Bivona Pty Ltd v Deutsche Bank (Asia) A.G.

[1988] FCA 496

IN THE FEDERAL COURT OF AUSTRALIA	)
)

NEW SOUTH WALES DISTRICT REGISTRY No. G155 of 1 9 8 8

)

DIVISION GENERAL 1

BETWEEN:  BIVONA PTY. LITtITED

Flrst Appllcant

NOEL FRANCIS MITCHELL

Second AppllCant

LEXIE DELL MITCHELL

Thlrd AppllCant

DALKENE PTY. LIMITED

Fourth AppllCant

KERVID PTY. LIMITED

Fifth AppllCant

PINTRA PTY. LIMITED

Sixth Applicant

M.C.P. SCONE PTY. LIMITED

Seventh Applicant

Tenth Appllcant

NOEL F. MITCHELL PTY.

LIMITED

Eighth Applicant

M.C.P. MUSWELLBROOK PTY.

LIMITED

Ninth AppllCant

MITCHELL'S CONCRETE
PRODUCTS PTY. LIMITED

MITCHELL'S CEMENT PRODUCTS

(GLENDALE ) PTY. LIMITED

Eleventh Appllcant

MITCHELL'S CEMENT PRODUCTS

(GOSFORD) PTY. LIMITED

Twelfth Applicant

MITCHELL'S CEMENT PRODUCTS
(PORT STEPHENS) PTY.

LIMITED

Thirteenth Applicant
M.C.P. DENMAN PTY. LIMITED

Fourteenth Applicant

M.C.P. LIQUOR SUPPLIES

PTY. LIMITED

Flfteenth Applicant

LINISU PTY. LIMITED

Sixteenth Appllcant

BRUCE NO. 1 PTY. LIMITED

Seventeenth Applicant

AND :

- DEUTSCHE BANK (ASIA) A.G.

First Respondent

D.M.R.	PAYNE (known a s RAY
PAYNE)

Second Respondent

ERDMAN VOGT

Third Respondent

KAI NOLTE

Fourth Respondent

PHILLIP GLEESON

Fifth Respondent

ROBERT DOLK

Slxth Respondent

DEUTSCHE BANK A.G.

Seventh Respondent

CORAM:	FOSTER, J.
DATE :	4 MAY, 1988

PLACE: SYDNEY.

REASONS FOR JUDGMENT

HI S HONOUR : The proceedlngs before the Court today are by way of Notice of motion brought withln the confines of proceedings commenced In this Court by appllcation on 1 0 February, 1988. The Application and the accompanylng Statement of Claim indicate that the present applicants then sought, amongst other rellef, orders restrainlng the respondent, the Deutsche Bank (Asia) A.G., from, by itself, its servants, or agents, deallng with securities provided by deed between the applicants, or some of them, on 6 August, 1981 and 8 July, 1982, OL- with mortgage agreements entered into pursuant to

those deeds, the mortgage agreement being set out ln schedules	to the Application.
In fact, since the issuing of the Applicatlon, various sales pursuant to those mortgage deeds have taken place. It is apparent from what has been placed before me today, that it 1 s intended on the part of the respondents, that sales also take place in relation to the propertles, the sublect of the other mortgage deeds in the schedules.
Most particularly, sales by way of auction are scheduled to occur in respect of certaln of those propertles as early as tomorrow morning. It is to be noted that in the Appllcation, a clalm 1 s made that rnterlocutory rellef should be given ~n respect of the orders sought, to whlch I have already made reference.
No lnterlocutory relief was sought in respect of the earller sales referred to, and lnterlocutory relief in respect of the sales scheduled to take place tomorrow was made only today. The auction sales a r e i n respect of properties set out in the Application and affldavlts. There 1s no need for me to
refer to them in detail here.
They are in respect of properties that may generally be described as belng located in the central coast area. It 1s clear that substantial effort and preparation would have gone into the setting up of the auction sales and that their cancellation at this stage would cause considerable
inconvenience. It is- necessary to take into account that the proceedings brought in this Court were, in fact, brought during the currency of proceedings in the Equity Division of the Supreme court of New South Wales.

I have been glven lnformatlon as to the nature of

those proceedings i n the course of argument today. It 1 s not

necessary for me to refer ln any detall to those proceedings or

as to their present status. It 1s clear that they were

commenced durlng the long law vacatlon and that they reached	a
point where a substantlal hearlng took place before	hls Honour,

Mr. Justice Powell, culminatlng In hls Honour givlng a decislon between partles who correspond, for all practlcal purposes, with the parties before me today.

That decislon was given by his Honour on 15 February after a hearlng whlch had occupled some three precedlng days, although it would appear that they were not necessarlly continuous days. I have to conslder, with some care, the question of the exerclse of dlscretlon In this matter even If I am satisfled that a case for interlocutory relief has been made out at this time.

I should lndlcate that in the course of argument It

has been accepted that the claim belng made and dealt wlth

relates only to the projected sales tomorrow.	In what I do at
this stage, I should make clear that the questlon of what

should happen in respect of future sales is left open for the parties further to litlgate on the basis of such further material as they may wish to put before the Court. I am dealing only wlth the questlon of the sales scheduled to take place tomorrow.

It is clear that the proceedings before Mr. Justlce

Powell involved, for practical purposes, the same issues a s have been agltated before me today, and, to a large extent, at least the same lssues as are sought to be ralsed ln the proceedings commenced ~n thls court by way of the Appllcatlon, to which I have made reference.

The proceedlngs are founded upon an allegatlon of breaches of S. 5 2 of the Trade Practlces Act, 1974, there belng clalmed to have occurred representatlons amountlng to deceptlve or misleadlng conduct. These representations are alleged to have been made in conversations and discusslons occurrlng

between the applicants and representatives of the bank prior to the entry Into the deed in questlon and also the entry into the mortgages.

Put compendlously, they are alleged to have been misrepresentations as to the strength of the Austalian dollar viz-a-viz the Swiss franc at the time when a loan in Swiss francs was contemplated and also as to the necessity or the lack of necessity for taking hedging procedures in relation to

those loans.

The baslc claim made in the Application is that the documents entered into as a result of those representatlons: namely, the baslc deeds and also the mortgage documents made pursuant to those deeds, should be set aslde as a result of the Court exercislng its powers under sections 82 and 87 of the Trade Practices Act.

l .

Those ultlmate consideratlons are, of course, some dlstance away and wlll only be dlsposed of when the case 1 s flnally heard. It 1 s not wlthout slgnlficance, however, that his Honour, Mr. Justice Powe11, after a fairly full hearing and

a consideration of the issues In far greater depth than tlme

allows me to do today, formed qulte strongly the views that the material before him showed no prima facie case or no serlous issue to be trled as to the maklng of representations which would constltute relevant breaches of S. 5 2 and therefore provide a basis for the maklng of the orders sought.

It has been made clear to me that the applicants would wish to canvass In the proceedlngs of this Court the valldlty of his Honour's findlngs. It is not, in my vlew, aproprlate that I in any way treat this Appllcation before me as some sort of appeal from the findlngs that were made in the Equity Division of the Supreme Court.

It 1 s apparent from passages in hls Honour's judgment,

..

however, that the very matter that comes before me today was

foreshadowed on 11 February, 1988. It appears from hls

Honour's judgment, at page 2 4 , that an undertaklng was sought from the respondent bank that it would not exerclse its powers of sale once the time provlded for in the notices, which had been served under S. 52(2)(B) of the Real Property Act, 1900

(N.S.W.) had explred.

It was also indicated that if no such undertaking were

forthcoming interlocutory relief would be sought of the nature of the relief sought before me today and which, of course, is referred to in the Applicatlon of 10 February.

The question, therefore, of the exercise or otheriilse

of the bank's power of sale under the mortgages and ~ t s
restraint pending the disposition of the issues between the
partles and the flnal hearing of the Applicatron in this Court
was squarely raised. It 1s equally plain that no such
undertaking was given. It is equally plaln that, pursuant to
the posture adopted by the bank, sales have, in fact, already
taken place.

The matter of the exercise of the bank's powers was clearly present to the mind of the appllcants and their legal advisers after 11 February, 1988. In a letter of 23 march,

1988, reference was made by the applicant's	sollcltors to this
question.

. .

It is very significant, in my view, that desplte what

had occurred on 11 February, 1988, no undertaking was sought in

that letter to the effect that no sales would take place. The letter really amounts to a reservation of rights In that regard

on the part of the appllcants and a request to be kept informed

as to the respondent's Intention. The letter was not, in fact,

replied to, and, in the interim, steps were taken on behalf of
the bank to reallse some of its securltles.

When the matter came before me today, lt 1 s plaln that lt came before me on the basls of no slgnlflcantly different materlal from that whlch was placed before hls Honour, Mr. Justice Powell. Indeed, I have not had placed before me materlal In affidavlt form.

The materlal placed before me 1 s in the form of

statements ordered to be provlded by thls Court In earller dlrections hearlngs. Those statements set out In numbered paragraphs, material, which I understand from what I am told from the Bar Table is, for practical purposes, the materlal set out in affidavit form before hls Honour, Mr. Justice Powell.

I need say no more than that I share hls Honour's

misgivlngs as to whether thls materlal discloses any cause of

action under S. 52 of the Trade Practices Act.

It seems very much, to my mind, that the representations relled upon are, ln effect, representations as to oplnions held. I do not feel, from the materlal placed before me, at this point of time, that there 1 s a sufficlent

they were expressed recklessly without there being any proper	demonstration that those oplnlons were either not held or that
perceived basis for them. It may be that addltlonal material
would go farther towards demonstratlng those matters, and, for
that reason amongst others, I have lndlcated that I am considering no matter other than the questlon of what should or should not occur tomorrow.
There 1 s obviously a serious matter to be argued also as to whether any cause of actlon accrulng under the __ Trade Practices Act, has not explred through the effluxlon of tlme and the applrcation of S . 8 2 ss ( 2 ) of that Act.
Taking all these matters Into conslderatlon and expressing particular concern as to whether, as a matter of dlscretion, the Court could posslbly grant the lnterlocutory rellef sought, havlng regard to the earller hlstory of the matter, I have come to the conclusion that I should not grant
interlocutory relief in respect of the sales scheduled for tomorrow.
I therefore refuse the appllcatlon and in so doing I leave open the question of whether further applications should be brought in respect of sales to take place in the future. My decislon given today IS not to be taken as a declsion In relation to those matters.
So far as the Notice of Motion is concerned, I may be taken to- have granted the leave asked for In paragraph 1.

In relation to paragraph 2, I dlsmlss the Notice of

Motlon, in so far as it relates to the following:-

2 0 8 The Entrance Road, Erlna;

Lot 3 Bonnal road, Erina; and

4 Rankln Street, Wyong.

Otherwise, I adjourn the Notice of Motion restorable

on two days notlce.

I award the costs of today to the respondents.

The Notlce of Motlon may be restored f o r directions on

one day’s notlce before his Honour, Mr. Justice Beaumont, or

some other Judge of thls Court.

In relation to further directions ln thls case, ~t

being noted that the respondents are in default of prevlous orders, I grant the partles leave to approach the Assoclate to

Mr. Justice Beaumont wlth a vlew to the matter belng llsted

before his	Honour with a view	to further directions belng
glven.

I certify that this and the 10	precedlng pages
are a	t r u e copy of the reasons for ludgment hereln
of his Honour, Mr. Justice M.L.	Foster.
Associate:  Dated: