MTH v Croft [2021] NSWSC 727

In this case, Greg Walsh acted for the plaintiff, MTH, in respect of proceedings commenced by Summons filed on 23 June 2020. The plaintiff sought relief including injunctions to restrain the defendants, Geoffrey and Sandra Croft for disposing of certain assets.

Adamson J heard the application for costs. Her Honour set out the factual and procedural background in respect of the costs at [3] – [17].

The Summons was filed in proceedings commenced by way of Statement of Claim on 16 April 2020. MTH claimed damages from the State of New South Wales and Mr Croft for physical and sexual assaults perpetrated against her by him between 1978 and 1979 whilst she was in the foster care of Mr and Mrs Croft. MTH was 16-years-of-age at the time she was a ward of the State.

The assaults were perpetrated against MTH at a property known as ‘Cleggswood’ in Uralla. This property was sold in 2013 for $ 3 million. Mr and Mrs Croft were registered proprietors as tenants in common in equal shares of two residential properties in Armidale, rural properties in Yorrowyck and Ebor, and another residential property in Brushgrove: [7].

In 2017, Mr Croft was arrested and charged with a number of counts of sexual and physical assault alleged to have been committed against the plaintiff. On 12 April 2019, Mr Croft transferred his share in the Brushgrove and Yorrowyck properties to Mrs Croft. On 15 May 2019, he transferred his share in the Ebor property to Mrs Croft; the consideration identified was “love and affection”: [8].

On 25 October 2019, Judge McLennan sentenced Mr Croft to an aggregate term of imprisonment of 22 years with a non-parole period of 10 years.

On 24 July 2020, Greg Walsh, the plaintiff’s solicitor, swore an affidavit in support of the application for freezing orders to which he annexed a draft statement of the plaintiff. A draft Summons was also annexed which sought relief against Mr and Mrs Croft pursuant to s37A(1) Conveyancing Act 1919 (NSW) which provides that transfers of property made with intent to defraud creditors, are voidable on the application of a person prejudiced by the transfer: [13].

On 27 July 2020, Campbell J made freezing orders to restrain Mr and Mrs Croft from dealing with their assets: MTH v Croft [2020] NSWSC 986.

On 4 December 2020, consent orders were made whereby Mrs Croft re-transferred to Mr Croft the interests which he had transferred to her in the Yarrowyck and Ebor properties.

Her Honour was satisfied that, had the proceedings been brought by Notice of Motion in the damages proceedings, the question would have arisen whether a costs order ought to be made in favour of either party and on what basis. Her Honour observed that the transfers from Mr Croft to Mrs Croft in mid-2019 for nil valuable consideration had the effect of diminishing the assets of Mr Croft which would otherwise have been available to meet a judgment in favour of the plaintiff.

Her Honour at [25] made a finding that the plaintiff’s prospects of success in the summons proceedings were high. In these circumstances, her Honour made an order that in the event that the plaintiff was successful in proceedings against Geoffrey Croft, the defendants in these proceedings are to pay the plaintiff’s costs of these proceedings.”

The judgement can be found at https://www.caselaw.nsw.gov.au/decision/17a2bc7bdd6fd259c6d4ead3