ORDER MUST STAND. THE CASE OF T. K. MACDONALD

Evening Post, Volume LXXXI, Issue 96, 25 April 1911, Page 7

ORDER MUST STAND. THE CASE OF T. K. MACDONALD

APPELLANT GAINS A " SMALL MEASURE OF SUCCESS." WRIT TO BE PROCEEDED WITH. NO COSTS TO EITHER PARTY. Reserved judgment in a case which has aroused a good deal of interest recently was given by the Court of Appeal to-day. The Bench was occupied by their Honours Justices Williams, Denniston, Edwards, and Cooper. The parties to the suit were Thomas Kennedy Macdonald, appellant, and Mary Rose, Janet Mackay Rose, Ellen Roberta Greenfield, and John Greenfield, respondents. At the hearing Mr. G. H. Treadwell appeared for appellant, and Mr. A. W. Blair for respondents. _ The judgment of the court was delivered by Mr. Justice Edwards, the other Judges all being in agreement. . THE FACTS STATED. Th© suit was brought against the- appellant as trustee. The prayer was that an account might be taken of the assets token possession of by the appellant, as trustee, and that th© appellant might be ordered to pay into court such sum of money as might be found to be 'due and owing by the appellant to the trust estates. On the 19th April, 1307, an order was by consent made that the accounts should be taken before the Registrar of the Supreme Court at Wellington. Upon the taking of the accounts, appellant was surcharged with a sum of £240, as to which the Registrar and accountant reported as follows :—: — ' "With reference to a further sum of £240 paid to Macdonald .on th© 21st June, 1902, by S. C. Leary, being half share of commission lees £10 expenses, paid to Leary by James Lockie for the sale of Lockie's share in the Waipaoa Block, and which sum Macdonald claimed from Leary for obtaining the consent of the said Macdonald, as trustee of the Greenfield estate, part owners of the said block, to the purchase by the estate, together with their co-partners in the block of Lockie's share, we are of opinion that this amount, together with interest thereon at the rate of 6 per cent, per annum from 2lst June, 1902, up to the date of payment, should be surcharged against Macdonald, on the ground that he was acting as trustee on behalf of the estate in connection with the purcha-se, and as such is not entitled to participate in any commission on the purchase, and that the sum of £240. with interest, should be credited to the trust estate." On a motion to vary this l'eporb his Honour Mr. Justice Cooper held that the surcharge of £240 had been properly made. On 17th December. 1910, the Registrar and accountant reported that the. appellant" was indebted to t>he trust estateof Robert Mackay Greenfield, deceased, in the sum of £142 17s 6d in respect of interest upon moneys misapplied by him. The affidavits show that this sum was arrived at by agreement between the .solicitors for the parties. MAKING THE ORDER. On 22nd December, 1910, an order of the Supreme Court was made ordering "that the defendant do pay into Court tho sum of £2696 14s lid, beifig the amount agreed upon by the parties as due by the defendant as trustee of the estate of Ellen Greenfield, deoease.d, and also that the defendant do pay into Court the sum of £950 8s 4d, being th© amount agreed upon as being due by the defendant as trustee of the estate of Robert Mackay Greenfield, deceaised; this order is to remain in abeyance until lbt of February, 1911, and that notice of any application thereafter to be made upon this order shall be served upon the defendant." The sums mentioned in the order above set out included the £240, and also the £142 17s 6d for interest. The appellant having failed to comply with the order of 22nd December, 1910, the respondents moved the Court for leave to issue a writ of attachment agamst him, in *>o far as the non-com-pliance related to th© sum of £3504 5s 9d, being the total amount of the two sums mentioned in the order, less* £142 17s 6d. On 10th February last, an order was made by their Honours the Chief Justice and Mr. Justice Chapman granting respondents leave to issue a writ of attachment against the appellant accord--ingly. From this order the present appeal was brought. OBJECTIONS OVER-RULED. Upon the argument before this court, proceeds the judgment, various objections made to the order appealed from were over-ruled by the court during the course of the hearing. "First, it'\Vaa urged that the moneys, in respect of the non-payment of which the order of 10th February last was made, are not in th© possession or control of the appellant, within the meaning of the Imprisonment for Debt Limitation Act, 1908, section 3, sub-eection 2 (c). That the appellant has not the funds now available to meet his liability in respect of these moneys is, no doubt, true. But all the cases show that it is no answer under the Statute for a trustee who has been ordered to pay, trust moneys into court, or to a party to the action,, to say, " I had the moneys, but I have spent them, and I have now no means to meet the liability." NOT DEBT OR DAMAGE. Then it was said that the action, in connection with which the order appealed from has been made, is an action, for the recovery of debt or damages, and that the power of tho court to enforce its order for payment by attachment has been taken away by rule 392 of the Code of Civil Procedure. The collocation of tho words " debt or damages " in rule 952 shows quite clearly what is meant by that rule. It means merely that a writ of attachment shall not issue to enforce a judgment in an ordinary action for debt arising without delinquency, or for the recovery of damages. The word " debt " in this rule refers to the common law action for debt, and does not include the equitable action which formerly could have been brought only in a court of equity. To hold otherwise would be to hold that rule 392 of the Civil Code has, in effect, repealed subsection 2 (c) of section 3 of the Imprisonment for Debt Limitation Act, 1908. EFFECTS OF A CONTENTION. Then it was contended that the effect of rule ' 392 is that writs of attachment can issue only in respect of the disobedience of final judgments, and that the order of 22nd December, 1910, is not a final judgment. The answer to this contention is that the word "judgment" is not used in the code in any such limited sense. Rule 348 explicitly provides that " every order of the court may be enforced in the same manner as a judgment to the same effect." If the contention of the appellant's counsel upon this point were correct, it would follow that not only every order for payment of a sum of money would be nugatory, but that every interim injunction granted for the' protection of property might be disregarded with impunitxt

It is not in dispute thitt a writ of attachment cannot bo issued in respect of any sum which includes interest upon* moneys misa.pnropri.ited, the reason' being that sucti interest can nover bo said to have been in the possession or control of tho defendant. QUESTIONS FOR THE COURT. The substantial questions which this court has to decide are three: — (1) Whether or not the fact that the order of 22nd December, 1910, included in tho sums ordered to be paid a sum for interest, without distinguishing principal from interest, a writ of attachment may issue, in respect of so much of such sums as represents principal, „ upon proof, on the motion for leave to issue the writ, of the respective amounts of principal and interest of which the sums mentioned in that order ai'e in fact compounded ? (2) Whether or not the sum of £240 surcharged against the appellant is, in the circumstances above stated, a sum which is in the possession or control of the appellant within the meaning of sub-section 2 (c) of section 3 of the Im1908°' nmenfc f ° r Debfc Limitatiou Act > (3) Whether or not the order of 10th February last can, if necessary, be' varied or amended, so as to confine its operation to moneys in respect of tho nonpayment of which a writ of attachment may be issued? THE ANSWERS. ( "In our opinion," said their Honours, the answer to the first of these questions must be, that if it can bo shown conclusively from the proceedings in the action m which the order for payment is made how much of the sum which the defendant is ordered to pay is the principal ot the moneys misappropriated, and how much is interest, then an order granting leave to tlie plaintiff to issue a writ of attachment, in respect of the principal sum only may properly be The C ase i Berwick v. Lamb is a distinct authority for two propositions which cover the first and the third questions. Ihe case also appears to be an authority upon the remaining point: Whether or not the sum of £240 surcharged against the appellant is, in the circumstances of the case, a sum which is in the possession or control of the appellant, within the meaning of suu-sec-turn 2 (c) of section 3 of the Imprisonment for Debt Limitation Act, 190b In the opinion of their Honours it is not, and they think that the judgment of the English Court of Appeal in Berwick v. Lamb establishes that it is not This sum was not.the purchase money of any part of tho trust estate. It was a -sum paid out of his own remuneration by the agent, w ho effected the sale of Lockie s interest in the Waipaoa. estate c ° , j a PP ellailt « as trustee of the Greenheld estate, and the other persons interested in that estate, as the price of the appellant s concurrence in the sule. Obviously tho appellant could not be, allowed to retain that sum, when his right to do so was questioned by tho persons beneficially interested in the Greenfield estate, but the authorities are clear that th© appellant cannot be attached by reason of his non-payment of that sum pursuant to the judgment. „ lh » cum of £240 waa not money* of the Greenfield estate at the time when he received it. He became liable to account for it, and judgment has been properly recorded against him in respect of that matW. But until that judgment, had been pronounced, this cum could not be said to be moneys be. longing to the Greenfield Estate." H© cannot therefore be attached for non-pay-ment of that sum. DECISION OF THE COURT. "Th© result ie therefore/ the jud». ment concluded, "that the order of 10th February must be varied by deducting from the sum therein mentioned the cum of £240. Subject to thie variation, the order muet stand. "There remains the question of costs. . . . The respondents had under consideration the question of what moneys ehould be deducted from the sums mentioned in the order of the 22nd of December last before they moved for leave to issue a writ of attachment, adid they, should have seen that th© proper deduc* tione were made. They failed to do so, and the result of this appeal will be that a bad order will be made good. The appellant has partially succeeded, and he wae entitled to come to this court to obtain even that small measure of success. He does not, however, appea-r to hay© raised the point upon which he has succeeded in the court below. W© think that there ehould be no costs to either party." SECURITY FOR COSTS. ' Mr. Treadwell referred to the £100 security for costs which had been paid into court, and submitted tnab he was entitled to take it out. Mr. Blair said it was paid in for a special purpose, and that purpose having failed, he- assumed that the money could be taken out. Their Honours, afber conferring brief* ly, agreed. FURTHER STAY REFUSED: Mr. Treadwell : I_ presume thab a further stay of execution of the writ will be granted until the Judge who deals with the matter makes an appointment for that purpose. Mr. Justice Edwards : Is it necessary ? I don't suppose that Mr. Blair wants appellant to remain in custody until he is dealt with. Mr. Blair : Mr. Treadwell knows that thab was iihe reason the order was not issued some time ago. I don't think I should be bound, however. I propose simply to get an appointment from the Judge and the older would be' issued. Mr. Justice Edwards : W© can't stay it. Mr. Blair does not want to be dp"* prsssive. Mr. Justice Williams : It must be left* to his discretion.