Money and property held by the Court are not beyond the reach of those with claims against the person entitled to them. Order 13 Rule 67 of the National Court Rules 1983 is the mechanism.
Order 13 Rule 67(1)
Where there are funds in Court and —
(a) the interest of any person in the funds has been mortgaged, charged or assigned; or
(b) a person having an interest in the funds is a debtor under a judgement or order of the Court,
the Court may, on application by the mortgagee, chargee, assignee or creditor under the judgement or order, make an order prohibiting the transfer, sale, delivery out, payment or other dealing with the whole or any part of the funds or of the income of the funds, without notice to the applicant.
(7) In this Rule, “funds” includes effects.
It does not transfer the funds, and it does not create a priority. It prohibits dealings without notice to the applicant.
The applicant is thereby told before the money leaves, and can then take whatever step is appropriate — applying for payment out, asserting a charge, or moving to preserve the fund.
The words “or of the income of the funds” extend the order to interest and other income, and sub-rule (7) extends “funds” to effects — so property other than money held by the Court is covered.
Two classes
| Applicant | Basis |
|---|---|
| Mortgagee of a person’s interest in the funds | r 67(1)(a) |
| Chargee of that interest | r 67(1)(a) |
| Assignee of that interest | r 67(1)(a) |
| Judgment creditor of a person having an interest in the funds | r 67(1)(b) |
Payment into Court by a defendant under Order 8 Division 6.
A fund ordered to be paid into Court or otherwise secured under Order 14 Rule 10(3).
The proceeds of a court-ordered sale of land, where the Court directs payment of the purchase money into Court under Order 14 Rule 34(5)(c).
Money paid in by a garnishee under Order 13 Rule 59.
Money recovered for a disabled person, which under Order 5 Rule 32(2) shall be paid into Court unless otherwise dealt with by order.
Money brought in on an interpleader, where the Court may order the applicant to pay or transfer the property in dispute into Court.
Rule 67(2) to (4)
(2)(a) If there are proceedings in the Court relating to the funds — by motion on notice in those proceedings.
(2)(b) If there are none — by originating summons joining as defendants all persons whose interests may be affected by the application.
(3) The notice of motion or originating summons (a) shall be served on each person whose interest may be affected; but (b) shall not be served on any other person.
(4) The Court may, on terms, dispense with the joinder of any person as defendant and dispense with service on any person.
This is an unusual provision. Most rules of court say who must be served; this one says who must not.
The reason is confidentiality. Funds in Court often arise from settlements, estates, or claims involving children. The existence of the fund, and of a charge over someone’s interest in it, should not be circulated to people with no stake in it.
So identify carefully who is genuinely affected, serve them, and no one else. Where you are unsure whether a person is affected, sub-rule (4) allows the Court to dispense with joinder and service on terms.
Rule 67(5) and (6)
(5) The Court may order the applicant for a stop order to pay the costs of any party to any proceedings in which the funds are in Court, or of any person interested in the funds.
(6) This does not affect the general powers of the Court as to costs.
A stop order interferes with a fund in which others may have pressing interests — a beneficiary awaiting distribution, a plaintiff awaiting payment out of an accepted payment into Court, a child’s damages held under Order 5 Rule 32.
Sub-rule (5) allows the costs of any of those people to be visited on the applicant. So establish the interest you assert, and seek an order no wider than that interest requires — over part of the funds if that is enough, which sub-rule (1) expressly permits.
What happens next
Because the order only requires notice before dealings, the applicant must be ready to act when notice comes. Depending on the interest asserted, that may mean:
- Applying for payment out to the extent of the charge or assignment.
- Where the applicant is a judgment creditor, pursuing another means of enforcement — the fund having been identified, a charging order or other step may follow.
- Asserting the claim in any interpleader or competing-claim process. Note Order 13 Rule 63, under which the Court may hear and determine the claim of a person other than the judgment debtor to money paid into Court, or to any charge or lien on, or other interest in it.
Note too that under Order 8 Rule 78, money accepted in satisfaction of a cause of action is in several situations not paid out except by order of the Court — including where the plaintiff is a disabled person, or where a co-defendant has not consented. Those provisions and Rule 67 work in the same direction: money in Court does not simply leave.
Sources
- National Court Rules 1983 — O 5 r 32; O 8 Div 6, r 78; O 13 rr 59, 63, 66, 67; O 14 rr 10, 34, Div 7
Before relying on anything here, read the current text of the National Court Rules 1983 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.