Application by Perpetual Trustees Victoria Limited

On 17 October 2017, Perpetual Trustees Victoria Ltd (“Perpetual”) paid $208,693.15 (the “Proceeds”) into Court, being the surplus proceeds from the mortgagee sale of a property at Bensville (the "Property"). The Property was one of the items in relation to which the Federal Circuit Court of Australia had made orders in resolving a de facto relationship dispute between Ms Kathy James and Mr Anthony Campo.

The only two people interested in the Proceeds are Ms James and Mr Campo. By notice of motion filed 11 January 2018, Ms James seeks an order that the Proceeds be paid to her.

At the hearing today, Ms James was represented by Ms R Winfield of Counsel. Mr Campo represented himself.

For the reasons which follow, the Court is satisfied that Ms James is entitled to be paid the Proceeds.

As early as 2010, Ms James (and a company controlled by her) brought proceedings in the Federal Circuit Court against Mr Campo arising from what that court was satisfied had been a de facto relationship between Ms James and Mr Campo.

The first set of orders resolving the proceedings in the Federal Circuit Court were made on 27 February 2015. Those orders were varied by consent on 24 June 2015. The varied orders required Mr Campo to pay $378,136.82 to Ms James. In return, Ms James was to transfer her interest in certain properties to Mr Campo. Mr Campo never made the payment required by those orders.

An enforcement order was issued on behalf of Ms James in July 2016 which yielded a payment of approximately $27,000 by way of garnishee order against Mr Campo.

On 20 January 2016, orders for costs were made in favour of Ms James by the Federal Circuit Court in the sum of $17,664.

Matters culminated on 1 November 2016 when further orders were made in the face of Mr Campo's failure to comply with any of the other orders that had been made against him (the “November Orders").

The November Orders include:

On 20 January 2017, Mr Campo lodged a notice of appeal to the Full Court of the Family Court seeking leave to appeal against a number of the orders that had been made against him, including the November Orders.

On 16 March 2017, the Full Court of the Family Court dismissed Mr Campo's application for leave to appeal against the various orders, including on grounds that there was no evidence that there was any merit in the proposed appeal and that Mr Campo had failed to provide any reasonable explanation for his delay in bringing the application.

Mr Campo has not paid any of the money which he owes Ms James pursuant to any of the orders, including the November Orders.

Before the procedure for selling the Property contemplated by the November Orders in relation to the Property could be acted upon, Perpetual took possession of the Property as mortgagee in possession and effected a sale. That sale was settled on 29 August 2017 and, after payment of Perpetual’s mortgage and related costs, the Proceeds were paid into Court.

The ultimate question on an application such as the present is to determine who has proven an interest in the Proceeds.

In the present case I am satisfied that, on any view of the matter, Ms James is entitled to the Proceeds.

First, pursuant to Order 12 of the November Orders, Ms James would have been entitled to the proceeds of sale of the Property if it had been undertaken in accordance with those orders. She remains entitled to those proceeds notwithstanding the mortgagee sale intercepted the court ordered sale process. Second, Mr Campo, on the evidence before me, undoubtedly still owes Ms James the approximately $404,000 referred to in Order 1 of the November Orders.

Mr Campo has told me from the Bar table that he does not regard the entire process, including the proceedings before the Federal Circuit Court, as having been fair to him. He has disputed a great deal of the evidence that was apparently relied on by the Federal Circuit Court in reaching the decision which gave rise to the various orders to which I have referred. None of what he has told me goes to the essential question of whether or not he has an interest in the Proceeds. There is no basis on which this Court can go behind the various orders made by the Federal Circuit Court, not least in circumstances where an attempt by Mr Campo to appeal from those orders has been dismissed.

The closest Mr Campo has been able to come in his attempt to demonstrate some interest in the Proceeds was his assertion that he had spent $144,700 in making repairs and improvements to the Property before it was sold. He suggested that there was some agreement between him and Ms James in relation to that expenditure, but there is absolutely no evidence of that. Contrary to a suggestion he made from the Bar table, there is no reference to any such arrangement in any of the Federal Circuit Court orders in evidence before me.

He also told me that, in the course of effecting those repairs and improvements, he lost tools of trade worth some $4,800. He also said that he had made mortgage payments in relation to the Property of $12,000.

The total amount which Mr Campo therefore asserts he is owed in respect of the Property, taking him at his word, is $161,500. There is no evidence before the Court which would justify a finding that Mr Campo has or had an interest in the Property to that, or any other value, that would have entitled him to the Proceeds. He could be an unsecured creditor of Ms James, but there is no evidence even to make that finding.

This simply leaves the position that both he and Ms James were the mortgagors of the Property. In the ordinary course that would suggest that he has a half interest in the Proceeds. However, in the present case that is extinguished by the considerable amount of money which he owes to Ms James and her entitlement to the proceeds of sale of the Property pursuant to the orders, ultimately the November Orders.

While, on this analysis, he may ordinarily be entitled to $104,000 (half the Proceeds), he owes Ms James at least $404,000 pursuant to the November Orders, which also provide she is to be paid the proceeds of sale of the Property. I say "at least" because there is no evidence of additional interest that would no doubt be running on that amount. I can also see no basis on which this Court could conclude that any of the $161,000 identified by Mr Campo is in fact owed by Ms James to him or could otherwise have been incurred in a way that would have given him an interest in the Property or the Proceeds.

In those circumstances, while he may ordinarily have been entitled to half of the Proceeds ($104,000), when this is set off against the at least $404,000 which he owes to Ms James under the November Orders and her entitlement under those orders to the proceeds of sale of the Property, it still leaves him owing her some $300,000. Payment to her of the entirety of the Proceeds will still leave Mr Campo indebted to her even if his alleged claim were to be accepted.

For these reasons I am satisfied that Ms James has demonstrated that she is entitled to the Proceeds. The court will make orders accordingly.