Westpac v Morris [2014] NSWSC 332

A husband and wife divorced and the husband’s family members joined the family court proceedings because there was a dispute about whether certain assets were assets of the marriage or of other family members. The wife obtained costs orders against her husband, his parents and the family company in the family court proceedings. Separately the bank enforced its mortgage over one of the assets of the husband’s family and the surplus was paid into court. A dispute arose as to the surplus proceeds and the court found that the wife had superior rights over other member’s rights to the fund to the extent of the costs order because the court was in a position of a garnishee in relation to the funds paid into court. However the court stayed its orders for a period of time to allow other secured creditors to advance their claims, if any, over the funds and no claim emerged. The wife was so traumatised by the proceedings that she did not assert her entitlement to the funds for 15 years. The wife then applied to the court for the funds, which are less than the garnishee order in her favour, plus interest.

The court ordered that the entire funds be paid to the wife.

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