. The injunction was continued. 91 Thereafter there were a number of hearings in relation to Ms Wentworth's claim to have the property transactions set aside. On each occasion, where it was necessary to do so, the injunctive relief initially granted by the Court of Appeal was continued to a date specified by the Court. 92 On 12 December 1994, by notice of motion, Mr Rogers sought to have the order dismissing his cross-claim set aside. 93 On 28 February 1995 Mrs Rogers filed a notice of motion seeking orders including that the order of Loveday AJ joining her as a defendant be set aside and that paragraphs 4 and 5 of Ms Wentworth's notice of motion, set out above, be struck out. 94 On 7 March 1995 Ms Wentworth filed a notice of motion seeking orders that the notices of motion filed by both Mr and Mrs Rogers be dismissed and further that Mrs Rogers be restrained from dealing with her interest in Te Mata. 95 On 23 March 1995 Sperling J commenced a hearing of the notices of motion. 96 On 30 March 1995, as a consequence of orders made by Sperling J on 28 March, Ms Wentworth filed a summons naming Mr and Mrs Rogers as defendants and seeking orders in the nature of those contained in paragraphs 4 and 5 of her notice of motion. The summons also sought an order restraining Mrs Rogers from dealing with her interest in Te Mata. The proceedings relating to the property matters became No 11094/95. 97 On 31 March 1995, Sperling J determined to proceed with Mr Rogers's application to set aside the dismissal of the cross-claim and adjourn the matters relating to the property transactions until the conclusion of the proceedings with respect to the cross-claim. On 4 April 1995 his Honour delivered a judgment explaining why he took that course, during which he stated:

[73]

Other relevant proceedings 103 Ms Wentworth has three judgments in her favour against Mr Rogers in respect of costs awarded to her in other proceedings. She has sought enforcement of two of those judgments by execution of writs for the levy of property of Mr Rogers, relevantly the money held in court and Te Mata. On 7 April 2003 Shaw J granted stays of the execution of the writs. 104 On 6 May 2003 Ms Wentworth made application to have the stays lifted. That application came before Miles AJ and was adjourned. 105 On 9 May 2003 I dismissed Ms Wentworth's claim in respect of the property transactions. Mrs Rogers then sought an order dissolving the injunction and the undertaking. She also sought an order that the money in court should be paid out to her. Mr Rogers has made no submissions or sought any further order. Ms Wentworth sought an order that half the sum held together with interest be paid to her and that the other half of the sum be held pending an account being taken of the amount outstanding on the mortgage. The matters were stood over for argument. 106 On 16 June 2003 Miles AJ ordered that the application by Ms Wentworth to lift the stays imposed by Shaw J be dismissed save that the stay be enforceable until further order of the Court, see Wentworth v Rogers [2003] NSWSC 474. His Honour granted liberty to the parties to apply following the determination by me as to the disposal of the money paid into court. In the course of his judgment Miles AJ concluded that, on the material before him, there was a prima facie right for Ms Wentworth to proceed with the execution of two writs for the realisation of her entitlement to a total of $226,509.37 with interest from 11 April 2003. However, his Honour noted a number of matters that would have to be taken into account when determining whether the stay should continue in respect of execution against Te Mata, one being the money paid into court. 107 On 17 September 2003, two days before the remaining motions were to be heard before me, a Registrar of this Court on the application of Ms Wentworth made the following orders:

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Should the orders of 4 September continue? 109 Ms Wentworth has filed an affidavit in respect of what she says were the circumstances in which she agreed to the sale of Lot 72 and what she believed would occur as a result of the proceedings determined by me. Ms Wentworth states that she believed that the whole of the money obtained would be available to satisfy her judgments against Mr Rogers or at least half of that amount if she were unsuccessful in her claim to have the property transactions set aside. She also alleges that the defendants and the solicitor for Mrs Rogers led her to believe that Mr Rogers was "entitled beneficially to at least one half of those proceeds of sale". She also asserts that she was misled as to his interest in the remaining Lot 71. 110 Ms Wentworth also seeks that the order and undertaking in respect of Lot 71 be maintained as a mareva injunction in aid of execution of the judgments in her favour. Further, she seeks to have the order and undertaking remain pending the hearing of an appeal that she has lodged against the judgment dismissing her claim. 111 Mrs Rogers claims that she is entitled to the whole of the money paid into Court. On her behalf it has been submitted that Ms Wentworth was not entitled to obtain the order and undertaking that she did. It is further argued that, had the order and undertaking not been in place, Mrs Rogers would have been entitled to the proceeds of the sale of Lot 72; as to one half, because she was half owner of the property and, as to the other half, in discharge of her mortgage over that lot. 112 Ms Wentworth maintains that the order and undertaking were put in place not simply to maintain the status quo pending the resolution of her claim to have the property transactions set aside, but to safeguard her right to seek to obtain her costs in relation to the hearing before Sully J and in the Court of Appeal. In effect her argument is that the order and undertaking were given to ensure that, once the 1994 transfer and mortgage were set aside, she would be able to satisfy her costs orders against Mr Rogers's share of Te Mata. Therefore, so the argument runs, she is entitled to have the order and undertaking remain until she has been able to levy judgment against Te Mata. 113 I do not accept the argument. It seems clear from the history of the matter, that the Court of Appeal originally imposed the restraining order as an interim measure until Ms Wentworth could commence proceedings in the Common Law Division to seek a permanent restraint of Mr Rogers dealing with the property and to have the property transactions set aside. Thereafter, although Ms Wentworth continued to seek an order permanently restraining Mr Rogers from dealing with the property, only temporary orders were made pending the outcome of those proceedings. The injunctions were originally made in proceedings 19228/82 because those were the only proceedings on foot at that time and they were sought, as was the order for the setting aside of the property transactions, by notice of motion in those proceedings. 114 Further, it is clear that the proceedings in relation to Te Mata, including the permanent injunction being sought by Ms Wentworth, were separated from the extant proceedings relating to the cross-claim and became proceedings 11094/95 on the condition that Mr and Mrs Rogers agreed to temporary injunctions and undertakings in relation to further dealings with the property. As I understand the situation, once the new proceedings commenced there were no injunctions or undertakings extant in proceedings 19228/82. 115 The injunction and undertaking presently in place in proceedings 11094/95 were, in my view, granted or given on the basis of temporary relief pending the determination of the summons that was dismissed by me. 116 In any event, there are no proceedings before me other than the property matter. I am only concerned with making consequential orders arising from my judgment dismissing Ms Wentworth's claims. In particular, proceedings No 19228/82 are not before me. Nor am I concerned with Ms Wentworth's attempts to seek to obtain execution of the writs that have been stayed. 117 No submissions were made to me as to what, if any, would be the impact on the orders made on 4 September 2001 in 19228/82, if I declined to continue those orders in these proceedings.

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What should happen to the money paid into court? 118 I do not believe that I have power to determine who should receive the money in court or whether Ms Wentworth should be entitled to gain access to it to satisfy her outstanding judgments. I believe I should simply direct that the money be returned to the person or persons who paid it into court, Mr and Mrs Rogers. There are no proceedings before me in which the present restraining order and undertaking can be identified as amounting to a mareva injunction in aid of execution of any order or to which the money in court now relates. If the orders made on 4 September 2001 still have any work to do, it is in proceedings 19228/82 in which the order for costs, which they are said by Ms Wentworth to be protecting, was made. 119 If I have an inherent jurisdiction to determine who should receive the money in court, I refuse to exercise it in these proceedings. There are other proceedings before the Court in which the issue can more appropriately be ventilated. Miles AJ was led to believe that I would be determining who was entitled to the money paid into court. However, I was of the view, perhaps erroneously, that, if Ms Wentworth lost her claim, the money would simply be returned to whosoever paid it into court. 120 One of the difficulties for my resolving any issues relating to who is entitled to the money in court is that there is now a dispute as to the basis upon which the orders were lifted over Lot 72. Ms Wentworth has filed an affidavit relating to her beliefs at the time she consented to the sale of Lot 72 and conversations that occurred with the legal representatives for the defendants at the time leading her to hold those beliefs. Apparently Mr Rogers also seeks to place evidence before the Court on that issue. However, I am not prepared to determine an issue involving the credibility of the parties in light of what has taken place before me where it is not necessary for me to do so. I have disqualified myself from hearing any other proceedings involving Ms Wentworth. I continued to hear the present proceedings, notwithstanding Ms Wentworth's objections to be doing so, because I understood that no issue of credibility would arise. 121 Mrs Wentworth is well able to take what action she believes is necessary to enforce her rights, whether it be in proceedings 19228/82 or by new proceedings. My failure to make any determination in respect of her entitlement to the money in court will not disadvantage her. 122 Insofar as the undertaking given by Ms Rogers is concerned I have difficulty in understand how that can relate to proceedings 19228/82. She is not a party to those proceedings and they have nothing to do with her. I have concluded that the transfer and mortgage were not fraudulent and that Ms Rogers has always had a beneficial half interest in Te Mata. I do not presently see how or why she should be restrained in dealing with her property. 123 If, contrary to my view, the restraining order in respect of Mr Rogers dealing with the property is in place to aid the execution of Ms Wentworth's judgments and if there is some legal basis upon which such an order could be continued in these proceedings, I would not continue it. Having determined the property matter in favour of Mr and Mrs Rogers, I see no basis upon which to continue to restrain them from further dealing with their property. I have determined they have not been acting to dissipate the assets in order to frustrate Ms Wentworth. There is no material before me that would indicate that they intend to do so in the future. 124 Ms Wentworth has lodged an appeal against my judgment in this matter. She asks me to continue the orders made on 4 September 2001 pending determination of the appeal otherwise the appeal would be rendered nugatory. I am prepared to continue the orders for one month from today. I understand from Ms Wentworth that the appeal will be before the Court at the end of this month. It seems to me, given the protracted nature of these proceedings, that it is preferable for me continue the orders on an interim basis only and allow the Court of Appeal to make such orders as it believes to be appropriate for the expeditious hearing of the appeal. 125 I have declined to order that this matter be remitted to a Master for the taking of an account in respect of the mortgage. If that is an appropriate course, it should be undertaken in some other proceedings. 126 In respect of the money in court I believe that the appropriate order to make in these proceedings is that it be returned to the defendants. It is clear on the evidence before me that at least half the money belongs to Mrs Rogers but I am unable to say what the position is as to the other half. That is a matter that seems to me, subject to any right Ms Wentworth may have to it as determined in other proceedings, to be a matter between Mr and Mrs Rogers.

At a glance

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Before

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Judgment (87 paragraphs)

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Cases Cited (18)

Cited By (2)