In the matter of Aquaqueen International Pty Limited

This is an application by the plaintiffs, Titan National Pty Limited and Kathryn Wood-Weber, for the extension of an asset freezing order originally made by Rein J and the appointment of a receiver over the property of the respondent, Ms Shirley Penson, by way of equitable execution of various judgments for costs against Ms Penson.

The plaintiffs move on an interlocutory process filed on 18 March 2016. The principal relief sought is:

The plaintiffs are entitled to the relief they seek.

The procedural history giving rise to the present application is, to say the least, convoluted. I gratefully adopt the history set out in the judgment of JC Campbell AJA in Penson v Titan National (No 2) [2015] NSWCA 120:

In paragraph [42] of JC Campbell AJA's reasons, his Honour refers to the issue of writs for the levy of property. I shall return to the fate of those writs later in these reasons.

To appreciate the full complexity of the history of these and related proceedings, it is also necessary to note the extraordinary number of applications which Ms Penson has made. These are summarised in Schedule 1 to these reasons.

Given the outcomes of those applications, the Court is satisfied that if not all, then nearly all, of those applications were baseless and made with the intention of delaying the inevitable in so far as the plaintiffs have been seeking to enforce the various costs orders which they have against Ms Penson, the origins of which are explained in the judgment of JC Campbell AJA set out in paragraph [4] above.

There can be no dispute that the plaintiffs are now the beneficiaries of the costs orders that have the effect of judgments either by reason of the issue of certificates of assessment or because they are the product of lump sum costs orders assessed in accordance with s 98(4)(c) of the Civil Procedure Act 2005 (NSW) (the “CPA”).

Ms Penson’s most recent appeals were heard and dismissed with costs by the Court of Appeal on 16 December 2015: Penson v Titan National Pty Ltd [2015] NSWCA 404; Penson v Titan National Pty Ltd (No 2) [2015] NSWCA 403; Penson v Titan National Pty Ltd (No 5) [2015] NSWCA 405.

To the judgments referred to in paragraph [8] above may be added what have been referred to before me as recovery costs.

Finally, to the judgments and recovery costs set out in paragraphs [8] and [10] above there should also be added a lump sum costs order which I made last week for $2,000 plus GST against Ms Penson in favour of the plaintiffs. In these reasons, a reference to the "judgments" is to all the matters referred to in this paragraph and paragraphs [8] and [10] above. These are all set out in Schedule 2 to these reasons. With the exception of the lump sum costs order which I made, Ms Penson has no further recourse whether by way of appeal or otherwise against the judgments. Interest is running or will run on them depending on matters it is unnecessary to detail in these reasons.

On 24 November 2015 Rein J made an ex parte asset preservation order over the Property. Ms Penson is the registered proprietor. These reasons should be read with his Honour's judgment of that date. In so far as any matter going to the continuing need for an asset preservation order is concerned, nothing has changed since then other than I have now had the opportunity over several appearances to observe Ms Penson's conduct before me. That has only confirmed the truth of Rein J's observation in paragraph [14] of his unpublished reasons of that date that Ms Penson is “determined and tenacious in resisting the payment of any costs which she has been ordered to pay”.

The reason why Rein J's order was made ex parte related to difficulties of serving Ms Penson. The asset freezing order was subsequently extended up to and including 30 March 2016. Mr Barham of Counsel, who appeared for the plaintiffs, informed me that date was selected to allow the matters that Ms Penson then had before the Court of Appeal to be resolved. That has now occurred (see paragraph [9] above).

The matter came before me in the Duty List on 29 March 2016 for the extension of the order originally made by Rein J. The interlocutory process on which the plaintiffs now move had originally been made returnable on 4 April 2016. Mr Barham informs me that the return date was altered in the Registry to accommodate the fact that Rein J's order was to expire on 30 March 2016.

When the matter came before me in the Duty List on 29 March 2016, Ms Penson appeared. She informed the Court that she wished to resist the extension of the asset freezing order and resist the appointment of a receiver over the Property. She sought an adjournment. Given the history of the matter (for which see paragraphs [4], [6] and [9] above), I took the view that the plaintiffs were entitled to have their application heard as soon as possible, consistently with affording Ms Penson a fair opportunity to prepare to meet the application. I made orders fixing the hearing of the interlocutory process for 7 April 2016 including:

Notwithstanding that I had made those orders, Ms Penson exercised her penchant for filing applications by filing a further interlocutory process in the Corporations List on 5 April 2016 that was returnable before the Corporations Judge on 13 April 2016. When one examines the relief that she sought in that interlocutory process, including that the hearing of 7 April 2016 before me be vacated, it is clear that the only purpose behind her filing that interlocutory process was to seek to vacate the hearing which I had fixed.

That further interlocutory process returnable on 13 April 2016 came to my attention through the ordinary administrative processes of the Court. When the hearing before me resumed on 7 April 2016 I made that interlocutory process also returnable before me instanter on the basis that it did nothing more than give formal existence to the application Ms Penson renewed on 7 April 2016 for an adjournment.

Again given the history of the matter, I declined Ms Penson's application for an adjournment at the outset of the hearing on 7 April 2016 but informed her that she could, if she wished, renew her application at the close of the plaintiffs' case. I did so because it seemed to me to be sensible, in terms of assessing whether or not she should be granted an adjournment and for how long that adjournment might be, if both she and the Court had heard the totality of the plaintiffs' case on their application.

The application continued into the next day, 8 April 2016. At the close of the plaintiffs' case I acceded to Ms Penson's application that the proceedings be further adjourned to today (20 April 2016). That was in order to give her every opportunity to prepare to meet the case which the plaintiffs had advanced. I made orders including:

In accordance with orders 3 and 4 set out in the preceding paragraph, the matter was before me last Friday in relation to the subpoenas which Ms Penson had been given leave to issue. Those subpoenas gave rise to a further judgment: In the matter of Aquaqueen International Pty Limited [2016] NSWSC 453.

At the end of that judgment I made orders that, if she wished to press for compliance with the two subpoenas that were the subject of those orders, Ms Penson should provide security in advance for compliance with those subpoenas:

Ms Penson has failed to provide that security. Her failure to do is another matter I take into account in coming to the view that I have formed that Ms Penson is reluctant to pay anything in connection with these proceedings.

Out of time having regard to the directions I made on 8 April, Ms Penson filed on 19 April 2016 an affidavit for the purposes of these proceedings affirmed on that day.

At 9 am this morning Ms Penson contacted my associate and told her that she (Ms Penson) was unwell and would not be attending Court today. My associate informed her that if she wished to make an adjournment application, I would deal with that application in open court with her attending by telephone. My associate also informed her that if she did not participate by telephone in the hearing of her adjournment application, it was possible that orders would be made against her today in her absence.

The hearing began before me at about 9.45 am and telephone contact was made with Ms Penson. I am satisfied that, at that time, she was outside a doctor's surgery. The matter proceeded a little informally in so far as Ms Penson, without being sworn, informed me of her situation. Furthermore, on the suggestion of Mr Barham, Ms Penson's mobile phone was passed to a receptionist at the doctor's surgery who at least confirmed where Ms Penson was and that Ms Penson had told her that she (Ms Penson) was sick and wished to see a doctor. The receptionist also confirmed that the surgery had been open from 8 am but Ms Penson had only arrived at the surgery shortly before the time of the telephone conversation during the hearing. The Court infers that Ms Penson did not reach the doctor's surgery until at least 9.30 am.

Ms Penson applied for an adjournment on the basis that she was unwell and unable to come to Court. I stood the matter over to 11 am to see if Ms Penson could, in the meantime, see a doctor and provide a medical certificate.

The hearing resumed at 11 am when telephone contact was again made with Ms Penson. She informed me that she had still not seen a doctor and said that she was very stressed and unwell and was unable to proceed with the matter today. She rang off.

The plaintiffs opposed Ms Penson's adjournment application, which continued in Ms Penson's absence. There were three reasons advanced opposing the application.

First, it was submitted that there was no evidence that she was too ill to come to Court except her own.

Second, any adjournment was useless because there was no suggestion that Ms Penson could say anything that would prevent the orders sought by the plaintiff being made. In particular, attention was drawn to Ms Penson's late filed affidavit, none of the contents of which could be said to assist any case that she might have made to resist the orders being sought today.

Third, it was submitted that Ms Penson had had plenty of chances on earlier occasions including in relation to the present application. The plaintiffs' solicitor gave evidence in the witness box of the history of Ms Penson seeking adjournments at various times, although it was accepted that this was the first time that she had relied on a claim of illness.

I decided to continue the hearing and reject Ms Penson's adjournment application. I accept, as was submitted by Mr Barham, that a decision in relation to an adjournment must be undertaken in accordance with the dictates of justice and to achieve the overriding purpose under the CPA:

There were three reasons why I refused the adjournment.

First, having heard Ms Penson on the phone, I was not satisfied that there was evidence that Ms Penson was so sick that she could not have come to Court or that the Court could not have properly accommodated any indisposition from which she was suffering. I regarded it as significant that she had not gone immediately to the doctor’s surgery at 8 am when it opened. It seems to me that she could have done so and explained to the receptionist why she urgently required a medical certificate.

Second, I accept Mr Barham's submission that an adjournment would have had no utility, given the strength of the plaintiffs' case for the relief which they seek. I have reviewed Ms Penson's affidavit affirmed 19 April 2016. I am unable to see anything in it that could have been the foundation for even a remotely arguable submission that the plaintiffs were not entitled to enforce the judgments.

Third, consistently with the need to deal with matters justly, quickly and cheaply, I formed the view that the history of delays in this matter really needed to come to an end. In terms of any disadvantage or injustice to Ms Penson, I was also mindful that, as I will in fact do, even if I were to appoint a receiver I would have stayed the order to enable Ms Penson to make such application as she wished to the Court of Appeal. In circumstances where I was not satisfied that the adjournment would have any utility because of the strength of the plaintiffs' case, there was nothing to be achieved by adjourning the matter for, say, a week in the hope that Ms Penson would appear on the next occasion. I would either appoint a receiver and stay the order today or do so in a few days' time. So understood, there was no real prejudice to Ms Penson, as opposed to the further delay and costs of an additional appearance that would be visited on the plaintiffs.

The foregoing are the reasons why I declined Ms Penson's adjournment application. For completeness, I record that at 2.20 pm, shortly before I returned to this matter in order to deliver these reasons, Ms Penson sent an email to my associate attaching a doctor's certificate. That doctor's certificate stated:

To the extent it may be relevant, even if that doctor's certificate had been available to me this morning, I would not have adjourned the matter because of the matters set out in paragraphs [35] and [36] above and I would still not have been satisfied that she was sufficiently unwell that she could not have attended Court today or that arrangements could not have been made by the Court to deal with the indisposition from which she said she was suffering.

I turn now to the substantive application.

The principles in relation to equitable execution of the Court's judgments were set out by Ball J in Hall v Foster [2012] NSWSC 974:

I respectfully agree with and adopt his Honour's reasons.

It will be apparent from those reasons that in order to obtain the relief which the plaintiffs seek, they must satisfy the Court that the legal remedies available to them for execution are inadequate.

By reason of the following uncontradicted evidence from Ms C Perry, the plaintiffs' solicitor, I am satisfied that the legal means for execution of the judgments are inadequate:

One of the matters to which Ms Perry refers in the evidence which I have quoted in the preceding paragraph, is the difficulty that has been encountered throughout the course of these proceedings with serving Ms Penson. In so far as the difficulties of serving her are concerned, despite her protestations to the contrary before me, I am satisfied that she does and is likely to do everything she can to make it difficult for her to be served. Even in the short history of the matter before me, there have been real difficulties in serving her with documents. One matter I take into account in drawing that conclusion, if I had any doubt, appears from the disclaimer in Ms Penson's emails which are in evidence before me. That disclaimer is suggestive of an experienced litigant in person, who seeks to take advantage of that status by making themselves hard to serve:

The difficulty with service is another matter I take into account in reaching the conclusion that the legal means of execution are inadequate.

For these reasons, I am satisfied that it is appropriate to appoint a receiver to the Property to enable the plaintiffs to enforce the judgments which they have obtained. There is some evidence as to the value of the Property and the amount owing to the mortgagee bank which supports the conclusion that there is utility in the order because Ms Penson still has equity in the Property.

As I indicated in paragraph [12] above, I am also satisfied that those matters which moved Rein J to make the original asset freezing order continue to apply. Those considerations have been fortified by Ms Penson's conduct of seeking adjournments before me and the persistent difficulties with service. I am satisfied that the asset freezing order should continue up to and including a short period of time after the receiver's appointment has in fact taken effect.

I will dismiss Ms Penson’s interlocutory process referred to in paragraph [16] above. It should never have been filed.

I will hear Mr Barham as to the form of orders to be made. Schedule 1 - List of proceedings and Applications (30.7 KB, pdf) Schedule 2 - Aquaqueen - Judgment 20.4.16 (9.88 KB, pdf)