Motor Vehicles Insurance Ltd v Woodlawn Capital Pty Ltd

The background to this matter is set out in my judgments of 30 October 2014 (Motor Vehicles Insurance Ltd v Woodlawn Capital Pty Ltd [2014] NSWSC 1503), 17 December 2014 (Motor Vehicles Insurance Ltd v Woodlawn Capital Pty Ltd [2014] NSWSC 1846) and 10 April 2015 (Motor Vehicles Insurance Ltd v Woodlawn Capital Pty Ltd [2015] NSWSC 401). I will use the same abbreviations in these reasons as I did in those judgments.

In substance, the matter for determination in the proceedings was the parties' entitlement to a fund ("the Fund") that Woodlawn held in trust for MVIL following termination by MVIL on 17 November 2011 of the Second IMA and the AMA. On that date, the Fund was some $30.5 million.

From that sum, Woodlawn paid MVIL some $4.2 million on or about 20 March 2012.

On 20 March 2012, McDougall J made a freezing order in respect of the balance of $26.1 million (“the Freezing Order”).

One matter that I determined in my 30 October 2014 judgment was that Woodlawn was entitled to its accrued fees as at 17 November 2011 which, after an agreed set off, were agreed to be $2,957,521 (which I will abbreviate to “$2.95 million” for the purposes of these reasons).

On 17 December 2014, in light of the issues determined in my judgment of 30 October 2014, and notwithstanding that no orders were (or could) then be made (as further issues required consideration), I varied the Freezing Order by ordering that Woodlawn release to itself $2.95 million "on account" (my words at [18] of my 17 December 2014 judgment) of its accrued fees. I also ordered Woodlawn to release $20 million to MVIL (being an amount that, on any view of the issues remaining to be determined, was agreed to be due to MVIL).

I noted an undertaking given to the Court by the parties (“the Undertaking”) in the following terms:

Following delivery of my 10 April 2015 judgment, I invited the parties to confer and agree on the orders necessary to dispose of the proceedings.

Accordingly, on 21 April 2015, I was invited to make a declaration, an order and to enter judgment in the following terms:

I am told that the "balance of the Fund" on 21 April 2015 was something in the order of $4 million, and that in compliance with order 2 of 21 April 2015, Woodlawn has paid that amount to MVIL.

A note to the orders makes clear that the judgment of $4,807,635.71, was, in substance, comprised of interest to judgment.

I also made various orders as to costs and granted liberty to apply on two days’ notice, noting that “nothing in these orders affects” the Undertaking.

As to those matters, the following exchange occurred between Mr Giles (who appeared for MVIL) and me:

The next day, 22 April 2015, MVIL's solicitors called on Woodlawn to pay "the balance of the Fund" and to pay MVIL the judgment debt of $4,807,635.71. As I have said, the "balance of the Fund" has been paid. However, the judgment has not yet been paid; indeed, Woodlawn has not responded to the demand for payment of the judgment.

Woodlawn has now filed a notice of appeal, and MVIL a notice of cross-appeal. Those matters are fixed for hearing before the Court of Appeal on 29 and 30 October 2015.

In those circumstances, by notice of motion filed on 12 May 2015, (which I have not been able to hear until now as I have been on leave), MVIL seeks the following orders:

MVIL seeks those orders "to give effect to” the Undertaking.

I see a number of difficulties with this application.

The first is that the Undertaking that was given was to "restore" to the Fund the monies released by reason of my orders of 17 December 2014; that is, the $2.95 million paid by Woodlawn as trustee for the Fund to Woodlawn in its own right, and the $20 million paid by Woodlawn as trustee to MVIL.

There is thus no warrant for any order that any such monies be paid to MVIL; the most that could be ordered, it seems to me, is that the $2.95 million be restored to the Fund.

Second, following my orders of 17 December 2014, the $2.95 million was paid by Woodlawn as trustee to itself in its own right. Only it could "restore" the $2.95 million to the Fund. Messrs Breen and McNamara could not themselves do so. No order is sought that Messrs Breen and McNamara procure that Woodlawn restore the Fund. The orders sought are directed to Messrs Breen and McNamara personally.

For those reasons alone, I am not prepared to make the orders sought.

However, I do see a larger problem for MVIL.

The orders of 21 April 2015 are final orders. MVIL has the benefit of the declaration, order and judgment pronounced that day. It is open to MVIL to seek to enforce the judgment it has obtained in the usual way.

Further, on 21 April 2015 I was asked to note at par 4(c) of the orders that Woodlawn's "entitlement" to be paid accrued fees "has been satisfied" by, in substance, the payment to it of $2.95 million in December 2014.

As to the purpose for which the Undertaking was given, it may well be that MVIL's purpose was to reserve for itself a means to extract funds from Woodlawn in the event that Woodlawn did not comply with final orders, once made. That is certainly the effect of what Mr Giles said on 17 December 2014 and 20 April 2015.

But I am now faced with the orders that I was invited to make on 21 April 2015. I cannot reconcile the form of those orders with the application that MVIL now seeks to make. And I cannot see why, in the face of those orders, as a matter of discretion, I should do any more.

The Undertaking does continue. The Court of Appeal may have cause to make an order pursuant to it, depending on what aspects of my judgments are challenged and what decisions the Court of Appeal makes in respect of those matters.

For those reasons, I am not prepared to make any of the orders sought by MVIL.

MVIL's notice of motion of 12 May 2015 is dismissed with costs.